EU regulations assume all tokens are transferable, leaving non-transferable digital assets in regulatory limbo. Blockchain Sandbox reveals the solution.
Opinion by: Elisenda Fabrega, general counsel at Brickken
Europe’s rulebook was written for assets that move. Yet a large class of assets, including non-listed company quotas and bespoke revenue-sharing contracts, is non-transferable by design. Because Markets in Crypto-Assets’ (MiCA) definitions presuppose transferability, and MiFID II targets transferable securities and continues to apply to the digital representations of such securities, these “digital but nontransferable” instrument representations fall into a regulatory blind spot.
The EU Blockchain Sandbox offers a way out: recognizing that a faithful “digital twin” can preserve the legal nature of the original non-transferable asset rather than being automatically qualified as a new, transferable security token.
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Author: Elisenda Fabrega
