Page 67 - FIGI: Security Aspects of Distributed Ledger Technologies

93 Smart contracts were first described in 1997, relating to vending machines. See Szabo, N (1997) Smart Contracts:
Building Blocks for Digital Markets.
94 In all then, a legal contract is replaced by computer code, and consequently the need for lawyers to be involved in the
chain of execution of the smart contract is mistakenly thought by some to be redundant. However, compliance rules
with one or more of the counterparties – or through peremptory regulations such as those dealing with AML rules or
the implication of tax laws – would probably require proper legal counsel.
95 European Central Bank (2018) Distributed Ledger Technology: Hype Or History In The Making?, available at https:// bit
.ly/ 2IO6ehd; R3 (2018) Blockchain And Central Banks- What Have We Learnt?, available at https:// bit .ly/ 2JGTslM; ccn
(2018) South Africa’s Central Bank Launches Ethereum-Based Blockchain PoC, available at https:// bit .ly/ 2NXzoww;
Finextra (2017) Ripple Boss Predicts Central Bank Adoption Of Blockchain, available at https:// bit .ly/ 2hFa8Bf; Althauser,
J (2017) Colombia Central Bank to Test Distributed Ledger Technology Corda, available at https:// bit .ly/ 2iJ3pGg
96 Baruri, P (2016) Blockchain Powered Financial Inclusion, available at https:// bit .ly/ 2JG6mAK
97 FinTechnews Singapore (2017) Will Singapore become a Regtech leader? Regulatory Reporting 2.0, available at https://
goo .gl/ cvQEbV
98 Baruri, P (2016) Blockchain Powered Financial Inclusion, available at https:// bit .ly/ 2JG6mAK
99 See Exhibit 14: Summary of Regtech Use Cases
100 FSB (2017) Artificial Intelligence And Machine Learning In Financial Services, available at https:// bit .ly/ 2lK4Be2
101 Finextra (2018) Cryptocurrencies, Sandboxes and Blockchain Experimentation Top Sarb Fintech Agenda, available
at https:// bit .ly/ 2swGsLd; Nation, J (2018) South African Reserve Bank's FinTech Programme to Pilot Quorum for
Interbank Transfers, available at https:// bit .ly/ 2JGpdvF
102 Akmeemana, C; Bales, D & Lubin, J (2017) Using Blockchain to Solve Regulatory and Compliance Requirements,
available at https:// bit .ly/ 2IKbfYf; Iansiti, M & Lakhani, K (2017) The Truth About Blockchain, available at https:// hbr .org/
2017/ 01/ the -truth -about -blockchain
103 Toronto Center (2017) FinTech, Regtech and SupTech: What They Mean for Financial Supervision, available at https://
goo .gl/ R3vWxH
104 Self-executing programs that run automatically on the distributed ledger when pre-defined requirements are met. CFI
(2017) What Happens If The Blockchain Breaks?, available at https:// bit .ly/ 2nB83mD
105 Stark, J (2017) Applications of Distributed Ledger Technology to Regulatory & Compliance Processes, available at
https:// bit .ly/ 2NVGyl7
106 MAS (2016) Singapore’s FinTech Journey – Where We Are, What Is Next, available at https:// bit .ly/ 2fHjkiE
107 For more on de-risking and its effect on financial inclusion, see Perlman, L (2019) A Refusal to Supply (Part 1): De-
constructing Trends In Financial De-risking and the Impact on Developing Countries, available at www .dfsobservatory
.com
108 ‘Digital Fiat Currency (DFC) is a term used by ISO TC68/SC7 for allocating currency code and is also known as Central
Bank issued digital currency.’ See ITU (2019) Focus Group on Digital Currency Including Digital Fiat Currency, available
at http:// bit .ly/ 2YUxIu7; ‘CBDC is a new form of money, issued digitally by the central bank and intended to serve as
legal tender. It would differ, however, from other forms of money typically issued by central banks: cash and reserve
balances. CBDC designed for retail payments would be widely available. In contrast reserves are available only to
selected institutions, mostly banks with accounts at the central bank.’ See IMF (2018) Casting Light on Central Bank
Digital Currencies, available at http:// bit .ly/ 2GbwxyT
109 Fiat money is a currency issued by a government which it has declared to be legal tender, a legally recognized medium
of payment which can be used to extinguish a public or private debt or satisfy a financial obligation. It is only backed
by the public confidence in the issuing government and the credit and faith in the issuer’s national economy. Bank of
England (2019) What Is Legal Tender?, available at http:// bit .ly/ 2XMixq8
110 CBDCs is distinguishable from the general usage of distributed ledger technology (DLT) and crypto-currencies,
covered in section.
111 See also BIS (2019) Proceeding With Caution – A Survey On Central Bank Digital Currency, available at https:// www .bis
.org/ publ/ bppdf/ bispap101 .pdf
112 See Adkisson, J (2018) Why Bitcoin Is So Volatile, available at http:// bit .ly/ 2O0jQgS; Williams, S (2018) How Volatile Is
Bitcoin?, available at http:// bit .ly/ 2GfqBoy; Hunter, G & Kharif, O (2019) A $1,800 Drop in Minutes: Bitcoin Volatility on
Full Display, available at https:// bloom .bg/ 2LUOwgL
113 See the Declaration and Issuance of the Sovereign Currency Act 2018, available at http:// bit .ly/ 2Y6aqUO

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