On December 14, the International Swaps and Derivatives Association (ISDA) published a Paper exploring key issues in developing contractual standards for digital asset derivatives.

The Paper:

• Identifies the distinguishing features of different types of digital asset, highlighting the key characteristics and features of these assets and their relevance to contractual standards.

• Identifies potential disruption events that could occur with respect to digital asset derivatives and provides a framework for defining these events.

• Identifies issues relating to how digital assets and the derivatives that reference them can be valued.

• Explains how contractual standards for digital asset derivatives will interact with the existing ISDA documentation architecture.

• Highlight potential contractual issues to consider when collateralizing digital asset derivatives, whether using traditional or digital forms of collateral.

A supplement to the paper setting out a granular, technical analysis of different ISDA product definitions and their potential applicability to digital asset derivatives is also available on the ISDA website.