Regulation has always been a controversial talking point in the cryptocurrency space. On one side you have users who are against regulation, arguing that it goes against the principles of decentralization and a free market. On the other side, you have users that believe regulation is needed for crypto to reach mass adoption, due to issues with user error, fraud, and the recovery or compensation of lost funds.
Regardless of what a user’s stance may be, the main driving issue behind major crypto adoption is the tokenization of non-blockchain assets. However, since these non-blockchain assets are regulated, surely the blockchain-based versions need to be compliant too right? This brings us back to the regulation and compliance argument.
Everest is a platform that is looking into the tokenization of non-blockchain assets in a compliant manner. In order to achieve this, the platform has introduced a new tokenization engine with its licensed CRDT token, which can be backed by any asset.
The token can be programmed to represent a wide array of assets ranging from fiat currency to stocks and commodities. The reasoning behind this is that more users will be able to access traditional assets due to the low barrier to entry for blockchain-based assets.
Since Everest owns a virtual financial asset custodian license, this will enable the platform to issue these assets in a compliant manner. It’s also the only platform that may issue or redeem the tokens which will back these blockchain versions of traditional assets.
Blockchain-based assets will be minted through the CRDT Engine which enables users to bring any traditional financial instrument on-chain. This works by using payment rails which enable multiple parties to transfer funds between each other, and Everest has access to local payment rails in nearly 50 countries.
Compliance and Blockchain-Based Assets
Exchange-traded stablecoins, especially those that are pegged to fiat currencies, are still facing murky regulatory waters. Leading stablecoins like USDT, with tokens available for sale, trading, purchasing, collateralization, etc. on exchanges around the world, have a regulatory nightmare to get approval outside the US, even if backed 1-to-1 with cash stored in local bank accounts.
The convertibility of a nation’s currency is managed and controlled, with dire consequences in emerging markets, so the idea that, for example, $20 billion of Thai baht is circulating with redemption rights outside of a central bank’s control, and on crypto exchanges in far-flung locations is nearly a non-starter.
There are many examples of countries imposing strict capital controls that limited the amount of cash that ATMs could dispense or individuals could leave the country with. Furthermore, the EU is currently drafting MiCA, a set of crypto regulations making crypto more closely resemble eMoney. Such coins will require issuance in line with a whole new regulatory playbook of various target jurisdictions.
With its custodial license, Everest is capable of using its CRDT Engine to tokenize any asset in a compliant manner without having to seek additional licenses for fiat in most jurisdictions it enters, and selectively for other assets.
Everest’s token architecture, coupled with its license allows it to establish local fiat accounts without needing additional regulatory approvals, thus empowering its partners & users to transact internationally. This, along with its wide access to local payment rails, enables it to work as a fast and cost-effective international infrastructure for the most complex financial products and protocols.
The CRDT Engine enables its users to access shares of Google (goog.c), Tesla (tlsa.c), and Apple (appl.c). In the case of fiat-backed stablecoins, Everest compliantly issued CRDTs for usd.c, eur.c, mxn.c, brl.c, sdg.c, etc. and secured bank accounts in countries. CRDTs work as part of Everest’s larger portfolio of services, which also includes user and business account creation with eKYC and regulatory-compliant transaction tracking.
By leveraging CRDTs, a utility token, along with Everest’s eKYC, wallet, and ledger, partners from banks to governments to end-users, can move traditional financial assets onto the blockchain space.
Everest’s structure leverages a decentralized platform that incorporates multiple components including EverChain, a scalable payment solution, EverWallet, crypto & fiat wallet, EverID, a native biometric identity system, and an API gateway. The services provided on the platform aim to make it easier for traditional finance to enter into crypto and Defi markets with the assurance of comprehensive regulatory compliance and security.
By using the platform, users without identification or access to institutional banking will be able to engage with these assets in tokenized form.
Conclusion
Blockchain technology has the power to act as a gateway to institutional financial assets for the average user. The blockchain space has grown in popularity due to its low barrier to entry, however, there need to be compliant and trusted tools in place if we want to access traditional assets in tokenized form. As the space continues to mature, we’ll see protocols that aim to make tokenized assets a reality for the average joe.
Disclosure: This story was submitted to HackerNoon by an independent contributor. Hence the information contained therein has also been researched and compiled independently.