Blockchain Native Trusts: Possible or even useful?
Rory Carter, Trusts and Estates Disputes Senior Associate writes for EPrivateClient’s most recent digital assets newsletter on the possibility of Blockchain Native Trusts. Here is a summary of the key concepts that Rory explores:
- Evolution of Crypto assets: The article discusses the rapid evolution of the crypto asset landscape since the publication of the Bitcoin Whitepaper in 2008. This has led to the creation of a trillion-dollar industry and a variety of blockchains, applications, and smart contracts that reduce the need for trusted third parties.
- Concept of Blockchain Native Trusts (BNT): The potential for Blockchain Native Trusts (BNTs), which is hypothetically a trust settled by a settlor settling crypto assets and interacting with the blockchain impressing the terms of the trust on chain or a bespoke smart contract.
- Technical Feasibility and Market Demand: While it may be technically possible to create BNTs, the demand for such trusts remains uncertain. A BNT may be appropriate for a niche category of persons who have accumulated wealth in crypto assets might prefer using blockchain technologies for succession planning over traditional trust structures.
- Challenges and Risks: There are challenges and risks associated with BNTs, such as the need for bespoke coding, limited functionality, and the requirement for trustees to have a high level of technical understanding. The lack of wider adoption of BNTs suggests that the traditional trust model may still be more practical and less risky.
You can read the full article here.
Subcribe to news and viewsThat is not to say that there is no place for traditional trusts holding cryptoassets, these remain essential; but rather to consider whether a niche genre of trust is technically possible and, if so, would there be any demand for it.
https://www.paminsight.com/epc/article/blockchain-native-trusts-possible-or-even-useful?message=6702
