Securities, intermediation and the blockchain: an inevitable choice between liquidity and legal certainty?

Abstract The practice of securities holding, transfer, and collateral has changed significantly over the past 200 years—moving from paper certificates and issuer registers, to an intermediated environment, and from there to computerization and globalization. These changes have made transacting more...

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Bibliographic Details
Published in:Revue de droit uniforme 2016-12, Vol.21 (4), p.612-639
Main Author: Paech, Philipp
Format: Article
Language:English
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Summary:Abstract The practice of securities holding, transfer, and collateral has changed significantly over the past 200 years—moving from paper certificates and issuer registers, to an intermediated environment, and from there to computerization and globalization. These changes have made transacting more efficient and thus rendered markets more liquid. However, the law has lagged behind and is now itself an obstacle to efficiency because international securities transactions are subject to considerable legal uncertainty. The latest global market development, a cryptographic transfer process commonly called the blockchain, is the most recent efficiency-enhancing change. It offers a unique possibility to create a consistent legal framework for securities from scratch, on the basis of a legal concept that, to some extent, resembles bearer securities. This article shows what the new international legal framework could look like in the light of experience gained from earlier developments.
ISSN:1124-3694
2050-9065
DOI:10.1093/ulr/unw040