Blockchain & Smart Contracts – FinTech and Blockchain Law Watch

Luxembourg Modernises the Custody Chain to Accommodate Blockchain Technology

Jan 29 2025

By: Dr. Jan Boeing, and Tanner Wonnacott

On 31 December 2024, the Luxembourg law of 20 December 2024 amending the existing legislative framework on dematerialised securities (Blockchain IV Act) entered into force. As background, dematerialization of securities occurs with the move from physical stock certificates to electronic bookkeeping. When this occurs, actual stock certificates are removed and retired from circulation in exchange for the electronic recording. Securities are then transferred between securities accounts by book transfer.

Hong Kong’s Security Tokenization Support Initiative – A Subsidy Program

Jan 22 2025

By: Jay Lee, Natalie Chow and Alvin Lam

Recently, Hong Kong Monetary Authority (HKMA) initiated accepting applications for Digital Bond Grant Scheme (the Grant Scheme) to financially support digital bond issuers for the duration of three years. The Grant Scheme aims to encourage broader adoption of “tokenization technology” in capital markets and foster the development of digital securities markets in Hong Kong.

Good News: California Amends and Delays Its Digital Financial Assets Law

Sep 30 2024

By: Jeremy M. McLaughlin and Joshua L. Durham

Good news for the cryptocurrency industry. On 29 September 2024, California Governor Gavin Newsom approved Assembly Bill 1934, which extends the time within which digital assets companies must obtain a license to engage in digital financial asset business activity under the Digital Financial Assets Law (DFAL). Entities now have until July 2026 to obtain licensure, which is a year later than originally planned.

SFC Circular on SFC-Authorized Funds with Exposure to Virtual Assets–Part 1

Feb 15 2024

By: Jay Lee and Anson Chan

Earlier this year, the US Securities and Exchange Commission approved 11 spot Bitcoin ETFs. In Hong Kong, in view of rapid developments of virtual asset (VA) products and growing investment products offering exposure to VAs, the Securities and Futures Commission (SFC) issued a circular, on 22 December 2023, detailing requirements for investment funds with exposure of more than 10% of net asset value (NAV) to VA seeking authorization for public offerings in Hong Kong (Circular).

SFC Circular on Intermediaries Engaging in Tokenized Securities Activities (Part 1)

Dec 29 2023

By: Jay Lee and Beatrice Wun

On 2 November 2023, Hong Kong’s Securities and Futures Commission (SFC) issued a circular addressing the participation of intermediaries in tokenized securities-related activities (the Circular). The move was timely, as we are seeing a growing interest among financial institutions in tokenizing traditional financial instruments in global financial markets.

The Circular supersedes the SFC’s 2019 Statement on Security Token Offerings (2019 Statement) and clarifies the meaning of tokenized and digital securities.

Tokenized Products of SFC-Authorized Investment Products Can Be Offered to Retail Customers in Hong Kong

Nov 20 2023

By: Jay Lee and Natalie Chow

The Securities and Futures Commission of Hong Kong (SFC) will now allow tokenized authorized investment products to be offered to retail investors. Recognizing the growing interest in the tokenization of investment products in Hong Kong, on 2 November 2023, the SFC issued a circular outlining the public offering scheme and requirements of tokenized authorized investment products under the Securities and Futures Ordinance for primary dealings. However, secondary trading of such tokenized investment products is not allowed yet.

Hong Kong Stock Exchange Launches a New Blockchain-Based, Real-Time Settlement Platform

Oct 26 2023

By Jay Lee and Beatrice Wun

Hong Kong Stock Exchange (HKEx) recently launched “HKEx Synapse” (Synapse), a new blockchain-based settlement platform to complement the existing post-trade infrastructure for Northbound Stock Connect. “Stock Connect” in Hong Kong refers to a market access program through which investors in Mainland China and Hong Kong can trade and settle shares listed on the other market via exchanges and clearing houses in the home market. “Northbound Stock Connect” refers to the market access program where investors in Hong Kong can have access to shares in Mainland China.

AUSTRALIA: Treasury Releases Token Mapping Consultation Paper

Feb 23 2023

By Daniel Knight and Oliver Herrmann

New licensing requirements for crypto service providers are coming, following a series of consultations launched last week by Treasurer, Jim Chalmers. The Government approach focuses on strengthening enforcement, bolstering consumer protection and ultimately establishing a new licensing framework.

The Future of Stable (Bank) Coins?: President’s Working Group on Financial Markets Urges Legislation Limiting Stablecoins to Insured Banks

Nov 03 2021

By Judith Rinearson, Jeremy M. McLaughlin, and Daniel S. Nuñez Cohen

On 1 November 2021, the President’s Working Group on Financial Markets (PWG), in conjunction with the Federal Deposit Insurance Corporation and the Comptroller of the Currency, issued a long-awaited joint “Report on Stablecoins” (Report). Per the press release (and a speech by Undersecretary of Treasury Nellie Liang), the Report is intended to “identify regulatory gaps related to “payment stablecoins” (defined as stablecoins that are designed to maintain a stable value and “therefore have potential to be used as widespread means of payment”), and to present recommendations for addressing those gaps.”

UK JURISDICTION TASKFORCE STATEMENT ON CRYPTO ASSETS AND SMART CONTRACTS – A “WATERSHED MOMENT”

Dec 19 2019

By Judith Rinearson and Philip Morgan

On November 18, 2019, Geoffrey Vos, Chancellor of the UK High Court, announced the launch of a “Legal Statement on Crypto Assets and Smart Contracts,” which he described as a “watershed moment” for English Law. The statement, which can be found here, brings new clarity to the likely status of both smart contracts and cryptocurrencies under English law.

A committee of experts has prepared the statement and, although technically it carries no binding legal authority, it is likely to be regarded as the most authoritative position available until the matters it covers are dealt with specifically by the English courts or by revised legislation.

Category:Blockchain & Smart Contracts