LPD Showcase: Digital assets and the future of financial services

Digital assets – what are they and how have they already become relevant?

• What are the new types of digital assets (crypto currencies and stablecoins, digital assets (representing real world assets or entitlements), utility tokens (intended to provide digital access to an application or service), NFTs? What is their interplay with traditional financial instruments and commodities through digitisation (central bank digital currencies, digital securities, tokenised deposits, crypto commodities)?
• Adapting private law to the digital asset ecosystem - how to reconcile digital ecosystems such as distributed ledgers, DeFi or smart contracts with existing private law and conflicts of laws regimes?
• Use of digital assets in financial transactions (custody, collateral, securitisation, derivatives, etc.)

The impact of digital assets on the financial system

• The impact of decentralisation and distribution on the financial ecosystem: issues of fragmentation, reliance on third party services, governance, responsibility of identifiable entities, etc.
• Are traditional intermediaries obsolete?
• Digital currency or AI-powered digital marketplaces (applications, e.g. infrastructures, insurance, financial services) and machine learning models (e.g. verifying integrity of credit scoring models or securing data processing)
• The illicit use of digital assets through fundraisings to finance criminal and/or terrorist activities

Regulatory responses and private law remedies

• Preventing systemic risk from crypto activities and regulatory responses (domestic and globally)
• The importance of adapting and harmonising legal regimes
• Application of insolvency regimes to digital asset businesses; segregation of digital assets held by custodians, recovery of digital assets
• Private litigation and criminal prosecution
• The impact on legal professionals and the wider legal profession (e.g. opinions on holding, pledging, payments and settlement of crypto and digital assets, legal certainty regarding privilege and confidentiality of communication on DLT) and how lawyers can drive positive change for their clients