Join us as we delve deeper into the evolution of the fintech market and climate in the Philippines with our Associate General Counsel and Head of IP & Content at the GC Summit Philippines 2023.
Digital transformation has created a new wave of developers and entrepreneurs moving into financial technology (fintech) with innovative products, services, and business models. The emergence of non-fungible tokens (NFTs) is one such example, and as these tokens become more mainstream, certain legal considerations must be taken into account.
The Legal 500 GC Summit Philippines 2023 brought together top legal professionals and in-house counsel for the first time in three years to discuss emerging legal trends, regulatory developments, and best practices for legal professionals.
The day-long series of sessions explored complex legal technology topics such as sustainable financing, capital markets, data protection, cybersecurity, and crisis management, with Marian Vanslembrouck, Enjin’s Associate General Counsel and Head of IP & Content, as one of the panelists.
Marian joined the panel on the evolution of the fintech market and climate in the Philippines, alongside Fernand Joseph D. Miranda and Jerome D. Canlas, both Partners at the Cruz Marcelo & Tenefrancia Law Firm, Carlos Garcia, Head of Legal for digital trading platform Philippine Digital Asset Exchange, and Bridget Rose M. Mesina-Romero, Officer-in-Charge, Payments Policy, and Development Department at the country’s central bank, the Bangko Sentral ng Pilipinas.
Marian’s session on the opportunities, risks, and effective management strategies for businesses considering adopting NFTs within the Philippine legal framework was well-received by attendees.
The Philippines is emerging as a leading hub for NFTs, where games such as Axie Infinity have gained mainstream popularity. With this growth comes the need for legal clarity and a better understanding of emerging technologies to ensure a safe and innovation-driven environment.
"Regarding the surge of interest in NFTs over the past few years and why organizations should pay attention to developments in the NFT space, NFTs present a novel approach to representing true ownership and authenticity of digital assets, enabling individuals to truly own and verify their digital possessions in previously impossible ways,” Marian said.
In this context, Marian shared some essential legal considerations that businesses should keep in mind when adopting NFTs for marketing and business operations.
“We're witnessing a new era of technology that gives people freedom we haven't seen since the beginning of the internet. For businesses, this technology opens up new avenues for engaging with customers and audiences,” Marian said.
She explained that the transparency and immutability of blockchain technology, which serves as the foundation for NFTs, enables users to validate the transfer history of these digital assets using online blockchain explorers. This enhances the authenticity and value of the NFTs.
“In the Philippines, no specific law governs NFTs, and it is only regulated, as in other jurisdictions, if the NFT is considered a payment instrument or security. General Counsels (GCs) should exercise caution when creating fractionalized NFTs and allowing holders of such shares to profit, as this could be considered a security,” Marian said.
Additionally, she emphasized the importance of limiting the license scope to specifically agreed-upon authorized uses, limiting how the NFT is distributed, and imposing limitations on modifications or combinations of the NFT without prior approval.
These and other considerations discussed during the event will help shape the legal landscape for fintech, NFTs, and other emerging technologies in the Philippines.
NFTs present a revolutionary way to own digital items and provide secure authentication. As the Philippine legal landscape changes in relation to NFTs, Marian’s advice and the panel’s insights provide legal professionals with valuable guidance on how to navigate this new technology.
A few things are clear: businesses should be aware of the legal considerations and risks associated with NFTs, as well as the opportunities to gain competitive advantage from them. With the right legal framework and guidance, NFTs can be used to innovate products and services, increase trust between businesses and customers, and drive wider innovation.
Associate General Counsel and Head of IP & Content