Application of blockchain technology and smart contracts in public administration: challenges and opportunities for legal regulation

Abstract

The article explores the potential of blockchain technology and smart contracts in the field of public administration. The emphasis is on the legal challenges that arise in the process of implementing relevant innovations, as well as on the opportunities they open up for increasing transparency, efficiency, and trust in state institutions. The relevance of the topic is due to global digitalization processes, the need to modernize public administration, and the growing demand from society for openness and public control over the work of state authorities. The novelty of the study lies in the study of the legal aspect of integrating decentralized technologies into the public sphere, which has not yet been sufficiently developed in the Ukrainian legal community. The international experience of regulating smart contracts is analyzed, legal gaps in Ukrainian legislation are identified, and proposals for its improvement are formulated. The results obtained may be useful for legislators, representatives of state bodies, and researchers in the field of digitalization of processes in public administration. Furthermore, the research highlights practical applications of blockchain and smart contracts in various public administration sectors, including digital identity management, tax collection, social welfare distribution, and property registration. By examining pilot projects and international case studies, the study demonstrates how these technologies can streamline administrative processes, reduce bureaucracy, and minimize the risk of corruption. The findings suggest that a gradual, regulated integration of blockchain solutions could significantly enhance operational efficiency and citizen satisfaction. Finally, the study addresses the potential risks and limitations associated with blockchain adoption in the public sector, including high implementation costs, technological challenges, and legal uncertainty. It emphasizes the importance of developing comprehensive regulatory frameworks, establishing clear standards for smart contract usage, and ensuring that public sector employees are equipped with the necessary technical skills. The paper concludes that while blockchain offers transformative opportunities, its successful adoption in public administration depends on a balanced approach that combines technological innovation with legal and institutional preparedness.