The potential use of digital assets as collateral when taking security raises several issues in the creation, perfection, and enforcement of security interests as well as in the applicable law. With the collapse of several banks trading digital assets, the issue becomes more acute. Numerous studies and reform activities are taking place simultaneously. Among these are the ELI Principles, the Unidroit Draft Principles of Digital Assets, the Law Commission Consultation Paper on Digital Assets, and the ALI/ULC Amendments to the UCC. At the same time, modern principles of the UNCITRAL Model Law on Secured Transactions (“MLST”) can play a pivotal role in reducing the cost of credit and expanding the financial inclusion of small businesses and individuals.
This paper considers the potential use of digital assets as security. It will comparatively interact with the MLST, the ELI Principles on the use of Digital Assets as Security, the UNIDROIT draft Principles of Digital Assets, the Law Commission’s Paper and the UCC amendments. It will argue that regulation is necessary to give confidence to markets and market participants. Furthermore, financial technology and the modern secured transactions principles have the necessary characteristics to streamline the creation, perfection and enforcement of security interests and to enable taking security over digital assets. Finally, international organisations and international financial institutions need to work on the available principles and set of rules in order to ensure their implementation rather than drafting and creating new principles.
PRESENTER
Professor Orkun Akseli
The University of Manchester
School of Law, UK
Professor Orkun Akseli is Professor of Commercial Law at the University of Manchester Law School and the Director of Manchester LawTech Initiative. He was a Fulbright Scholar at Elon University Law School, USA in 2022 where he taught secured transactions and international business transactions. He has published extensively on the modernisation and harmonisation of secured transactions law. His research has focused on the laws relating to secured credit, and the social and economic impact of these laws with reference to the financing of SMEs. His publications include “Secured Transactions in Global Law-making” (under contract with Hart, co-authored with S.V. Bazinas); "The Future of Commercial Law: Ways forward for Change and Reform" (Hart 2020, with J. Linarelli); "International and Comparative Secured Transactions Law" (Hart 2017, with S.V. Bazinas); "Secured Transactions Law Reform: Principles, Policies and Practice" (Hart 2016, with L. Gullifer); "Availability of Credit and Secured Transactions in a Time of Crisis" (CUP 2013); "International Secured Transactions Law: Facilitation of Credit and International Conventions and Instruments" (Routledge 2011). He studied law in Turkey, USA and the UK. He is an Associate Member of the International Academy of Comparative Law and the past President of the International Academy of Commercial and Consumer Law. He is a member of Turkish Bar.
MODERATOR
Associate Professor Alvin See
SMU Yong Pung How School of Law
