16 October 2016

KWM Firsts - Leaders in innovative currency


In paving a way to a new global financial democracy, Recipco established a unique global system for the use of a virtual currency, or unit of exchange called an ECO (Enterprise-backed Credit Obligations). This new unit of currency will allow members of The ECO Capacity Exchange (the Exchange) to use ECO to trade goods and services without the need to use traditional currency. The system is the first of its kind and enables participants to utilise excess capacity efficiently, and to account for transactions at divergent values.

King & Wood Mallesons (KWM) assisted Recipco on all legal and regulatory aspects of structuring and establishing the Exchange, the world’s first global trading platform allowing members to trade their excess capacity (of goods and services) using ECO as a unit of account and medium of exchange.

As the Exchange is such a unique concept, we were required to conduct significant analysis into the legal nature of an ECO, and to provide detailed advice on the various structuring options for the legal entities involved. We worked closely with the client to conceptualise and document how an ECO transaction progresses on the Exchange.

The fundamental rationale behind ECO’s creation comes from the fact that many of the world’s assets are held by organisations and geographies that are unable to trade with the same ease in today’s global markets as larger multinationals. Their lack of access to liquid assets can therefore be a barrier to market entry and this is reflected in the socio-economic development of those countries.

Therefore, in order for the concept to work, we had to create a structure whereby the value of ECOs at the point of issuance will be referenced to a basket of major currencies. Thereafter the value of the ECOs will be determined by the prices that the members are prepared to pay for goods and services from other members, thus putting ECO and the members of the Exchange at the heart of a new, global financial democracy.

The advisory work also relied heavily on the firm’s expertise as thought leaders in blockchain, which although not used in the Exchange, formed some of the fundamental principles behind the Exchange’s creation as an entity to create and lend ECO, trade goods and services for ECO, and to establish a credit reserve fund to underwrite the financial stability of the system.

The ECO now exists as a trustworthy, low-risk currency that is a credible substitute for traditional currencies, eliminating factors such as geographic limitations, foreign exchange fluctuations and speculative risk. The ECO Capacity Exchange is a simple idea that has been made possible following the engagement of a network of global supporters and advocates, including over 200 multinational corporations, agencies of the United Nations and the UK and Chinese Governments.

ECO it is the only non-monetary collaborative currency in existence and its creation has helped lead the charge in the application of collaborative currencies where both issuance and redemption of currency relies on freely collaborating citizens or firm. It also enables economic collaboration when there isn't sufficient national money in circulation to complete a transaction or reward an activity.

Lead partners:

Tim Bednall, KWM London

Andrew Wingfield, KWM London

Tim Dolan, KWM London

Lorraine Vaz, KWM London

Media Contacts

Share on LinkedIn Share on Facebook Share on Twitter
    You might also be interested in

    On 28 August 2020, Bank of Communications London Branch (“BoCoM London”), Agricultural Bank of China London Branch, China CITIC Bank London Branch

    07 September 2020

    In the coming years, Southeast Asia and particularly Singapore will present significant opportunities for UK tech start-ups

    24 August 2020

    Law firm King & Wood Mallesons has advised Flotonic Limited, a private company incorporated in the Republic of Cyprus

    21 February 2020

    KWM has risen in the rankings of the world’s best legal brands, jumping two places to 14th in the 2020 Acritas Global Elite Law Firm Brand Index.

    24 January 2020

    This site uses cookies to enhance your experience and to help us improve the site. Please see our Privacy Policy for further information. If you continue without changing your settings, we will assume that you are happy to receive these cookies. You can change your cookie settings at any time.

    For more information on which cookies we use then please refer to our Cookie Policy.