Financial instruments entail liabilities: Ether, bitcoin, and litecoin do not

【Author】 Callens, Evariest

【Source】COMPUTER LAW & SECURITY REVIEW

【Abstract】The financial assets that are subject to major EU financial legislation (i.e. (designated types of) financial instruments) have traditionally been defined in a largely exemplary and circular manner. The recent proliferation of 'non-traditional' financial assets, such as cryptocurren-cies and stablecoins, is increasingly challenging the viability of these pragmatic financial asset definitions. Through the analysis of the technologies and functionalities underpin-ning non-traditional financial assets, legal scholarship has aimed to categorize novel assets within the existing framework of financial asset definitions. Although a solid understand-ing of e.g. distributed ledger applications and cryptography appears a prerequisite for future policy and legislative interventions, contemporary EU financial legislation is mostly indif-ferent to the technologies on which financial assets may be wired. Categorizations based on the purposes that non-traditional assets may serve (i.e. payment, utility, and investment) are more relevant to financial law, but suffer from subjectivity because they depend on the asset usage by the asset holder. Against this backdrop, this paper proposes a novel systematiza-tion of non-traditional assets that is based upon the conceptual substructure of the assets within the scope of EU financial legislation. More specifically, this paper submits that, irre-spective of underlying technologies and functionalities, all assets that are subject to major EU financial legislation have a conceptual common denominator: they entail the liability of an entity and, hence, have intrinsic value. The proposed categorization singles out a well-defined group of novel financial assets that is not subject to EU financial law (i.e. assets that only have extrinsic value). Different from functionality-and technology-based categoriza-tions, the suggested approach allows to eradicate some ambiguities that are present in the existing taxonomies. By exploring the conceptual common denominator of the financial assets that are subject to EU financial legislation, this paper aims to foster debate on the circular and exemplary character of financial asset definitions in EU financial legislation in general and the relation of these definitions to novel types of financial assets in particular. (c) 2020 Evariest Callens. Published by Elsevier Ltd. All rights reserved.

【Keywords】Financial instruments; Transferable securities; MiFID II; Intrinsic v; extrinsic asset value; Cryptocurrencies; Stablecoins; Bitcoin; Ether; Litecoin; Ripple

【发表时间】2021

【收录时间】2022-01-02

【文献类型】Article

【论文大主题】去中心化金融

【论文小主题】去中心化金融技术

【影响因子】2.707