Lloyd's Maritime and Commercial Law Quarterly
Tokenisation of documentary intangibles
Jiabin Lai*
Traditionally, documentary intangibles are represented by paper documents. Crypto-tokens have now been used to tokenise paper documents. This raises the question whether crypto-tokens that are used as digital counterparts of paper documents have the same legal effects as paper documents. This article criticises the view that documentary intangibles must be represented by paper documents. Instead, it argues that crypto-tokens that tokenise paper documents are functionally equivalent to paper documents because they can evidence and transfer rights in the same way as their paper counterparts. Therefore, crypto-tokens that tokenise paper documents should be viewed as documentary intangibles.
I. INTRODUCTION
Documentary intangibles are documents embodying rights that can be transferred by delivery of the documents.1 They include documents of title to goods (such as bills of lading), negotiable instruments (such as bills of exchange, cheques and promissory notes)
* PhD Law Candidate, University of Bristol. The author would like to thank Asma Vranaki, Chathuni Jayathilaka, Lin Lin, Ying Hu and an anonymous referee for their helpful comments on an earlier draft of this article. All errors and omissions remain with the author. This research is funded by the China Scholarship Council.
The following abbreviations are used:
BEA 1882: Bills of Exchange Act 1882;
DLT: distributed ledger technology;
Electronic Commerce: Law Commission, Electronic Commerce:
Formal Requirements in Commercial Transactions: Advice from the Law Commission (2001);
Electronic execution of documents: Law Commission, Electronic execution of documents (Law Com No 386, 2019);
Electronic trade documents: Law Commission, Electronic trade documents: Report and Bill (Law Com No 405, 2022);
Goode & McKendrick: R Goode and E McKendrick, Goode and McKendrick on Commercial Law, 6th edn (London, 2020);
Legal Statement: United Kingdom Jurisdiction Taskforce, “Legal Statement on Cryptoassets and Smart Contracts” (2019) (https://resources.lawtechuk.io/files/4.%20Cryptoasset%20and%20Smart%20Contract%20Statement.pdf).
The Law of Personal Property: M Bridge, L Gullifer, K Low and G McMeel, The Law of Personal Property, 3rd edn (London, 2021);
MLETR: UNCITRAL Model Law on Electronic Transferable Records;
UKJT: United Kingdom Jurisdiction Taskforce;
UNCITRAL: United Nations Commission on International Trade Law.
1. Armstrong DLW GmbH v Winnington Networks Ltd [2012] EWHC 10 (Ch); [2013] Ch 156, [47]; M G Bridge, Personal Property Law, 4th edn (Oxford, 2015), 19; L Gullifer (ed), Goode and Gullifer on Legal Problems of Credit and Security, 6th edn (London, 2017), [1.48]; M Smith and N Leslie, The Law of Assignment, 3rd edn (Oxford, 2018), [2.79].
Tokenisation of documentary intangibles
93