Token taxonomy is a classification system used to categorize different types of digital tokens based on their underlying purpose, functionality, and economic characteristics. This framework helps in understanding the diverse utility of tokens, from utility tokens and security tokens to stablecoins and governance tokens. It provides clarity for both market participants and regulators.
Context
Discussions in crypto news often involve token taxonomy, particularly in the context of regulatory clarity and legal classification of digital assets. Establishing a consistent taxonomy is critical for developing appropriate legal frameworks and ensuring market integrity. The ongoing debate aims to differentiate tokens effectively to apply relevant rules and foster responsible innovation.
The SEC’s pivot to a structured token taxonomy and generic ETP listing standards provides a clear regulatory path, mitigating systemic jurisdictional risk for issuers and exchanges.
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