The Italian Parliament has published new legislation to incorporate a definition of distributed ledged technology (“DLT”).
This new Italian Law has introduced the following definitions:
DLT: which is defined as IT technologies and protocols using a ledger which is shared, distributed, replicable, simultaneously accessible and structurally decentralised on cryptographic basis, so to allow the record, validation, updating and storage of both not encrypted and encrypted data which may be verified by each participant and which may not be altered and modified; and
Smart Contracts: which are defined as computer programs operating on DLTs whose execution is automatically binding for two or more parties on the basis of effects predefined thereby.
Smart Contracts can be considered to have been carried out in writing if an IT verification of the parties is carried out in accordance with the procedure set out by the Agenzia per l’Italia Digitale. This change in law follows the Italian Ministry of Economic Development drive to develop Italy’s regulatory strategy in relation to DLT and cryptocurrencies.
The decision of the Italian Parliament illustrates the global drive to adopt DLT as a new technology. Gibraltar, as an innovative jurisdiction, has been a market leader in this field with the release of the first worldwide licensing regime for DLT firms. This has proved a hugely popular licensing regime with the regulator having received over 40 applications from firms wishing to establish their businesses in Gibraltar. It is interesting to see other jurisdictions identifying other issues that arise out of the use of the blockchain technology. To this end Gibraltar is set to publish the first regulations to govern the issuance of token sales.
For more information contact our Financial Services Team