A partnership between business reporting standards body XBRL US and ConsenSys was announced earlier this week, as the two have created a working group designed to standardize blockchain token creation, reduce transaction friction between different blockchains, and automate token tracking. If realized, the group’s efforts would reduce processing costs and increase transaction interoperability around the world. This standardization is believed by many to be among the most important challenges the industry must overcome before it can gain widespread acceptance of smart contract technology.
The tokens in question are digital representations of the types of assets likely to be at issue in blockchain-based smart contract agreements. Token standardization is necessary to create a uniform system for issuing these tokens in a way that permits them to be used on any blockchain platform. Without standardization, the cost savings, and transaction speed benefits provided by the blockchain would be lost as interoperability concerns come into play. As XBRL US President and CEO Campbell Pryde described it,
"Creating a standard method to tokenize transacted assets is necessary to communicate ownership and value. Without standardization, the speed, accuracy and automation promised by smart contracts on the blockchain, simply will not happen."
XBRL US members currently include companies and organizations like Deloitte, Swift and Thompson Reuters. These firms have all been actively exploring enterprise applications involving distributed ledger technology. XBRL and ConsenSys made news several months ago with the announcement that they were involved in discussions to create a blockchain accounting consortium.