The PAYTECH Book

Blockchain, Cryptocurrencies and How They Fit Within Current Payments Regulation

By James Burnie

Senior Associate, Eversheds-Sutherland (International) LLP

Andrew Henderson

Partner - Financial Services, Eversheds-Sutherland (International) LLP

and Andrew Burnie

PhD Student, Alan Turing Institute and University College London

What is a Payment Service?

At its core, payment services constitutes enabling the movement of value, traditionally in the form of fiat currency, from a client to a third party. This “movement” does not constitute a physical movement of money, rather what is happening is that one ledger, that is held between the client and the payment service provider, is altered to reflect the fact that the client has a right to less money, and the ledger of the third party is altered to reflect the fact that it has a right to more money.

Figure 1: The movement of value

The role of a payment services provider, therefore, is to enable the alteration of different ledgers to reflect changes in amounts owed.¹ As the number of users of the payment service increases, so does the number of ledgers. Given the nature of this system, there is a natural role for blockchain, which is “essentially records, or ledgers, of electronic transactions, very similar to accounting ledgers”.²

The Three Key Blockchain Payment Models Explained

The potential role of blockchain in facilitating ...