The Future of Money
TARA L. WATERS ASHURST LLP What is money? A LAWYER’S VIEW
Medium of exchange
Promise to (re)pay
Store of value Contract
Obligation of debt
Unit of accounting
2 © 2018 Ashurst LLP Forms of money THE MONEY SUPPLY
Loyalty / Debit member- cards ship Commer- points Fiduciary cial bank money money Central bank reserves Coins & banknote Credit s cards (“cash”) E-money Gift cards Contact- less payment cards Crypto assets
Digital currency
3 © 2018 Ashurst LLP Cash is king USAGE OF MONEY
100%
90%
80%
70%
60%
50% Non-cash 40% Cash 30%
20%
10%
0%
UK US Italy Latvia Malta Spain Austria GreeceCyprus France FinlandEstonia Belgium IrelandSweden LithuaniaSlovakia Slovenia Germany Portugal Australia South Korea NetherlandsLuxembourg
Source: G4S World Cash Report 2018
4 © 2018 Ashurst LLP Cash vs. non-cash vs. crypto assets KEY BENEFITS
• Legal tender status • Easily accessible
• Convenient cash Cash • Convenient • Direct - • Direct • Anonymous • Pseudonymous • Can be used • Can be used Non remotely remotely • Able to transact • Able to transact in higher values in higher values
• Efficient Crypto assets • Able to transact in micro values • Secure • Regulated • Regulated • Unregulated*
* Mostly; subject to change
5 © 2018 Ashurst LLP Cash vs. non-cash vs. crypto assets KEY RISKS
• Expensive to • Complicated to • Complicated to manage manage manage • Vulnerable to • Vulnerable to • Vulnerable to
theft and loss cash theft and loss code flaws Cash • Easily used to - • Easily used to evade the law evade the law • Reliant on • Reliant on
Non payment private sector systems DLT systems • System • System transaction fees transaction fees • Slower Crypto assets settlement times • Techno-literacy requirements • Value volatility
6 © 2018 Ashurst LLP Bridging the risk-benefit gap TWO OPTIONS
• Privately-issued decentralised • Central bank-issued digital stablecoins currency
Source: Researchly
7 © 2018 Ashurst LLP The crypto challenge HURDLES TO ADOPTION
• Uncertain regulatory environment • Perceived and actual risks • Knowledge gap amongst consumer base & key participants • Cost of implementation/integration • Current focus on movement to overall “non-cash” over crypto
8 © 2018 Ashurst LLP Thank you! PLEASE GET IN TOUCH
Tara Waters Ashurst LLP [email protected] +44 (0)20 7859 2755
tlwaters
9 © 2018 Ashurst LLP About Ashurst GLOBAL REACH
With 25 offices in 15 countries and a number of referral relationships covering 10 time zones, Ashurst offers the reach and insight of a global network, combined with the knowledge and understanding of local markets.
Brussels Glasgow Frankfurt London Paris Munich Milan New York Madrid Beijing Washington DC Tokyo Abu Dhabi New Delhi Shanghai Hong Kong Jeddah Mumbai Dubai
Singapore Jakarta Port Moresby
Brisbane Perth Sydney Melbourne Canberra
Ashurst offices ADTLaw LLC (Singapore Formal Law Alliance) Faisal Adnan Baassiri Law Firm (In Association with Oentoeng Suria & Partners (Associated Office with Ashurst LLP) Ashurst) Indian Law Partners (Best Friend Firm with Ashurst) Guantao Law Firm (Joint Operation Office)
10 © 2018 Ashurst LLP These materials are for training purposes only and are not intended to be a comprehensive review of all developments in the law and practice, or to cover all aspects of those referred to. Please take legal advice before applying anything contained in these materials to specific issues or transactions. For more information please contact the presenters or your usual contact.
66807878_1
© Ashurst 2018