Clifford Chance

Fintech in 2023: Five trends to watch

Last year was a tough one for fintech with the collapse of a number of high-profile industry players, as well as wider economic pressures including the war in Ukraine, supply chain challenges and high inflation. Following the bold predictions we made last year, we have spotlighted five key trends for fintech in 2023. From where the crypto markets will go next, to upcoming digital capital markets and sustainability developments, to what we'll see for AI and financial services in the metaverse, our experts share their predictions.

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Fintech

The developing regulatory landscape for cryptoassets in the EU and UK

The regulatory landscape for cryptoassets is set to change in both the EU and the UK, through the introduction of new, comprehensive regulatory frameworks for cryptoasset service providers. With MICA set to come into force in the EU, the UK is coming under some pressure to provide clarity on the scope of its new regime quickly, to provide firms with certainty they need and details of both regimes are yet to be fleshed out by regulators starting later this year.

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Fintech

Crypto Litigation & Arbitration Trends to Watch in 2023

Whether or not the "crypto winter" thaws this spring, the legal repercussions will reverberate for some time. As well as attracting greater interest from regulators and legislators, the events of 2022 are likely to generate significant volumes of civil litigation and arbitration as investors and consumers seek to recover losses. Below are some key trends to watch out for in 2023.

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Fintech

Is the decentralised governance of Bitcoin really a myth?

The recent Court of Appeal decision in Tulip Trading Limited v van der Laan and Others [2023] EWCA Civ 83 has generated significant interest in the Bitcoin community and the wider digital asset sector. The claimant asks the English court to order software developers alleged to control various Bitcoin blockchains to modify source code to restore the claimant’s control over Bitcoin for which its private key has been stolen.

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Banking & finance

Banks' exposure to crypto – what do you need to know?

On 16 December 2022, the Basel Committee on Banking Supervision (BCBS) published a finalised prudential standard on banks' cryptoasset exposures (the Cryptoassets Standard) following two rounds of consultation. We look at what the final proposals say and the impact for market participants.

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Fintech

Updates on new VASP licensing regime in Amended AMLO

In this article we explore the key concepts under the Amended AMLO and outline the amended extended timeline for commencement of the licensing regime for VASPs.

HM Treasury consults on regulation of cryptoassets other than stablecoins

HM Treasury has proposed a comprehensive regulatory regime for firms engaging in certain cryptoasset activities. It is enabled by the addition of a new Clause 65 into the Financial Services and Markets Bill (FSMB), which will allow HM Treasury to expand the UK's regulated activities framework to encompass cryptoasset related activities.

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Fintech

DLT developments in debt capital markets

While 2022 brought challenging market conditions, it was an interesting year for innovation in the capital markets.. In this article, we look ahead to some of the key developments for 2023.

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Proposed UK market abuse regime for cryptoassets

The UK Treasury has released its consultation on the future financial services regime for cryptoassets, including a proposal for a cryptoasset market abuse regime.

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Fintech

Crypto regulation: the introduction of MiCA into the EU regulatory landscape

Just over two years after it was first proposed, the agreed text of the new Markets in Crypto-assets Regulation (MiCA) has beenreleased. MiCA aims to create an EU regulatory framework for the issuance of, intermediating and dealing in, cryptoassets. It will introduce licensing and conduct of business requirements as well as a market abuse regime with respect to cryptoassets. With parts of MiCA anticipated to come into force from spring 2024, we look at what issuers of stablecoins and other cryptoassets, custodians and other crypto service providers need to know now.

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Hong Kong to allow retail access to virtual asset ETFs and considering legalizing retail virtual asset exchanges

The Hong Kong Government issued a policy statement on 31 October 2022 in conjunction with the city's flagship Hong Kong Fintech Week conference, which unveiled several key changes to the city's regulatory stance towards virtual assets (VA), in particular allowing retail access to VA futures ETFs, and launching consultation on the degree of retail access to VA, among other updates.

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Cyber

DORA: Exploring what the new European Framework for Digital Operational Resilience means for your business

On 10 November 2022, the European Parliament voted to adopt a new EU regulation on digital operational resilience for the financial sector (DORA). With obligations under DORA coming into effect late in 2024 or early 2025 at the latest, in this article we take a closer look at its impact and consider what the regulation will mean for firms, their senior managers and operations and what firms should be doing now in preparation for day one compliance.

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Fintech

Italian government calls for new crypto assets tax treatment

The Italian Government published the bill of the Budget Law for 2023 envisaging the introduction of a set of rules for the taxation of crypto assets. As from they were first launched in 2009, cryptocurrencies and, more in general, crypto assets have not been the object of specific tax laws. Their tax treatment has been based on general principles and (heavily criticized) guidance issued by the tax authority.

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Fintech

Cryptoassets - considerations for market participants in times of distress

The cryptoasset markets are facing an extended period of volatility and uncertainty following the bankruptcy filings of significant market participants. Liquidity and solvency concerns are increasing across the market as the fallout from such insolvencies is felt. As a result, crypto market participants would be well advised to review and consider the terms of their existing agreements, the position of their counterparties and steps that can be taken to protect themselves in all relevant jurisdictions in the event of future price fluctuations, further distress among market participants, and potential insolvency proceedings.

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Fintech

Ethereum Merge – What is at Stake?

On 15 September 2022, in a highly anticipated upgrade called "The Merge", the Ethereum Mainnet shifted from a Proof of Work (PoW) consensus mechanism to a Proof of Stake (PoS) consensus mechanism.The Merge is the second of a three stage upgrade process and is widely seen as one of the most significant events in the crypto industry to date in the search for a more scalable, energy efficient and publicly accessible Ethereum.

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Intellectual Property

NFTs – An Introduction and Some Key Intellectual Property Considerations

According to nonfungible.com, the global non-fungible token (NFT) market was estimated to be worth around $16.8 billion in 2021. In this article, we explore some of the key intellectual property considerations relating to NFTs.

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Banking & finance

UK Financial Services and Markets Bill: new rules for 'critical third parties'

The UK Financial Services and Markets Bill includes proposals to regulate cloud service providers and other designated ‘critical third parties’ supplying services to UK regulated firms and financial market infrastructures. HM Treasury would have powers to designate service suppliers as ‘critical’ and the UK regulators would have new powers directly to oversee designated suppliers, which would be subject to new minimum resilience standards.

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Native issuances of DLT securities in Luxembourg, France and Germany and admission to the Luxembourg Stock Exchange Securities Official List

Over the past few months, capital markets have seen an increased interest in the issuance of securities, notably debt instruments, natively on the blockchain or using other types of distributed ledger technology (DLT). We look at how Luxembourg, France and Germany have taken the lead by adopting specific legislation allowing companies to issue securities directly on the blockchain, and thus providing the required legal certainty.

Fintech

Global Fintech Update

Our weekly global fintech round-up, summarises fintech regulatory developments that have happened around the world along with our Clifford Chance fintech publications and upcoming events

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Tech

Tech Policy Horizon Scanner

The Tech Policy Unit Horizon Scanner is our monthly dive into the key tech policy and legislative developments around the world.

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Fintech

Global Crypto Round-Up

This monthly newsletter provides you with a monthly brief into the world of digital assets, keeping you up to date with regulatory developments, publications and events from across jurisdictions.

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