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Inbuilt trust

Inbuilt trust

Inbuilt trust

Pioneering blockchain legislation has created an entirely niche new industry
for Malta and an exciting practice area for our firm, says CorrieriCilia founding
partner Silvio Cilia.

For many, blockchain and cryptocurrencies are interchangeable, while others think that this technology is the sole remit of the financial services sector.

Yet blockchain will affect various other sectors.

“Although mostly associated with Bitcoin and other cryptocurrencies by the general public, blockchain (or digital ledger) technology is more than just a means of exchanging or storing a value,” says one of CorrieriCilia’s founding partners Silvio Cilia.

“From a business perspective, the main promise of this technology is the inbuilt trust mechanism it offers, eliminating the requirement of institutions and middlemen to facilitate business transactions between persons who do not necessarily know or trust each other.

“It is easy to imagine blockchain reducing the importance of traditional banks and financial institutions as guardians of such trust, paving the way for a more decentralised and trust-neutral financial paradigm. However, keeping in mind concurrent evolution of artificial intelligence (AI), machine learning and the Internet of Things, it is hard to imagine any industry that will not be affected by blockchain technology in one way or another within the next five to ten years.

“High on the list of industries and sectors ripe for ‘disruption’ would be other heavily centralised and trust sensitive industries such as health care, music distribution, publishing, supply-chain and transport, social media and even government.

“The blockchain also ‘rehashes’ the good old-fashioned utility token into a new industry in itself. We have witnessing the rise of the ICO as a funding mechanism and increasingly the tokenisation of traditional assets such as real-estate enabling their adoption and exchange in a multitude of new ways.”

The increasing adoption of smart contracts may result in fewer disputes and of a different nature

Specifically for the legal profession, in what ways will blockchain cause disruption?

“As blockchain technology adoption by our clients increases, the approach and working practices of the legal profession would need to change accordingly,” adds Dr Cilia.

“For instance, blockchain may significantly change the way title to property and intellectual property rights are recognised and secured in the medium- to long-term. As a result, the legal profession’s role in such transactions may change significantly.

“The increasing adoption of smart contracts may result in fewer disputes and of a different nature. In the shorter-term we may increasingly interact with securities in the form of tokens existing on a blockchain and perhaps deal with new legal entities deriving their existence solely from the blockchain. This will not be without its challenges and traditional legal concepts such as privacy and the right to be forgotten will need to be reconciled with this emerging technology.”

How is CorrieriCilia, as a legal firm, catering for this disruption, through its service offering?

“At CorrieriCilia, we are geared up to provide legal, regulatory and tax advisory services to clients in connection with all forms of digital ledger technology and Virtual Financial Assets as well as VFA Agent services,” says Dr Cilia.

“Blockchain also requires specific knowledge and expertise built over time. We selected a group of extremely talented and highly-specialised individuals – lawyers, accountants, business advisors – and created a dedicated blockchain team that is constantly up-to-date with the latest technological developments, the already existing legal implications and the response of authorities and regulators to those developments.”

In terms of regulation, how will CorrieriCilia be affected? 

“Pioneering legislation has come into force on November 1, purporting to transform Malta into a regulated base for the industry to flourish and gain credibility. This new regulatory environment raises the bar significantly for the industry and is essential for gaining the trust of the public and enabling it to become more mainstream. This has created an entirely niche new industry for Malta and an exciting practice area for our firm.”

CorrieriCilia will be present at the Malta Blockchain Summit.

“We are proud to be an official exhibitor at the Malta Blockchain Summit,” says Dr Cilia. “Interested parties may contact our Blockchain Team at stand 36 or set appointments with us at or around the Summit by getting in touch through all major social media, including Telegram at @CorrieriCilia. We are looking forward to connecting with some of the best and brightest in the field, and simultaneously spreading our knowledge, expertise and services.”

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