Card payment networks have implemented proprietary tokens that establish a unique mapping between card numbers, card accounts and the network issued token that resides in a digital device.
More recently, both Mastercard and Visa have announced that they intend to use a new tokenization process that will enable direct access to bank accounts that have no card associated with them. These private tokenization efforts will now compete with a new open standard for designing and implementing tokens created by the Enterprise Ethereum Alliance (EEA).
The EEA press release indicates that the purpose of the token standard (the Token Taxonomy Framework or TTF) is to enable tokens to be universally created and defined such that the token’s capabilities are easily understood in non-technical terms, or as stated in the press release, “Users of the TTF can create a new type of token from a set of reusable, cross-industry components, including existing token definitions, creating a specification that includes all of the business ingredients for any implementation.”.
The Computerworld article describing the announcement compares this effort to Libra and then states:
“The framework’s template approach and the tools to facilitate token workshops make exploration and innovation as easy as possible, the TTI group stated in a release. By using rich metadata, the framework facilitates automation like code generation, verification, and certification that business users don’t need to understand but is extremely valuable to developers. Using the GitHub repository, teams can map business requirements to specific blockchain code or solution implementations allowing for discovery and use increasing
“What we needed to do was put it [the TTF spec] through some exercises to make sure it worked right,” Gray said. “What we’re seeing now are their drafts that are also being used to learn. People can learn about tokens by looking at real-world examples…, concepts that are not grounded in cryptocurrency that are modeled after real-world B2B scenarios.”
A TTF-based token can represent any number of goods, commodities or fiat-currencies, all of which can be defined by the business creating its specific flavor of token. For example, tokens can represent rewards points at a retail store, real estate, precious gems, artwork or simply government-backed cash – basically whatever value the creator wants to give it.
“Anyone can understand it; you don’t have to be a programmer, but you can follow the links all the way down to the source code as a developer to see how they did it and reuse that code on the front- and back-end,” Gray said.”
Some of the members of the initiative include Accenture, Banco Santander, ConsenSys, Digital Asset, EY, IBM, Intel, J.P. Morgan, Microsoft, and R3.
While the press release touts that the Token Taxonomy Framework is independent and is operational on any technology, including blockchains or databases, it appears that the GitHub repository leans towards the Ethereum environment.
For example, the article goes on to identify a Santander implementation of a TTF token that is tied to an Etherium smart contract which restricts access to “entities who’d passed the know-your-customer (KYC) regulatory process.”
If the TTF identifies rules and restrictions are associated with the token, those rules and restrictions will need to be implemented by the environment the token resides in. Even with GitHub smart contract libraries like OpenZeppelin that have mappings to implement TTF behaviors, there remains a not insignificant chance that errors will be made in coding those restrictions.
Indeed one wonders if it wouldn’t be better if a virtual machine that enforces the TTF rules had been included as a part of the specification and the GitHub library.
Overview by Tim, Sloane, VP, Payments Innovation at Mercator Advisory Group
