Tokes Platform Newsletter, July 2019 — State Sponsored Tokenization & Prospective Roadmap
The Tokes team has been hard at work preparing the Gateway for public release, and strategizing some larger changes and rollouts for Q4 of this year! This month’s announcements are brief, but will paint a more detailed scope of what you can expect from the Tokes team going through the end of 2019 and in to 2020. First, we will discuss the general framework of how Tokes aims to integrate with states for tokenized payments, and then outline a brief roadmap for the months ahead.
How does a state sponsored digital payment program work?
Per Assembly Bill 466, Nevada will facilitate an easy entry point for cannabis businesses to transact using tokens, whether consumer to business, business to business, or business to state. The system is not dissimilar to a familiar mechanism also found in Nevada; casino chips. Customers will exchange their cash for tokens, and these tokens are then transacted across the cannabis industry. At some point within the ecosystem, the tokens can then be converted into dollars. The tokens in this case are of course, digital, and transact through a suite of applications fulfilling both consumer, business, and state purposes.
The fee structure in such a model must be low enough for cannabis businesses to prefer a tokenized system over current models of vaulting and moving loads of cash — but high enough to fulfill the operating costs of a company such as Tokes. In Nevada, this program is expected to be up and running by July of 2020, with the state treasurer’s office developing the process hand in hand with companies in the lead up.
There have been several thrift banks and credit unions providing financial services to cannabis businesses, however these entities charge considerable fees for compliance, generally a price multiple of conventional payment processing fees. The idea of state operated banks has been floated as well, but independent commissions have determined that these would pose too great of a risk to the operating states. Ultimately, until there is legalization of cannabis at the federal level (a scenario that is still likely years away), there is no conventional banking pathway for cannabis merchants that is both cost effective and viable. As such, tokenized closed loop systems like Tokes and legislative efforts like AB466 provide a pathway to the services of a bank, but at a reduced cost with lower risk.
States however should take note, issuance of centralized, corporate tokens like Facebook’s Libra have come under fire recently. Given the proliferation of tools for merchant adoption of decentralized tokens with features that reduce the volatility risk associated with digital assets — like the Tokes Platform- we are now in a time where the technology has caught up with the business demands of the industry. Decentralized, tokenized payment systems can fulfill businesses’ financial and accounting needs, within the framework of FinCEN and other agency requirements. Given this, it is not a bold assertion to argue that we are quickly approaching a new era in which tokenized assets will be commonplace, but the tools to transact them will be indistinguishable from conventional payment software, both for the merchant and consumer.
These emerging trends give us great confidence in the proliferation of cryptocurrency and tokenized payment adoption in the coming years — a wave that we intend to be at the forefront of with our white-labeling initiatives. Which leads us to our next point of discussion…
General Roadmap 2019 to early 2020
As CEO Michael Wagner discussed last month, we are undergoing several larger new initiatives around our software and token in the coming months. While the specific details around key partners and hard release dates are still under wraps, it is an opportune time to share a few key points in our roadmap given recent discussions in our community.
- Beginning of engagement with new strategic marketing partner
- Announcement and start of new tokenomic/distribution model for Tokes (TKS)
- Public access to the Merchant Gateway (no more whitelist!)
* Brick and mortar — point of sale tools
* Web components — ecommerce tools
- Release of new white-labeled brands
- White-label availability of the software
* Customer deployments
* Large scale licensing opportunities
- Multiple exchange listing announcements
- Sales and business development efforts for new brands
- Enhanced and increased marketing efforts
Q2 2020 and Beyond
- Participation in Nevada’s closed loop pilot program
- Continued response to state and federal RFPs for blockchain deployment
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