DRC Founder Selina Lin was invited to attend the 2018 The Future of Token Economy Summit held by SUSS on November 30 in Singapore. At a separate interview held at the side of the Summit, Selina, Dr. Pei Sai Fan, Adjunct Professor of National University of Singapore and Director of Lee & Pei Finance Institute and Peter Douglas, Director of the CAIA, explored how the Token Economy can promote higher level of collaborative development. They addressed the importance of establishing standards for the token economy. The token economy paves the way for an open, autonomous, inclusive, and cross-bounder ecosystem and promote collaboration among many stakeholders. A combination of centralized supervision and decentralized technologies may become a convention in future token economy.
1Token economy needs rating framework
CAIA has 10,000 members around the world, who are investment decision makers focusing on alternative assets. Over the last few years, CAIA has been observing how technology affects the investment world as technology development fosters a new range of resources and methods of using data. In alternative investment areas, one should always be on the lookout for new assets and new approaches to them. However, Peter doesn’t think token products can serve as a usable asset class for institutional investors just yet.
Peter considered that a reliable market scale and an in-depth understanding of the driving factors to token valuation, would be the prerequisites for investing in token products. Given the proliferation of different digital assets and platforms, it is not an easy task to distinguish good assets from the rest. Therefore, it would be very helpful to have authoritative platforms like DRC to provide a rating framework to evaluate the strengths and weaknesses of these token products.
2A combination of centralized supervision and decentralized technologies will become a convention in the future token economy
Selina believes that most assets will be digitalized and tokenized in the future, where token economy pave the way for an open, autonomous, inclusive, and cross-border ecosystem. However, even in the token economy era, centralized governments will still maintain their fundamental role establishing standards and guiding practices in the world. A balanced combination of centralized supervision and decentralized technologies will become a convention in the future token economy.
Dr. Pei opined that the token economy needs both decentralization and centralization, and we are likely to move from the current largely decentralized model to where decentralization can drive efficiency, democracy, and inclusiveness. We also need centralization in terms of governance and regulation in order to maintain social order and stability. Moreover, a lot of institutional infrastructure needs to be put in place, for instance, in valuation, accounting, taxes, and regulatory compliance for cryptocurrency companies all need to become standard.
3Technology makes the world more inclusive
Peter also raised a few challenges for the token economy. When it becomes a liquid and respected medium of exchange, it may pose a threat for central banks around the world. Also, if the smart contract is used in global commerce, it will impact the existing finance and legal systems. Hence the degree of decentralization depends as much on political and social institutions, as it does on technology.
Dr. Pei expressed that the token economy completes, not competes with existing institutions. Technology improves processes and makes it a more inclusive organ.
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