Malta Blockchain Summit panel debate utility tokens vs securities

Malta Blockchain Summit brought up a number of key debates in the cryptocurrency space, one of which was security tokens against utility tokens, and whether there was space for both.

In the United States, as confirmed by panel host Miko Matsumura, all tokens whether they are called utility tokens or not are considered to be securities, thus making them liable for regulation and taxation.

However, the issue proved to be contentious among the panel, who had a series of insightful responses.

“Security tokens are the future” said Marco Mottana, CEO of CFX Advanced. “You want the government behind you when you launch these tokens on the market.”

“How do you see institutions coming into the space if they can’t trade securities?” Jane Zavalishina added.

Juwan Lee, co-founder of Hong Kong’s Blockchain centre, took a more diplomatic approach, stating: “I don’t think you can have a security token unless you had a utility token captivate the minds of the people. The ability to not have this venture capital way of raising money is the reason we’re having this conversation because the utility token set the stage for security token potential; adoption happens when people understand, When you look at a utility token most institutions don’t know how to value it.”

Zavalishina snapped back, claiming that utility tokens are not investments and thus aren’t relevant to institutions. She continued: “I don’t think the problem is that people don’t understand it. I think the problem is that utility tokens are actually not investments, they are irrelevant for the institutions”

The panel went on to discuss decentralised exchanges against traditional centralised versions. The overwhelming consensus was that a hybrid of the two would be ideal, incorporating a non-custodial aspect, much like Digitex Futures, with the positive elements of a centralised exchange, like fiat deposits and withdrawals for example.