One of the famous International Research Institute, University of Cambridge’s Center for Alternative Finance (CCAF), released a new report and stated that ‘common language’ gap is the obstacle to the adoption of cryptocurrency and the reason behind regulatory uncertainty around the crypto ecosystem.
CCAF highlights the major problem that lacks crypto adoption across the world is ‘standardized vocabulary’ – the institute urged to define ‘Crypto asset and Token’ in a specific way ahead of regulatory policies on cryptocurrency. The research institute hints that there are a variety of terms used, as such, it lacks a clear definition. It notes that;
“Even the term crypto asset lacks a specific definition… crypto asset and the token can have different meanings depending on the context in which they are used.”
Following which, the report notes that regulators are facing several challenges. First is the understanding of nuances of various terms, second being knowing what best fits for the particular regulatory objectives and finally to ‘identify that term/framework/terminology in a clear manner and to use it in every official statement.
Definitions Around Crypto Aspects Must be Refined
Nevertheless, the report categorized crypto tokens into three aspects – Payment or exchange tokens or Cryptocurrencies, security tokens, and utility tokens. According to CCAF report which referred to ‘a Multi-Dimensional Approach’ and explained the definition of these three terms;
- The first category – cryptocurrency is a means of value exchange
- Security tokens are defined as – an investment instrument
- Utility tokens are referred to as ‘access to a digital platform or service’
Besides these categories, the official CCAF paper also highlights the definition of crypto assets. It points its definition as the ownership and exercising the ownership rights of crypto assets. Such ownership gives the person an authorization to access and enable him to store the private key of the crypto wallet address.
Moreover, CCAF report states that 82 percent from 23 jurisdictions have distinguished crypto asset with the coins (which are built with the feature of securities). While analyzing such definitions, categories, and frameworks that have recently defined by few jurisdictions, CCAF report seeks all ‘these basic frameworks need to be refined’.