28 Mar

The Hague Conference on Private International Law (HCCH) has launched a digital asset tokenization project to provide legal clarity for cross-border businesses dealing with digital assets. The initiative will cover different types of digital tokens and investigate initial legal queries regarding digital securities and managing blockchain-based digital assets.

The intergovernmental body seeks to elucidate the jurisdictional aspects and international enforcement of legal decisions for cross-border businesses.

A proposal suggests that CGAP conducts a study on the private international law obstacles associated with digital tokens.

A new suggestion advises CGAP to authorize a study on the private international law impacts of digital tokens, encompassing real estate tokens, utility tokens, payment tokens, NFTs, and stablecoins. Excluded from the study are securities, central bank digital currencies, and carbon credits, as they are already being examined in a different project. The study's objective is to present a report with recommendations to CGAP during a planned meeting in 2025.

A collaborative initiative identifies tokenization as a primary area of focus

Members will be asked to suggest relevant experts for the study, including legal and technical specialists in digital tokens, along with individuals experienced in national digital token initiatives.

Following the endorsement of digital asset principles in 2023, the International Institute for the Unification of Private Law (UNIDROIT) collaborated with the HCCH on a joint effort. Through a series of meetings, they proposed potential areas for future endeavors.

Their focus included applying existing custody rules (as defined by UNIDROIT) to scenarios extending beyond traditional custody and delving into the legal ramifications of "linked assets" (tokenized assets).

Traditional financial institutions are increasingly intrigued by the potential of tokenization

Moody's recently noted a significant surge in the value of tokenized funds, driven by US treasury tokenization. Similarly, Bank of America foresees tokenization reshaping financial and non-financial markets in the coming years.

March 2024, Cryptonitauae

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