Regulation of distributed ledger technology applications for financial services
Regulation of distributed ledger technology applications for financial services

The following Financial Services practice note provides comprehensive and up to date legal information covering:

  • Regulation of distributed ledger technology applications for financial services
  • Definition of distributed ledger technology and blockchain
  • How blockchain works
  • Private and public blockchain
  • Blockchain’s appeal
  • No trusted intermediary
  • Permanence and reliability
  • Transparency and cost efficiency
  • Applications of blockchain
  • Blockchain in financial services
  • More...

BREXIT: The UK is leaving EU on Exit Day (as defined in the European Union (Withdrawal) Act 2018). This has an impact on this Practice Note. For further guidance on the impact of Brexit on payment services regulation, see Practice Note: Impact of Brexit: Payment services and electronic money directives—quick guide.

A distributed ledger is a database that can securely record financial, physical or electronic assets for sharing across a network through entirely transparent updates of information. Its first incarnation was ‘blockchain’ in 2008. Blockchain, which has been known principally for the role it plays in enabling Bitcoin and other cryptocurrencies and crypto tokens such as Etherium, is a technology viewed by proponents as capable of revolutionising financial services. On one level, blockchain is a database for recording records of transactions or other information. On another, blockchain is a tool capable of powering a multitude of applications that could fundamentally change how financial services are currently provided.

Definition of distributed ledger technology and blockchain

It is difficult to come across a unified explanation of how one should look at the concept of distributed ledger technology (DLT) but in essence it can be described as a set of technological solutions that enables cryptographically secured records, or ledgers, of electronic transactions to be maintained by a shared or ‘distributed’ network of participants (so-called ‘nodes’) and not by a centralised

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