Bitcoin, Blockchain and the Fintech Revolution

Wednesday 12 October 2016

@mhclawyers

Welcome

Philip Nolan Partner and Head of Technology Mason Hayes & Curran

Blockchain for Fintech and beyond: A Brave New World

Mark Adair Senior Associate, Technology Mason Hayes & Curran

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Blockchain’s distributed

consensus model is

the most important

invention since the internet

Marc Andreessen

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Beyond Bitcoin Adapting Blockchain

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Registers

property / real estate

diamonds

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Government services

identity management

e-voting

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Smart contracts

tracking changes

self executing

Radical departure

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Legal challenges

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BLOCKCHAIN

the next big technology

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Mark Adair Senior Associate Mason Hayes & Curran t: +353 1 614 2345 e: madair@mhc.ie

@markadairlaywer

Fintech: The Regulatory Landscape

Rowena Fitzgerald Partner, Financial Services Mason Hayes & Curran

Key Areas of Regulation

• Payment Services Directive

• Electronic Money Directive

• Markets In Financial Instruments Directive (Investment

Services)

• Crowdfunding

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Role of Central Bank

• Competent authority for regulated financial

services providers

• Gatekeeper and Consumer Protection

• Challenge-to regulate or not to regulate

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Payment Services Directive (PSD I)

• Movement and processing of payments

• 7 types of payment services

• Placing and withdrawing money on a payment account, execution

payment transactions, direct debits, money remittance

• Exemptions

Limited Network- Store Gift Cards

Agency

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PSD II

• PSD 2- by 13 January 2018

• Further types of “payment services”

Payment initiation services

Account information

• Bill payment services- money remittance

• Exemptions Narrowed

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E-Money Directive- EMD II

Electronic Money

• Digital form of cash

• Value stored on a technical device such as a chip card a computer

memory

Exemptions

• Limited Network (i.e. shop gift card)

• Telecoms

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MiFID

• Regulation of investment firms

• Investment services linked to financial instruments (shares, bonds, debt

securities, derivatives, funds)

The reception and transmission of orders

Execution of orders

Portfolio management

Investment advice

• Online trading platforms

• MiFID II – January 2018- (algorithmic trading- Blockchain)

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Crowdfunding 1

• Raising of money – Online platform

Business projects

Personal loans

• Market-based finance SMEs

• Investment portfolio

• Models

Rewards and Donations- Kickstarter

Lending

Equity

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Crowdfunding 2

• Lending

Who are you lending to?

B2B lending -not regulated

Lending to natural persons - regulated

• Credit Intermediary

Assisting consumers

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Crowdfunding 3

• Equity

• Investment in return for share in profit

Investment services- MiFID

Public offers- Prospectus Directive

• Lending and Equity Model

Payment Services

Money Remittance

Central Bank Act, 1997 (as amended) – Money Transmission

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Bitcoin

• Concerns - money laundering and financing of terrorism

• Anonymity

• Bitcoin not e-money- virtual currency currently outside scope

of regulation

• 4th Anti-Money Laundering Directive- 2017

crypto currency exchange platforms

wallet providers

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Key Points

• Not always regulated

• “Regtech”- offering solutions to already regulated entities

fraud detection

regulatory reporting

• Consider business model and services

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Rowena Fitzgerald

Partner Mason Hayes & Curran t: +353 1 614 5891 e: rfitzgerald@mhc.ie

Mark Adair Senior Associate Mason Hayes & Curran t: +353 1 614 2345 e: madair@mhc.ie