Was sind Digital Assets?

Digital Assets sind digitale Darstellungen von Vermögenswerten, die von keiner Zentralbank oder öffentlichen Stelle emittiert oder garantiert werden und nicht den gesetzlichen Status eines Zahlungsmittels besitzen. Sie können aber als Tausch- oder Zahlungsmittel akzeptiert werden.

Worin unterscheiden sich Digital Assets von traditionellen Wertpapieren?

Digital Assets existieren auf der Distributed-Ledger-Technologie (DLT) und werden im Gegensatz zu traditionellen Wertpapieren und mit Ausnahme von Kryptowertpapieren nicht in Depots, sondern in sogenannten Wallets („digitalen Schließfächern“) verwahrt. Dabei wird nicht das eigentliche Asset abgelegt, sondern ein einzigartiger Zugangsschlüssel, der sogenannte private key. Wer den Zugang zu einem private key hat, hat auch die Kontrolle und Verfügungsmacht über das digitale Asset. Aufgrund der besonderen Anforderungen an das Handling und die Verwahrung solcher Assets müssen gerade Finanzinstitute diese Technologie nicht nur verstehen, sondern sich auch zu eigen machen.

Welche Anwendungsfälle bieten Digital Assets für etablierte Finanzinstitute?

Die Anwendungsfälle dieser Kapitalmarktinnovation erstrecken sich vom Primärmarktgeschäft, das durch Initial Coin Offerings (ICOs) sowie Exchange Coin Offerings (ECOs) bereits eine kleine Revolution erlebte, bis hin zum Sekundärmarktgeschäft, das künftig durch DLT-basierte Wertpapiere eine neue Erscheinungsform von Schuldverschreibungen, Fondsanteilen und Aktien im Repertoire hat.

Digital-Assets- und DLT-Regulierung, Digital Assets and DLT regulation

Regulation as a driver for DLT and Digital Assets adoption

Thoughtful regulatory guidance and boundaries are a key driver for further DLT and Digital Assets adoption.

While in the early days of DLT and Digital Assets, the lack thereof hindered the adoption of DLT & Digital Assets among traditional financial institutions, many jurisdictions have now started to put in place respective regulatory frameworks. These allow banks and other institutions to trial use cases in protected environments. Besides, the recent crypto industry turmoil, caused inter alia by the collapse of FTX, Celsius, etc., demonstrated the need for further regulation that protects market participants and investors.

At the same time, it is DLT regulation that sometimes still prevents DLT from living up to its full potential, especially when it comes to smart contract-based execution of transactions. Further regulatory changes are thus likely and necessary if DLT is to prevail. Illustratively, in real estate most jurisdictions currently tie a building’s change of ownership to a visit to a notary and an amendment in the land registry. Thus, the mere exchange of a token does not suffice for a change in ownership. An indirect tokenization via SPVs may serve in a transitional model but contradicts the underlying principle of DLT. The same applies to asset servicing, where the cash leg currently cannot be crypto-based.

Nevertheless, especially in Europe regulators have taken a leading position and regulatory frameworks for DLT & Digital Assets are expanding rapidly. The EU, UK, Switzerland, Liechtenstein and several other European countries have initiated, passed or adopted corresponding legislation. The same of course applies to regulators in, for example, UAE, Singapore or Hong Kong. So, what have regulators focused on so far?

“Thoughtful regulatory frameworks are key for the adoption of DLT and Digital Assets. With increased regulatory clarity, institutional adoption of DLT and Digital Assets use cases is expected to accelerate even more.”

Cedric Lüscher, Manager, zeb

Definition of Digital Assets

First of all, the notion of DLT & Digital Assets, including the related classifications, needed to be established in legislative text. At European level, cryptocurrencies fall under the MiCA Regulation (Markets in Crypto-Assets Regulation), whereas security tokens are mostly covered by the DLT Pilot Regime. In Germany, cryptocurrencies, utility tokens and security tokens are regulated by the German Banking Act (KWG), while the Electronic Securities Act (eWpG) regulates the unique class of crypto-securities. In Switzerland, the DLT Act amended several capital market-related laws and provides regulations for cryptocurrencies and tokenized assets (i.e. introduction of specific rights for ledger-based securities). The same applies to Liechtenstein with the TVTG.

Digital Assets and AML Compliance

Another key focus area of regulators has been the prevention of money laundering and terrorist financing through the usage of pseudonymous or anonymous Digital Asset transactions. Focusing on European institutions, the European Transfer of Funds Regulation, which largely follows the FATF guidelines updated in June 2019 (“travel rule”), formulates rules to reduce the anonymity of digital asset transactions. It tightens AML requirements for digital asset service providers. Moreover, regulators in Germany and Switzerland have increased AML requirements and enforced KYC verifications of parties conducting Digital Asset transactions in the German KryptoWTransferV (Crypto Asset Transfer Regulation) and the Swiss AMLO (Anti-Money Laundering Ordinance). Thereafter, virtual asset service providers (VASPs) are obliged to exchange certain information about the originator and beneficiary of digital asset transfers between VASPs. While an exchange is possible manually, many companies are trying to establish standardized protocols for the exchange of information. However, so far, no clear market standard has been established and it remains to be seen how the “travel rule” requirements will be fulfilled.

Digital Assets Services Licensing

When it comes to licensing individual use cases, e.g. Digital Assets custody or brokerage, different jurisdictions pursue different approaches. While in Switzerland no individual licenses for crypto use cases are granted, Germany, for example, has introduced a crypto custody license or crypto brokerage license. The latter also applies to Liechtenstein, which defines ten roles for VASPs. The zeb team is happy to provide an overview of the situation in your respective jurisdiction.

Regulation of DLT-based market infrastructure

Aside from the offering-oriented regulation of Digital Assets, DLT-based, i.e. decentralized, market infrastructure as such has also been in focus. At EU level first regulatory features have been included in the DLT Pilot Regime, which aims to create an innovation-friendly framework for DLT-based settlement systems, multilateral trading facilities and the combination of both. It exempts market infrastructure providers from certain regulatory obligations. In Switzerland, DLT-based market infrastructures are regulated through the DLT Act. The latter focuses primarily on the operation of DLT trading facilities and the execution of digital asset trading. Meanwhile, German regulation in the context of DLT-based market infrastructure is still at an early stage of development and primarily regulates crypto-securities registers in the eWpG.

Are you looking for support in the area of DLT / Digital Assets or interested in a discussion with our team of experts? Contact us at any time - we look forward to exchanging ideas with you.

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Norman Karrer

Partner