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Cryptoassets have recently attracted the attention of national and international financial regulators. Since the mid-2010s blockchains have increasingly been adapted to automate and replace many aspects of financial intermediation, and by 2015 Ethereum had created the smart contract language that underpins the digitization of real assets as asset-backed tokens (ABTs). Those were initially issued by FinTech companies, but more recently banks active on international capital and financial markets, and even central banks, for example, the Bank of Thailand, have developed their own digital platforms and blockchains. A wide variety of real and financial assets underpins ABTs, viz., real-estate, art, corporate and sovereign bonds, and equity. Consequently, owing to the significant market capitalization of cryptocurrencies, the Basel Committee on Banking Supervision (BCBS) published two consultative papers delineating its approach on cryptoasset regulation. In this study, the authors analyze the mechanics of ABTs and their potential risks, relying on case studies of recent issuance of tokens in equity, real-estate, and debt markets, to highlight their main characteristics. The authors also investigate the consequences of the increasingly oligopolistic structure of blockchain mining pools and Bitcoin exchanges for the integrity and security of unregulated distributed ledgers. Finally, the authors analyze the BCBS’ regulatory proposals, and discuss the reaction of international financial institutions and cryptocurrency interest groups. The main findings are, firstly, that most ABTs are akin to asset-backed securities. Secondly, nearly all ABTs are “off-chain/on-chain,” that is, the underlying is a traditional asset that exists off-chain and is subsequently digitized. The main exception is the World Bank’s bond-i that is genuinely native to the blockchain created by the Commonwealth Bank of Australia, and has no existence outside it. Thirdly, all ABTs are issued on permissioned blockchains, where anti-money laundering/anti-terrorist funding and know-your-customer regulations are enforced. From a prudential regulatory perspective, ABTs do not appear to pose serious systemic risks to international financial markets. This may account for the often negative reactions of banks, banking associations, and cryptocurrency interest groups to the BCBS’ 2021 proposals for risk-weighted capital provisions for cryptoassets, which are viewed as excessive. Finally, we found that issuance of ABTS and other smart contracts on permissionless blockchains such as Bitcoin and Ethereum could potentially generate financial instability. A precedent involving Ethereum and The DAO in 2016 shows that (i) there is a significant accountability gap in permissionless blockchains, and (ii) the core developers of blockchains and smart contract technology, and Bitcoin mining pools, exercise an unexpectedly high- and completely unregulated-amount of power in what is supposedly a decentralized network.

The purpose of this paper is to analyse stakeholders’ perceptions on the accounting of crypto-assets. They also look at the need to amend/clarify existing accounting standards or develop new accounting standards.

The authors use a qualitative approach featuring interviews with four stakeholder groups including academics, professional bodies, standard setters and accounting practitioners. Interview recordings are transcribed and then analysed through NVivo.

The interviewees identify various issues in the application of current accounting standards to crypto-assets. The interviewees perceive that the rapid development of crypto-assets and fluidity hinder the development of accounting guidance. Hence, continuous monitoring by standard-setters is required. The general consensus is that unless there are crypto-assets with economic characteristics and functionality that are pervasive enough to warrant a new accounting standard, principles of current accounting standards are robust to address gaps in accounting requirements for crypto-assets.

This study adds to the discussion on harmonising the current practices in accounting of crypto-assets. By examining perceptions of multiple stakeholder groups, this study provides insights into the applicability of current accounting standards to the classification, measurement and disclosure of crypto-assets. The findings will inform standard setters and aid their efforts towards providing formal guidance on the accounting of crypto-assets.

Tokenization is a relatively new activity in digital finance. Tokenization, a process that creates a blockchain representation of the underlying instrument, can enhance the standard features and characteristics of assets and securities. Asset and security tokenization produces many benefits. These benefits include reducing issuance and trading costs, lessening dependency on intermediaries, facilitating more liquidity in markets, and providing greater transparency around an asset’s lifecycle for all parties involved. This chapter synthesizes the key characteristics, benefits, processes, tools, and techniques of tokenizing real-world assets. It also provides several examples of current asset-backed token applications to help understand the rapidly growing industry and analyzes future expectations of this new technology.

This chapter introduces the concept of stablecoins such as Tether, DAI, or Ampleforth. It also provides a taxonomy of the different types of stablecoins consisting of (1) traditional asset-backed stablecoins, (2) crypto-collateralized stablecoins, and (3) algorithmic stablecoins and seigniorage shares. The chapter continues with a brief history of stablecoins, starting from BitShares as the first stablecoin implementation over tether and market-wide stablecoin adoption to Facebook-initiated Diem. Next, the chapter explains the impact of stablecoins on cryptocurrencies and other markets and discusses trends and challenges facing stablecoins. The chapter provides a basic understanding of stablecoins, their defining characteristics, challenges, and markets.

This chapter examines possible regulatory updates to address the challenges of monetary sovereignty and singleness of money. These two challenges are particularly pertinent to the new means of payments enabled by the use of distributed ledger technology (DLT). These new means of payment include cryptoassets such as bitcoin and ether, stablecoins and tokenized deposits. The degree to which these new means of payment can be a threat to monetary sovereignty and singleness of money can differ widely, depending on the contexts of the jurisdictions, as well as the details of these new means of payment themselves.

The purpose of this study is to identify the possible efficiency gains in using tokenization for the execution of public expenditure on governmental investments.

Through design science research methodology, the exploratory research produced a tokenized prototype in the blockchain, through the Ernst and Young OpsChain traceability solution, allowing automated processes in the stages of public expense. A focus group composed of auditors from the public sector evaluated the possibility of improving the quality of information available in the audited entities, where the tokens created represent and register the actions of public agents in the blockchain Polygon.

The consensus of the experts in the focus group indicated that the use of tokenization could improve the quality of the information, since the possibility of recording the activities of public agents in the metadata of the tokens at each stage of the execution of the expenditure allows the audited entities the advantages of the information recorded on the blockchain, according to the following ranking: first the immutability of audited data, followed by reliability, transparency, accessibility and efficiency of data structures.

This research makes an empirical contribution to the real use of tokenization in blockchain technology to the public sector through a value chain in which tokens were created and moved between the wallets of public agents to represent, register and track the operations regarding public expense execution.

Save Ideas Ltd is an Australia-based company and Internet portal for free and instant double protection of intellectual property (ideas of innovators and anyone), one with the Time Certificate stamp and another one based on blockchain technology. Blockchain protection is being upgraded by Initial Coin Offering (ICO) with process of issuing own crypto tokens for the expansion of Save Ideas and at the same time for funding the most promising registered ideas. Process of ICO as the way of financing will be presented in the case of Save Ideas in this chapter.