The Legal 500 Blockchain UK chapter for 2021—contributed by Slaughter and May—has been published.
For the first time, this year's chapter includes consideration of the extent to which blockchain has intersected with ESG (Environment, Social and Governance) outcomes. This is a hot topic, as blockchain technology has attracted a reputation of being antithetical to ESG goals through its links to cryptocurrencies like Bitcoin which have carbon-intensive mining processes. Cryptocurrencies have also long been associated with an increased risk of money laundering and fraud.
Against this backdrop, we reflect on the increasing focus on powering blockchain through the use of renewable sources and carbon-offset, and take a look at the social and governance spheres where the benefits of the technology are (to date) most in evidence.
Other recent developments covered in the chapter include the soaring use of non-fungible tokens or 'NFTs', nascent trends around decentralised finance and the potential introduction of a UK central bank digital currency or 'CBDC'.
Coming full circle, we observe how the Bank of England has signalled that if the UK adopts a CBDC, this could play a role in the transition to a net zero economy. In a speech delivered in June 2021, a representative of the Bank identified that a UK CBDC network might process payments more efficiently and at lower energy intensity, and further noted that a CBDC may offer enhanced data and analytics which could enable the Bank to configure its payment system to maximise its energy efficiency.
Members of Slaughter and May's fintech team in Hong Kong contributed the Hong Kong chapter of the guide.
the Bank of England has signalled that if the UK adopts a CBDC, this could play a role in the transition to a net zero economy