Optimizing Legal Protection of Parties in Smart Contracts Within the Indonesian Legal System

Abstract

Purpose: The development of digital finance is leading to the increasing use of Smart Contracts because of their simple and self-executing characteristics. However, there exists the potential for legal loopholes, including protection of the included parties aside from the simplicity and convenience. Methods: A normative method using primary, secondary, and non-legal materials was adopted. Meanwhile, legal materials were collected through literature review and analytical methods based on deductive syllogism. Results and Conclusion: The results showed that the synchronization of regulations supported the development, certainty, and stability of the Indonesian economy. The application of contracts law, technological neutrality, and privacy principles in Indonesian regulations related to the proliferation of technology-based contracts was adequate. Research implications: Therefore, this research analyzed the extent to which the Indonesian legal system afforded adequate protection to parties and identified the improvements necessary for the future development of Smart Contracts. Originality/value: It analyzes the importance of existing regulations with the social demands of the community to ensure the prompt establishment of economic certainty and stability.