As the new economy moves rapidly and inevitably towards digitization, it carries with it hopes of higher productivity and infinite opportunities for both investors and entrepreneurs through the decentralized, unregulated, albeit largely volatile realm of Digital Assets.
Faced with sweeping and dramatic changes in market behavior, key players in the financial industry are compelled to cope, to adapt, and to rapidly evolve.
Veritas Global offers your business a competitive advantage in the new economy.
With financial technology and corporate law at the fundamental core of our practice, our team is reinforced by years of experience and a comprehensive knowledge of various types of transactions, particularly blockchain and smart contracts.
From structuring and documentation, to regulatory clearance and technical guidance, Veritas Global is ready to provide strategic counsel on all legal and regulatory issues surrounding the incipient domain of digital asset ecosystems.
Understanding digital assets in the new market
The Bloomberg report on The New Economy Drivers and Disruptors indicates that the digital economy “holds out the promise of dramatic increases in productivity.” Propelled by unparalleled technological developments in communication, close to four billion people are now connected to the internet – particularly in high-income markets where four out of five individuals maintain online presence.
Undoubtedly, the emergence of blockchain technology has created new levels of transparency and efficiency to the market, thus irreversibly changing the way people spend, save, and secure their money.
The ability to “tokenize” and trade virtual properties has also led to the creation of new market classes.
At present, there are three main types of digital assets:
- Cryptocurrency – A type of “virtual money” that functions as a form of digital cash. Backed by a true peer-to-peer protocol, transactions are verified and records maintained by a decentralized system using cryptography, rather than by a centralized authority such as government.
- Utility Token – A digital asset that is used to finance a network by providing its buyers with a guarantee of being able to consume some of the network’s products. While they have utility within a specific ecosystem, the token remains a speculative tool and does not provide the rights of ownership or investment in a company.
- Digital Security – Any token that represents a share of ownership or investment in a company, much like stocks but with digital ownership rights and a decentralized ledger. Security tokens represent material assets like real estate, gold, art or real estate, as well as non-material assets like shares of company stocks.
Future-proof your digital assets
Recognizing digital assets as one of the factors that has been revolutionizing the financial industry at a remarkable rate, an article published by the US Chamber of Commerce on Fintech and Digital Assets raised the need to clarify the regulatory treatment of digital assets.
The report emphasized that while there has been considerable growth in the marketplace for digital assets, regulatory frameworks continue to fall behind.
“The market has recognized the possible benefits of digital assets—including lower transaction costs—and has expressed a clear interest for this marketplace to grow,” the paper indicated. “However, the regulatory framework has not kept up with the technological advances that underpin digital assets.”
This is echoed by a similar report by Cambridge Center for Alternative Finance, which points out that traditional understandings of the laws of ownership and possession do not directly translate to digital assets. “While it is clear that the market expects the law to treat digital assets as objects of property rights,” it asserts, “it is not always straightforward that these concepts apply to digital assets.”
Regulatory uncertainties make it difficult for FinTech innovators to bring new products to the market as they are often unsure what regulatory framework a certain type of digital asset will fall under, or how industry regulators would choose to interpret existing laws.
With all these complex issues surrounding digitalization and innovations in financial services, Veritas Global can be your trusted ally in achieving remarkable gains from investing in digital assets and achieving your business goals with greater confidence.
Our commitment to an international presence, personalized service, and innovative solutions ensures exceptional support that is up-to-date and commercially viable.
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