International Law Firm and Digital Assets Start-up Team Up to Offer Blockchain-based Bond Issuance

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Winston & Strawn LLP, an international law firm, has teamed up with BlockEx, a blockchain based digital assets platform to offer bond issuance for small and medium size enterprises.

The start-up says they are able to work with all of the current blockchain frameworks, including Ethereum and Hyperledger, as their platform is blockchain agnostic.

According to a press release, Winston & Strawn LLP “will create standardised legal documentation templates which will form the basis of the smart contracts establishing bond issuances through the platform.”

They aim to automate much of the issuance process, reducing costs and increasing efficiency with James Godfrey, Managing Director at BlockEx, stating that a typical bond issuance costs anywhere from $200,000 to $400,000, pricing out many companies.

The start-up claims they “will shave costs dramatically to less than half and potentially even a quarter of what it is currently,” but exact details have not been provided with the platform awaiting launch.

The partnership, however, is interesting from the legal and regulatory angle with Angus Duncan, a finance partner at Winston & Strawn, stating:

“We have been closely watching developments in blockchain technology and have been looking at opportunities to create efficiencies for existing structures by incorporating blockchain technology.”

There has been some talk recently regarding Regulatory Technology (RegTech), a potentially new field which can use smart contracts to automate many law level legal processes such as often use templates or the applicable low to common legal problems.

The field is very new, but is expected to considerably grow as the potential costs savings and increased efficiencies can be considerable due to lower costs and digitization of the process.

Smart contracts, in particular, may now allow the digitization of static legal documents, turning them into dynamic code which obeys simple if:then rules depending on the circumstances, potentially handling some low level basic administrative tasks.

Eventually, complex algorithms, data analytics, artificial intelligence and other computer fields, combined with smart contracts, could handle more complex legal problems and even perhaps give judgment on some simple legal disputes, but that’s some long way off for now as only the first steps are being taken with most of it at the proof of concept stage.

 

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