US SEC Chairman Announces Token Taxonomy Plan

At the Federal Reserve Bank of Philadelphia Fintech Conference, U.S. Securities and Exchange Commission (SEC) Chairman Paul Atkins announced plans to create a "token taxonomy" to clearly distinguish which cryptocurrencies are securities.

The initial classification includes: network tokens, NFTs, and digital instrument tokens are not securities, while tokenized stocks and bonds are. Atkins stated that the taxonomy will be based on the Howey Test (a 1946 U.S. Supreme Court case used to determine whether an asset is an investment contract). He pointed out that cryptocurrencies may be part of an investment contract, but this is not permanent. The nature of tokens will change as networks mature, code is released, control is decentralized, and the role of issuers diminishes.