- INTRODUCTION TO THE TOPIC BLOCKCHAIN
This document attempts to provide conceptual support on certain key issues when evaluating and analyzing an asset tokenization proposal.
If the passage of time has shown us something, it is that the use of disruptive technology has been unavoidably accepted and incorporated into the various facets of our daily lives. Computers, cell phones and the internet have penetrated our lives in an unavoidable way.
Not only on a personal level, logically companies have naturally taken technology to expand and accelerate the pace of their businesses.
A phenomenon of the same magnitude occurs with blockchain technology, just as no one doubts that the internet has caused a revolution in the access and transmission of information, the blockchain implies a revolution in the transmission of value in the same medium that is the internet.
Globally we can affirm that BLOCKCHAIN = INTERNET OF VALUE.
Blockchain, in Spanish CHAIN OF DATA BLOCKS is a database distributed among different participants cryptographically protected and related in a mathematical way that, given its constitution, cannot be altered.
We must take into account the origins of this type of technology, going back to 2008 and with the crisis of confidence in the markets, this tool arises in which beyond the parties not trusting whether they can fully have a consensus on the existence, characteristics and evolution of certain facts and factors.
That all agents can fully trust the information that is recorded in a blockchain is such a powerful concept that it has changed the way of recording transactions and their security levels around the world, generating a revolution in the field of finance and international trade.
In this system of technological trust, the databases of the transactions generated are supported by the use of cryptography (encryption code), ensuring an infallible coding mechanism that prevents theft, theft or manipulation of information.
A TOKEN will then be a series of digits that represents a record within that chain of information blocks. The concept of TOKEN is of total importance as that minimal unit that represents a record that in turn is part of a ledger protected with total security.
Let’s think about the concept of blockchain taken to the banking industry, all financial entities even from the same groups have the problem of the lack of interoperability according to the different regulations of the countries.
Have we ever heard or seen a SWIFT code, which is neither more nor less than an operation code provided to us by a payment provider.
Today there are more than ten thousand financial entities around the world that use this payment cooperative.
It is basically a data messaging standard between banks, where origin, amounts, destination, payment routes are indicated, once processed it is safe and unalterable, guaranteeing both the issuer and the recipient of the payment. The point is that this type of operation takes between two and four days to become effective, generating the need for lines of credit by companies that operate globally and higher associated costs than if they were instantaneous.
The previous paragraph explains the reason why the most used public blockchains in the world are BITCOIN AND ETHEREUM, where any agent can be a real user, validate and be another node in it.
With these “tokens” any user could directly exchange to another user WITHOUT TERRITORIAL BORDER and in a time between fifteen seconds to one minute with a significantly reduced cost.
When we refer to EXCHANGE we speak of assets that at the same time represent money.
This is how tokens or cryptocurrencies are used to TRANSMIT VALUE.
Just as the internet allowed us to vertiginously transmit information in times and with a scope that we had not previously imagined (by opening an email account we send data, information, photos, and various content to another person who has another mailbox, it does not imply that it is sent directly to the other person, but instead goes to a server that makes a copy and sends it to another box), blockchain technology revolutionized the transmission of value but in a ONE-TO-ONE way, WITHOUT INTERMEDIARIES.
Logically, and what has been happening in the world in recent years, companies want to use this technology and generate TOKENS “that exchange tool that supports value”.
Those TOKENS are launched through projects that give them that certain value, they represent the value of that project itself, or the value of certain assets, existence, ideas, certainly and redundantly of everything that has a value.
Once the tokens have been created thanks to their interchangeable characteristics, they begin to be commercialized in a market that by its nature has no borders, there are markets in the world, exchanges where they are listed and logically exchanged.
When agents acquire these tokens, it generates the need to have the support of that value that they precisely represent, and from there the other fundamental concept that we must understand, that of STABLE COIN, is born, it is precisely a backed token, which the issuer decides establish as a backup what gives it stability, such as money, guarantees, other assets, other cryptocurrencies, etc.
This is precisely what allows to move in the crypto world but with support making certain tokens or cryptocurrency more attractive.
Understanding that any real asset is digitizable and generates a unit of exchangeable value, is to open the way to a new way of accessing liquidity and the existence of a market.
Few people in the world can buy a Picasso painting, but they can buy a token that represents a fraction of its value, exchange it in the market with liquidity, or store it as a store of value.
The challenge for companies, governments and all the intervening agents is precisely to identify value and be able to use it or generate it to transmit it through the use of this new technology, thus generating new resources and financial tools.
Not knowing or not taking these tools would be similar to not knowing the use of mail or cell phone messaging attached to postal mail.
- II) The token: legal nature
After the introduction to the subject at hand, it is necessary to determine the correct legal framework of a TOKEN, that is, assign it a legal nature.
In this sense, we begin by stating that its characteristics are:
- It is a digital document with an electronic signature, in accordance with Arts. 5 and 6 of the Digital Signature Law No. 25,506.
- It is transmissible and appropriable in a way that is considered a movable thing.
- It is not a physically appropriable thing, since it is not corporeal: therefore it is a recordable incorporeal thing.
- Some are substitutable and others are not Bitcoin or Ether and, in general, ERC-20s are fungible, but there may be non-fungible tokens, such as ERC-721.
- It is a present thing, subject to private property, it is within the commerce of men and it can be divisible or indivisible.
- The token can be used as a financial instrument. Depending on its configuration, it could be subject to the regulations of the stock market.
- Based on this, we can distinguish two types of token for the purposes of their inclusion or not in the category of negotiable value:
- Utility token and / or payment token: carries your underlying right to a specific use, of a good or a service. It is not a financial instrument. It is governed by civil and commercial law.
- Security token: constitutes a security whose underlying right grants economic rights over a project or product, or allows to participate in the increase in value of the person issuing the token or of a specific business. It is transferable, there is an expectation of obtaining a profit and in some cases it may be considered a financial instrument, so its issuance, transmission, and custody regime could be subject to the regulations that authorize its issuance.
- TOKEN LEGAL REGIME:
Defining the characteristics of the TOKEN and its legal nature, now is the time to frame it legally.
It so We can affirm that the TOKENs are included within the legal category of securities, granted by art., 1815 of the CC and CN because they incorporate an unconditional, irrevocable obligation of a benefit and grant each holder an autonomous right.
By their nature, we could classify them within the NON-certified securities, which appear in electronic documents and / or computer records.
After affirming that the Token constitutes a non-material and non-material security, its creation is governed by the principle of Freedom enshrined in art. 1820 of the CC and CN that enables any human or legal person, private or public, to create and issue securities in the types and conditions that it chooses. This faculty includes the denomination of the type or class of title, its form of circulation in accordance with general laws, its guarantees, redemptions, terms, its quality of convertible or not in another type of title, rights of third-party holders and other regulations that make the configuration of the rights of the interested parties, which must be expressed clearly and not be confused with the type, denomination and conditions of the securities, especially provided for in the current legislation.
The only limitation provided by law is that in the case of securities intended for public offerings, the provisions of the specific legislation must be complied with.
Consequently, the Provinces are authorized to issue securities intended for public offering and tokens are framed within this legal category.