This blog provides an overview of blockchain-based technologies, including cryptocurrencies, stablecoins, and asset tokenization. It explains what these terms mean and why they matter in the context of the legal sector. This blog will also introduce the growing regulatory landscape surrounding these developments.

What Do These Terms Mean?

• Blockchain: Blockchain is a decentralised digital ledger that securely stores records across a network of computers in a way that is transparent, immutable, and resistant to tampering. Each “block” contains data, and blocks are linked in a chronological “chain.”
• Cryptocurrency: A cryptocurrency is a digital or virtual currency secured by cryptography, which makes it nearly impossible to counterfeit or double-spend. Most cryptocurrencies exist on decentralised networks using blockchain technology. The most well-known examples of cryptocurrencies are Bitcoin and Ethereum.
• Stablecoins: Stablecoins are cryptocurrencies whose value is tied to that of another currency, commodity, or financial instrument. Stablecoins aim to provide an alternative to the high volatility of the most popular cryptocurrencies, including Bitcoin, which has made crypto investments less suitable for everyday transactions. Examples of stablecoins is USD-pegged Tether (USDT) and USDC, which is a regulated digital currency established in 2018 and issued by Circle.
• Asset Tokenization: Asset tokenization involves recording ownership of traditional assets on a blockchain. This process can make transactions more efficient, broaden access to investment opportunities, and enhance liquidity for typically illiquid asset classes like real estate and art.

Why Does This Matter?

Blockchain technology offers a transformative set of benefits for the legal industry, particularly in terms of accessibility, transparency, cost savings, automation, and data integrity. By leveraging blockchain, lawyers can streamline transactional work, digitally sign and immutably store legal agreements, and use smart contracts to automate the creation and execution of legal documents. This reduces the time and resources spent on routine tasks and lowers the overall cost of legal services. These savings can then be passed on to clients. In terms of accessibility, blockchain simplifies legal processes and cuts through complexity, making the legal system more approachable and affordable for individuals and small businesses. Transparency is enhanced through distributed ledger technology, which ensures that all parties share access to a single, immutable record of transactions. This reduces ambiguity, lowers the risk of disputes, and builds compliance directly into digital agreements. By automating tasks like document drafting and escrow management, blockchain significantly cuts operational costs and human error, helping to create more efficient, inclusive, and affordable legal services.

This topic is especially relevant as more law firm clients engage with blockchain technology and legal work in this area continues to grow. This growing importance is evident in the rising volume and complexity of legal matters related to blockchain and digital assets handled by firms. For example, Linklaters advised Ant Digital Technologies as technology service provider on the issuance of tokenised repackaging notes on public blockchain which are backed by ESG real world assets held by a world-leading new energy group and international manufacturer of solar materials. This pioneering transaction marked the first ESG-focused RWA (Real World Asset) tokenised repackaging notes where the proceeds were used to acquire Photovoltaics (PV) businesses. This transaction showcases the use of asset tokenization technology in the context of green and sustainable finance. Other notable transactions in the blockchain technology space include:

• Allen & Overy (now “A&O Shearman”) advised a bank syndicate comprising BNP Paribas, HSBC and RBC Capital Markets on the European Investment Bank’s (EIB) inaugural issuance of sterling-denominated digital bonds, also marking the first public issuance on HSBC Orion, HSBC’s tokenisation platform (01/02/2023).
• Baker McKenzie advised on World’s First Cross-Border Repo and Natively-Issued Digital Bond Pilot (23/11/2023).
• Latham & Watkins advised on Coinbase’s Upsized US$1.1 Billion Convertible Senior Notes Offering (14/03/2024).
• Latham & Watkins advised on Core Scientific’s (a leader in digital infrastructure for bitcoin mining and high-performance computing) Upsized US$550 Million Convertible Senior Notes Offering (03/12/2025).

The Regulatory Approach

In October 2023, the UK Treasury proposed new rules for regulating cryptoassets, including stablecoins. The proposals aimed to make certain activities, such as operating a crypto trading platform or issuing stablecoins backed by fiat currency, regulated services. Firms carrying out these activities would need authorisation from the Financial Conduct Authority (FCA). The rules also included requirements around market abuse, asset disclosures, and listings. By November 2024, the government confirmed it would go ahead with the proposals, with only minor changes, and planned to pass the legislation by the end of 2025.

On 29 April 2025, HM Treasury published draft legislation, along with a policy note, setting out the UK’s new regulatory framework for cryptoassets. This is a key step in applying existing financial rules to the crypto sector. The new legislation introduces regulated activities under the Financial Services and Markets Act (FSMA) 2000. These include issuing UK stablecoins, storing and managing cryptoassets, running crypto platforms, and arranging transactions involving qualifying cryptoassets. Any firm carrying out these activities will need authorisation from the FCA.