Category: Blockchain & Smart Contracts

1
ASX Takes First Steps in introducing its Blockchain-Based Replacement to CHESS
2
Bank of Canada and Monetary Authority of Singapore jointly publish report on the use of blockchain in making cross-border payments
3
Italy’s legal recognition of blockchain-based timestamping
4
More Companies Adopting Blockchain Solutions
5
Australian Government announces the establishment of the national blockchain roadmap
6
American Bar Association Publishes White Paper on Digital and Digitized Assets
7
Empire “Blockchain” Building
8
K&L Gates Links with Global Legal Blockchain Consortium
9
Blockchain and Data Protection: Trustless Should Not Mean Distrusted
10
Global AML Regulator Amends Its International Standards for Virtual Assets

ASX Takes First Steps in introducing its Blockchain-Based Replacement to CHESS

By Jim Bulling, Felix Charlesworth and Andrew Fay

On 30 April 2019, Australian Securities Exchange (ASX) released the first of seven “drops” of software code into the “Customer Development Environment”. This marks the beginning of the introduction of the new equities clearing and settlement system, which ASX is developing to replace the existing CHESS system. The new system is based on distributed ledger technology (DLT) and promises to provide customers with access to real-time, synchronised, source-of-truth data.

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Bank of Canada and Monetary Authority of Singapore jointly publish report on the use of blockchain in making cross-border payments

Jim Bulling and Felix Charlesworth

Two central banks have taken steps to facilitate cross border payments through the use of blockchain. On 1 May 2019, the Bank of Canada (BOC) and Monetary Authority of Singapore (MAS) jointly published a report on their trials of settling tokenised digital currencies across different blockchain platforms (Report).

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Italy’s legal recognition of blockchain-based timestamping

By Claude-Étienne Armingaud and Alessandra Feller

Italian law no.12/19 dated 11 January 2019 (the “Law”) came into force on 13 February 2019 and cemented the legal enforceability of electronic timestamping performed through blockchain technologies.

As part of a national reform pertaining to the simplification of administrative formalities for companies, the Law explicitly states in its Article 8 ter, 3° that “storage of a computerized document through the use of technologies passed on distributed ledger creates the same legal effect as ‘electronic time stamp’”, as defined in the European Regulation no. 910/2014 on electronic identification and trust services for electronic transactions dated 23 July 2014 (“eIDAS”).

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More Companies Adopting Blockchain Solutions

By Susan Kayser, Christopher Bloom and Eric Lee

While still an emerging technology, more companies are implementing blockchain technology to manage supply chains, track goods, prevent counterfeiting, increase security, and ensure traceability.  In a recent survey of global leaders, by auditing and financial services company KPMG, 48% of respondents stated they believe it is highly likely that blockchain will change the way their companies do business over the next three years, and 41% stated their company intends to implement blockchain technology during the next three years.

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Australian Government announces the establishment of the national blockchain roadmap

By Jim Bulling & Felix Charlesworth

On 18 March 2019, the Federal Australian Government announced its plan to establish the national blockchain roadmap (Roadmap) which intends to focus developing regulation, skills and capacity building, innovation, investment and international competitiveness in the emerging local blockchain industry.

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American Bar Association Publishes White Paper on Digital and Digitized Assets

By Clifford C. Histed

On March 13, 2019, the American Bar Association’s Derivatives and Futures Law Committee published a white paper called Digital and Digitized Assets: Federal and State Jurisdictional Issues.  As stated in its preface, this White Paper was prepared by members of the Jurisdiction Working Group of the Innovative Digitized Products and Processes Subcommittee (“IDPPS”) and their colleagues, who generously contributed substantial time and effort to this ambitious undertaking. The authors have sought to provide a comprehensive explanation of federal and state laws that may apply to the creation, offer, use and trading of digital assets in the United States, along with summaries of key initiatives outside the United States. The White Paper also recommends an analytic framework for considering potential issues of jurisdictional overlap between the Commodity Futures Trading Commission and the Securities and Exchange Commission under the separate federal statutes they each are responsible for administering.

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Empire “Blockchain” Building

Authors: Cameron Abbott and Sara Zokaei Fard

The New York City Economic Development Corporation (NYCEDC) is looking at 2019 with fresh eyes. Although digital coin prices plummeted in 2018, some by as much as 90%, NYCEDC has announced that it will open a blockchain centre in Manhattan. The blockchain centre is being developed by NYCEDC in partnership with blockchain industry leaders Future\Perfect Ventures and the Global Blockchain Business Council. 

It is reported that the blockchain centre will be a resource for industry professionals as well as those interested in learning about the technology. It will create a peer community that will provide business support, mentorship as well as public education to assist people to understand how blockchain can impact daily life. The block chain centre will also be utilised to convene bodies including from industry and government to further dialogue on a regulatory environment that supports both consumers and innovation.

Industry leaders have described it as “a nascent technology” and a “burgeoning innovation sector”. The question now becomes, should we invest in bitcoin, or the blockchain centre itself as Microsoft and IBM have done!

K&L Gates Links with Global Legal Blockchain Consortium

Global law firm K&L Gates LLP has joined the Global Legal Blockchain Consortium (GLBC), an organization of legal and technology industry stakeholders focused on increasing the security, productivity, and interoperability of blockchain technology.

To date, more than 120 large companies, law firms, software companies, and law schools have joined the GLBC to help in developing standards and policies that govern the use of blockchain technology in the business of law. Specific issues on which the consortium focuses include data integrity, authenticity, security, and privacy for contracts and documents; interoperability between corporate legal departments and law firms; productivity improvements in the operation of legal departments and law firms; and augmentation of existing legal technology systems.

Judith Rinearson, a partner in K&L Gates’ New York and London offices and one of the co-chairs of the firm’s FinTech practice leading K&L Gates’ involvement with GLBC, said: “We have been very strategic in how we have approached the enormous opportunities presented by the blockchain. Our membership in GLBC is a great fit in our overall strategy to harness the capabilities of the blockchain in order to benefit our clients.”

Last year, K&L Gates announced plans to implement its own private blockchain to assist in the exploration, creation, and implementation of smart contracts and other technology applications for future client use, a commitment that very few, if any, other major law firms have made.

Lawyers in the firm’s FinTech practice are part of a cross-disciplinary, global team focused on helping clients navigate regulatory, policy, and business issues surrounding the FinTech space, such as consumer financial services regulation, e-commerce regulation, fund formation, cybersecurity, finance, and intellectual property matters.

For more information please contact Becca Hatton at +1.202.778.9897 or becca.hatton@klgates.com.

Blockchain and Data Protection: Trustless Should Not Mean Distrusted

By Claude-Étienne Armingaud

Amidst the international tidal wave caused by the entry into force of the EU General Data Protection Regulation (“GDPR”) in May 2018, many half, or even false truths have been spread about hindrance on a global scale of innovative technologies. However, we must keep in mind that Europe has adopted a long-standing position of technology-neutral regulations and data protection is no exception.

Indeed, from a GDPR perspective, no technology would be prohibited or regulated by nature – only its application to a specific purpose may be regulated, inasmuch as it involves personal data -whether relating to the participants and miners or the payload data itself- and falls within its broad geographical scope (see our previous Alert for more details).

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Global AML Regulator Amends Its International Standards for Virtual Assets

By Jim Bulling and Felix Charlesworth

On 19 October 2018, the global anti-money laundering and counter terrorism financing watchdog, the Financial Action Task Force (FATF), made a series of amendments to its rules framework (Standards), in response to international developments in the use and exchange of virtual assets such as cryptocurrencies and other virtual tokens.

The Standards set out the FATF’s recommended framework of rules and measures which countries, including Australia, should adopt in order to combat money laundering and terrorist financing.

As part of the revised Recommendation 15, the FATF has written “to manage and mitigate risks emerging from virtual assets, countries should ensure that virtual asset providers are regulated for AML/CTF purposes“.

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