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ARTICLE · 05 MARCH 2018

Distributed Ledger Technology: A Regulatory Conundrum

Shepherd and Wedderburn
Shepherd and Wedderburn
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Europe already having introduced rules on the use of distributed ledger technology, we consider whether others will follow suit.

European UnionFinance and Banking
Hamish Patrick
Hamish Patrick
Peter Alderdice
Peter Alderdice
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An increasing awareness among financial regulators of the benefits and risks of distributed ledger technology, such as the blockchain which underpins cryptocurrencies, has revealed the conundrum it poses – to regulate or not to regulate? With one financial regulator in Europe already having introduced rules on the use of distributed ledger technology, we consider whether others will follow suit.

On 1 January 2018, the Gibraltar Financial Services Commission (GFSC) became the first regulator to introduce a framework to regulate the use of distributed ledger technology (DLT). While DLT is not currently the subject of UK or EU regulation, the pace of discussions around its applications in the financial sector highlights that regulators are now starting to grapple with this rapidly evolving area.

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