Article (32): Certainty of Transfers of Payment Tokens

2/2024 Effective from 21/8/2024

1.

Licensed Payment Token Issuers must exercise prudence and due diligence in their choice of Distributed Ledger Technology for their Payment Tokens, to ensure that the Distributed Ledger Technology is technologically resilient, secure and has a clear operating procedure in which Customers can identify and understand the point at which a Payment Token passes from one Wallet to another. A copy of this due diligence must be provided to the Central Bank as part of the Licensed Payment Token Issuer’s Application.

2.

Licensed Payment Token Issuers must specify, in their White Paper and Customer Agreement, the point at which the lawful power of disposal over a Payment Token transfers from a sending Tokenholder to a receiving Tokenholder in a Payment Token Transfer. This must be specific to the Distributed Ledger Technology of the Payment Token.

3.

A Person may provide evidence to a Licensed Payment Token Issuer demonstrating that, but for a ‘fork’, error or similar failure in the operation of the Distributed Ledger Technology of a Payment Token, they would be the Tokenholder of that Token, in which case the Licensed Payment Token Issuer shall give them the same rights of redemption as are given to a Tokenholder pursuant to Article (21).

4.

A Licensed Payment Token Issuer must include a warning in the White Paper and Customer Agreement for each Payment Token that they issue, that:

a)

there is always a risk that a Payment Token Transfer may fail or be reversed or unwound as a result of the operation of the Distributed Ledger Technology, and that anyone who believes they are the victim of a failed or unwound transfer must contact the Payment Token Issuer which issued that Payment Token to ensure that they are compensated in accordance with Article (32)3; and

b)

the Licensed Payment Token Issuer has no control over the time that a Payment Token Transfer may take to complete on the Distributed Ledger Technology, and that (aside from their obligation to submit a Payment Token Transfer to the Distributed Ledger Technology for execution) they are not responsible for ensuring that a Payment Token Transfer completes within a specific time-period. Nevertheless a comprehensive audit trail must be made available to the Customer.