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Characteristics of utility
Utility Tokens vs. Security Tokens:
The BlueBenx token is a Utility Token, bringing payment token characteristics, as it was created to serve as an exchange system between fiat currencies and cryptocurrencies, as well as falling under the category of utility token, being an active crypto for accessing unique advantages within the BlueBenx Blockchain Bank platform and the BlueBenx ecosystem.
With the multiple uses to the BlueBenx token, we can highlight that it gives users of the ecosystem the right to exclusive features, benefits and programs, as well as rewards for loyalty to the company's system and services.
Utility tokens are titled differently and in accordance with the stages of regulation of the cryptocurrency market in different countries, by convention that regulation is not mandatory and that there is no characteristic of real estate assets in the locations where BlueBenx operates, we highlight:
- European Union: In the European Union, Directive 2009/110/CE of the European Parliament and Council of the European Union (EDM2), in its article 2, as well as the MLTFPA (Estonia) in its article 2, §3rd, item 9, provide definitions of virtual currency , conceptualizing as: "a value represented in digital form, which is digitally transferable, preserveable or negotiable and which individuals or legal entities accept as a payment instrument, but which is not the legal tender of any country or funds for the purposes of Article 4, no. 25, of Directive (EU) 2015/2366 of the European Parliament and of the Council on payment services in the internal market (...)”. From the understanding brought by the EU, it is understood that electronic means used as a means of payment for the purchase of goods or services are recognized as payment tokens. These tokens do not give rise to complaints about the issuer, as they serve as an exchange mechanism. In 2020, a study was carried out at the request of the Committee on Economics and Monetary Affairs, Thematic Department of Economic, Scientific and Quality of Life Policies, European Parliament, the document that, among other understandings, brings classifications and definitions on the categorization of cryptocurrencies, in this sense, the tokens can take more than one form. This hybrid characteristic of an asset is already recognized in several places around the world, given the content of the European Banking Authority report, as the tokens are classified according to requirements, which, not being opposed, may be cumulative, both in characteristics and in their consequences. According to the understanding of the European Banking Authority, it distinguishes the types of tokens, essentially demonstrating the differences between each of these types. Although the Report indicates the possibility of a token having a hybrid classification, it makes it clear that this characteristic exists only in the hypothesis of requirements that can accumulate without losing its essence.
- Switzerland: Switzerland is advancing fast in the understanding and creation of policies, being one of the reference countries for the constitution and legal framework of tokens and cryptocurrencies. The Swiss Financial Market Supervisory Authority (FINMA) published in February 2018 a document bringing definitions and concepts of token types, stating that this classification comes from the economic function of each token, where payment tokens are the tokens to be used, as a form of payment for goods or services, or as a means of transferring money or value, not generating claims against its issuer; Utility tokens are those intended to grant access to an application or service platform through a blockchain-based infrastructure; and Asset tokens are tokens that represent assets such as a debt or equity claim on the issuer, bringing in their scope promises of future profit sharing of the company or future capital flows, resembling in some respects the shares, obligations or derivatives of a company. Also according to FINMA guidelines, these definitions are not exclusive, it being fully possible and accepted by the Swiss Association the existence of hybrid tokens, hypotheses in which the characteristics add up.
- United States: In the United States, there is also a similar understanding that classifies tokens according to their use. In 2019, FinCEN (The Financial Crimes Enforcement Network), published a letter that classifies the ICOs (Initial Currency Offerings) of Financial Services Companies as non-bond offerings, despite this, before the entity, the ICOs must comply with other legal measures. In this letter, FinCEN states that: ...“a developer who sells convertible virtual currency, including in the form of ICO coins or tokens, in exchange for another type of value that replaces the currency is a transmitter of money (money transmitter)..." Since ICOs are considered money transmitters, they must be registered with FinCEN as a money transmitter company and comply with federal Bank Secrecy Act (BSA) guidelines. Furthermore, they must comply with a KYC process and maintain an adequate AML program. Complementing what is determined by FinCEN, the SEC also positions and classifies the tokens issued in a blockchain in several categories, bringing a very comprehensive understanding to this type of asset. The institution takes a stand demanding that companies that issue tokens structured as bonds and that therefore can represent property, promises to pay amounts in the future or other interests in an entity must follow the rules of the securities market and be in full compliance with the regulators . However, tokens that have characteristics more similar to licenses, merchandise or, which have value units. Or even those that act as records, deposit receipts, or give their owners the right to a software system must fall into another category. Therefore Utility Tokens are exempt from registration of securities.
- Brazil: The understanding of the Central Bank of Brazil classifies the so-called "virtual currencies" or "cryptographic currencies" as "digital representations of value, which result from the trust placed in their operating rules and in the chain of participants". As they are not issued by the Central Bank, they do not have a monetary standard and are not controlled by any monetary authority or country. Therefore, the entity does not regulate, issue, guarantee or interfere in the "virtual currencies". According to the institution, virtual coins have their own shape, denomination and value. Companies that issue or trade virtual currencies are also not controlled or regulated by the Central Bank of Brazil. Although there are projects, studies and institutions seeking to understand the various applications of cryptocurrencies and tokens, so far there is no specific legislation or regulation on the subject in the country.