Mongolia:
Regulation On Blockchain In Mongolia
To print this article, all you need is to be registered or login on Mondaq.com.
Blockchain technology was invented for bitcoin as its
fundamental technology. It is a particular type or subset of
so-called distributed ledger technology (“DLT”). The DLT
is a way of recording and sharing data across multiple data stores
(also known as ledgers), which each have the exact same data
records and collectively maintained and controlled by a distributed
network of computer servers, which are called nodes. Blockchain is
a mechanism that employs an encryption method known as cryptography
and uses (a set of) specific mathematical algorithms to create and
verify a continuously growing data structure – to which data
can only be added and from which existing data cannot be removed
– that takes the form of a chain of “transaction
blocks”, which functions as distributed ledger1.
The most countries support this technology as it cannot be
corrupted and is decentralized, has enhanced security, distributed
ledgers, consensus and faster settlement (read more at
https://101blockchains.com/introduction-to-blockchain-features/#prettyPhoto).
For instance, in 2016, France recognized the use of blockchain
technology as a registry in support of “minibons”
through the publication of an executive order. Also known as
interest-bearing notes, minibons are non-negotiable securities that
contain a trader’s undertaking to effect payment on a
specific maturity date in return for a loan. In 2017, a second
executive order was published, extending the list of financial
instruments that can leverage blockchain technology as a registry.
A reference to blockchain was added to the French commercial code
as compliant method for the registration of financial
instruments.2
Footnotes
1
Cryptocurrencies and Blockchain, European Parliament,
2018
2 pp12.
Legal Regulatory Framework of Blockchains and smart contracts, The
European Union Blockchain observatory and forum, 2019
Originally published by Grata, July 2020
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
POPULAR ARTICLES ON: Technology from Mongolia