Global Cryptocurrency Classification Standard: Advancing the Crypto Industry
On April 3rd, it was announced that 21Shares, a European cryptocurrency ETP issuer, has collaborated with CoinGecko to release the Global Cryptocurrency Classification Standard (GC
On April 3rd, it was announced that 21Shares, a European cryptocurrency ETP issuer, has collaborated with CoinGecko to release the Global Cryptocurrency Classification Standard (GCCS). This standard is classified at the protocol level and token level, respectively.
21Shares collaborates with CoinGecko to release the Global Cryptocurrency Classification Standard (GCCS)
The cryptocurrency market has witnessed significant growth over the past decade, with the total market capitalization reaching over $2 trillion. As the market continues to expand, the need for standardization and classification becomes more vital. To this end, on April 3rd, 2021, 21Shares, a European cryptocurrency ETP issuer, announced its collaboration with CoinGecko to release the Global Cryptocurrency Classification Standard (GCCS). This standard marks a significant step towards the advancement of the cryptocurrency industry’s organization and transparency.
What is the Global Cryptocurrency Classification Standard (GCCS)?
GCCS is a protocol-level, and token-level classification standard for cryptocurrencies. This standard aims to provide a comprehensive, industry-wide taxonomy of tokens, protocols, and related assets. GCCS focuses on broad categorization, grouping cryptocurrencies based on technical attributes, use cases, and characteristics.
The protocol-level classification focuses on the overarching categorization of cryptocurrencies, assigning them to either the transactional or platform clusters. Transactional cryptocurrencies and tokens focus on facilitating peer-to-peer transactions, while platform coins act as the backbone of a blockchain ecosystem.
On the other hand, the token-level classification categorizes cryptocurrencies based on their use cases and their technical attributes. GCCS includes five token-level categories: currency tokens, utility tokens, asset-backed tokens, asset tokens, and hybrid tokens. These categories provide a more in-depth analysis of cryptocurrencies, enabling investors and enthusiasts to better understand their investments.
Why is standardization essential for cryptocurrencies?
Cryptocurrencies are a relatively new asset class, and their underlying technologies continue to evolve at an unprecedented rate. This rapid pace of innovation means that new tokens and protocols enter the market frequently, making it increasingly challenging to categorize and understand the diverse ecosystem.
Standardization is vital for the broader adoption of cryptocurrencies. It provides investors and regulators with the information they need to make informed decisions. Additionally, a comprehensive classification standard creates a common language and framework that facilitates efficient and effective communication across the industry.
Impact and benefits of GCCS
GCCS is a significant development in the cryptocurrency market, demonstrating how the industry is maturing and taking steps to become more transparent and organized. Here are some of the benefits and impacts GCCS will have on the industry:
Improved clarity and transparency
The broad categorization of cryptocurrencies allows for a more efficient and effective analysis of the industry. Due to its comprehensive structure, GCCS will enable investors and regulators to accurately compare and contrast cryptocurrencies, leading to a better understanding of the market’s underlying trends and drivers.
Better decision-making
By providing a classification standard, investors will have access to standardized information that promotes informed and confident decision-making. This access to information creates a more level playing field for investors, allowing them to make informed investment decisions based on standardized metrics.
Facilitates the development of new cryptocurrency products
Standardization is a critical step in the development of new financial products. GCCS will enable the creation of new financial products that utilize cryptocurrencies as an underlying asset, such as ETFs and mutual funds.
Conclusion
The release of the Global Cryptocurrency Classification Standard is a promising development for the cryptocurrency market. GCCS is a comprehensive classification standard that will bring much-needed clarity and transparency to the market. By categorizing cryptocurrencies based on technical attributes and use cases, investors and regulators will have access to standardized information that promotes informed decision-making. The classification standard also paves the way for the creation of new financial products that utilize cryptocurrencies. Finally, as the cryptocurrency market matures, standardization will be essential for its continued growth and success.
FAQs
1. What is the purpose of the Global Cryptocurrency Classification Standard?
A: The purpose of the Global Cryptocurrency Classification Standard is to provide a comprehensive and industry-wide classification system for cryptocurrencies.
2. Why is standardization important for the cryptocurrency industry?
A: Standardization is vital for the adoption and growth of cryptocurrencies. It promotes transparency, facilitates efficient communication, and enables the development of new financial products.
3. How will GCCS impact investors and regulators?
A: GCCS will enable investors and regulators to make informed decisions by providing standardized information on cryptocurrencies. It also creates a more level playing field for investors and promotes transparency in the market.
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