Abstract It has been claimed that technology would replace the legal profession with artificial intelligence and codification of documents replacing the twenty‐first century lawyer. With this premise in mind, this paper discusses smart legal contract formation in the context of Australian contract law, the perceived replacement of lawyers through blockchain technology and how the COVID‐19 pandemic has set the trajectory for smart legal contract convention. We consider whether the legal profession can ever truly be replaced by technological advances and whether COVID‐19 has pivoted the way the legal profession performs business transactions towards modernisation. Although prior literature has considered how the legal profession may benefit from increased technology use, the expected timeframe for occurrence was dependant on a strong reluctance by the profession to change the status quo. Analysis of the impact of COVID‐19 on the legal profession including the execution of legal documents, provides insight into areas for improvement going forward and whether a regulatory overhaul is required. This research shows that, although there are a number of advantages to the implementation of smart legal contracts using blockchain technology, there still remains numerous implementation and regulatory concerns that need resolution if smart legal contracts are to be widely used.
إن التطور التقني أفرز نظاماً جديداً للتعاقد عن بعد يعرف بالعقود الذكية، والتي تمثل أحد تطبيقات تقنية سلاسل الكتل (Block‑chain) وتعتبر هذه التقنيات جيلاً متطوراً ومستحدثاً عن العقود الإلكترونية، إلا أن هذا العقد يواجه بعض الإشكاليات المتعلقة بتكوينه، منها ما يتعلق بالتعبير عن الإرادة والأهلية القانونية للمتعاقدين. لذا جاء هذا البحث لتسليط الضوء على هذه الإشكاليات، حيث خلص إلى بعض النتائج، منها أن الإيجاب يتشكل في العقود الذكية منذ لحظة نشر الكود البرمجي على منصة سلسلة الكتل، وأن أهلية التعاقد تمثل عائق أمام العقود الذكية، وعليه، يجب العمل على تحديد الآلية القانونية المناسبة للتعرف على أهلية المتعاقدين، سواء الشخصية أو الاكتفاء بالشخصية المالية الرقمية للمتعاقدين عبر العقود الذكية، والعمل على وضع تشريع موحد لتنظيم العقود الذكية. Technological advancements have given rise to a new remote contracting system known as Smart Contracts. These contracts, which are an application of block‑chain technology, represent a sophisticated and innovative generation beyond electronic contracts. However, the formation of these contracts faces challenges, particularly regarding the expression of will and the legal capacity of the contracting parties. This study sheds light on these challenges and draws certain conclusions. One of those conclusions that the Offer in Smart Contracts is established from the moment the program code is deployed on the block‑chain platform. Additionally, contractual capacity poses an obstacle to Smart Contracts. Therefore, it is essential to work towards defining appropriate legal mechanisms to determine the capacity of the contracting parties, whether in terms of personal capacity or reliance on the digital financial capacity of the parties through Smart Contracts. Furthermore, there is a need to develop unified legislation to regulate Smart Contracts.
The purpose of the study is to study smart contracts, which are one of its main components, which support the main connection between the parties forming social relations, using the innovative technology —blockchain technology. It is focused on the analysis of the formation ofsmart contracts and the peculiarities of legal regulation in domestic and international relations. To form smart contracts, its general concept and specific features, the potential of blockchain technology in forming smart contracts are studied. Priorities and weaknesses of the technological system in the formation of smart contracts are revealed. Foreign experiences have been studied, and the basis of the legislation of Kazakhstan, including civil law legislation, has been studied for the implementation of smart contract formation technology mechanisms. The advantages and disadvantages of smart contracts, which play an important role in the implementation of blockchain technology, are discussed, and the situations that allow them to be prevented are explained. As a result of the research, the legal basis for the introduction of this information and communication technology into the Kazakh legislation was determined. Conclusions about smart contracts, which rapidly develop blockchain technology, are important as scientific research opens the way for legal research in this direction, considering contractual relations in social relations as a tool for improving them. The practical significance of the research will be to increase the efficiency of the measures taken in the formation of smart contracts, to contribute to the development of electronic contractual relations that allow the formation of public relations at a high-quality legal level, and as a result, to create the basis for social and economic development. Research results can be used in the formation of smart contracts, public and quasi-public procurement, public service provision, and many other areas.
Open access
Digital Transformation in Law
Legal, Health, Environmental and COVID-19 Challenges
Bitcoin and cryptocurrency adoption has increased significantly over the past few years. The significant growth in the industry has been matched by growth of crimes in this domain; not only in scams and dark-web illegal trading, but also in white-collar crimes with fraud and perjury occurring increasingly. With blockchain technology, the world of financial infidelity has become increasingly sophisticated. There is a common belief that blockchain and cryptocurrency provide means of hiding funds from the public or close associates who may not be familiar with the technology. The rise of cryptocurrency has also led to spouses hiding digital assets during divorce settlements. This study presents a use case of a couple in the midst of a divorce where one of the spouses was accused of perjury for failure to declare bitcoin holdings, obtained via Bitcoin mining, and possibly other forms of cryptocurrency and digital assets to the court. The plaintiff is entitled to fifty percent of all assets. While property, stocks, bonds, and bank accounts can easily be traced, cryptocurrency assets are more complex to trace but it is not impossible. This paper illustrates how such a case can be investigated by following the flow of funds on the blockchain, using tools such as Maltego and QLUE. The paper thus presents an investigative process that can be followed for a new category of forensic investigation.
The article “Legal Regulation of Cryptocurrency and Cryptocurrency Operations in the European Union” offers a comprehensive examination of the evolving legal landscape surrounding cryptocurrencies within the European Union (EU). It begins by defining cryptocurrencies, highlighting their unique characteristics such as decentralization, volatility, and potential for misuse. These features pose significant regulatory challenges, as traditional legal frameworks may not be fully equipped to address them. The article delves into the EU’s response to these challenges. It outlines the various legislative measures that have been implemented to regulate cryptocurrencies and related operations. These measures aim to strike a balance between fostering innovation in the digital economy and ensuring consumer protection and financial stability. The article discusses the implications of these regulations, noting that while they have brought some clarity and security to the sector, they also risk stifling innovation if not carefully calibrated. The article explores the ongoing debates within the EU regarding the appropriate regulatory approach to cryptocurrencies. It underscores the need for a nuanced understanding of the technology and its potential impacts. The article argues that regulation should not merely react to the challenges posed by cryptocurrencies but should also anticipate future developments to remain effective and relevant. The article concludes by emphasizing the importance of dialogue and collaboration among regulators, industry stakeholders, and the public in shaping the regulatory approach to cryptocurrencies. It suggests that such engagement can help ensure that regulations are not only responsive to current issues but also adaptable to future changes. The article provides a thorough and insightful analysis of the legal regulation of cryptocurrency and cryptocurrency operations in the European Union. It underscores the complexity of the issue and the need for a dynamic and forward-looking regulatory approach. The article serves as a valuable resource for anyone interested in understanding the intricacies of cryptocurrency regulation in the EU.
Abstract: Blockchain is one of the most trending technologies which plays a major role in online transactions using cryptocurrencies. The blockchain is a chain of blocks that consists of allthe transactions up to the size of 1MB. This blockchain has many properties such as decentralization, immutability, transparency, and audibility, making transactions more secure and tamper-proof. It is tamper-proof because there is no possibility to tampera block as every block in the blockchain has the hash of the previous block. And among cryptocurrencies, bitcoin is one ofthe most popular... In fact, blockchain was introduced to theworld because of bitcoins. Apart from cryptocurrency, blockchain technology can be used in financial, NYC, and social services, risk management, food, healthcare facilities, and so on. Numerous studies have examined the potential that blockchain offers inmultiple application sectors, as well as the benefits and different kinds of blockchain. This paper presents a comparative studyof bitcoins in blockchain technology and the workflow of thebitcoin, compares bitcoin and Ethereum, and provides the use of smart contracts in this emerging technology. The methodology considered for this research is the Ethereum blockchain in smart contracts using a solidity programming language.
Abstract This study focuses on the analysis of cryptocurrency regulatory developments in Europe. The aim is to review national crypto-legislation in Europe and the EU's latest initiative to create designated regulatory instruments for the crypto-economy. This study assessed whether the European Union's Regulation on Markets in Crypto-Assets (MiCA) would have the intended effect. Drawing on the results of a survey of crypto experts from five European countries, this study evaluated the effectiveness of current regulation across Europe and how it can be improved to reduce financial crimes. The findings show that a unified national legal framework for regulating transactions with crypto assets does not exist in European countries. Current crypto regulations are dictated by anti-money laundering recommendations. This study provides suggestions for improving MiCA regulation. The article offers recommendations for an international regulatory standard for crypto assets and insights for increasing efficiency in regulating DeFi, NFTs, and smart contracts.
The article delves into a comparative study of the legal regime of smart contracts in Russia, Germany and the United States. In-depth analysis of the concept, normative support, technological and legal nature of smart-contracts is carried out, the areas of application of this tool in civil law transactions and other legal relations are highlighted. Significant conclusions were obtained. Firstly, in the legal systems under consideration there is still no unambiguous definition of a smart contract. Secondly, a smart contract is understood to a greater extent as a program code embedded in websites or mobile applications, providing a number of elements of the procedural side of various transactions, rather than as an equivalent of a civil law contract. Thirdly, the areas of application of smart contracts are constantly expanding, they are used in the work of e-government, banking, e-commerce, electoral processes, and other legal relations. This requires the active activity of legislators in the countries in question.
The process of smart contracts, from conceptualization to actual landing applications, is accompanied by the continuous development of blockchain technology. China attaches great importance to the application of blockchain technology represented by smart contracts in judicial practice, with the background of the construction of smart courts, relying on the construction of judicial blockchain, according to the unique automated execution characteristics of smart contracts, the mediation and execution of civil disputes filed as an entry point, to explore the high-quality development of the judicial trial and execution business. In the current judicial practice, smart contracts face a lack of legal norms, technical construction loopholes, and information security risks. To guarantee the reasonable and compliant stable operation of smart contracts within the legal framework, it is necessary to clarify the legal positioning of smart contracts, strengthen the construction of the rule system for the judicial application of smart contracts, introduce the ODR to broaden the rights' relief channels, and at the same time, encourage the participation of diversified subjects in the construction of the judicial blockchain, and establish the legalized review mechanism of smart contracts.
В статье рассмотрены особенности цифровых финансовых активов (ЦФА) – качественно новой экономической категории, имеющей значительный потенциал в качестве инструмента инвестирования и финансирования бизнеса. Представлена краткая характеристика правового регулирования ЦФА, необходимая для понимания их сущности и состава входящих объектов. Выявлены основные преимущества, недостатки и возможные перспективы развития ЦФА в России. Introduction. Among the most promising cutting-edge tools that can significantly transform and improve the efficiency of business operations are, first and foremost, artificial intelligence, digital and cloud technologies, distributed ledger technologies, robotization, and many others. The emergence of fundamentally new objects, such as digital rights, including digital financial assets, cryptocurrency and others, necessitates an examination of their economic substance and an evaluation of the opportunities and challenges associated with their practical application. This article aims to present the findings of a study on the economic nature of digital financial assets (DFAs), their legislative and regulatory mechanisms, the benefits and risks they pose, and an analysis of their potential use in Russia. Results. The article focuses on the critical aspects of legal regulation of the new economic categories, including digital rights and DFAs. It uncovers their essence and features and presents various perspectives of specialists on the primary characteristics of DFAs. The article outlines the crucial prerequisites for the development of the global and domestic DFA market (the active use of blockchain technology, widespread use of cryptocurrencies, and global and macroeconomic changes). It provides data on the volume of transactions with DFAs in Russia for 2022-2023 and an evaluation of market growth prospects. The article also presents the main advantages of DFAs, such as investment attractiveness, security and transparency of records entered into the blockchain, the possibility of "splitting" a significant investment asset into parts, the lack of risk of unauthorized changes, and others. It also discusses the challenges of their practical use. The study concludesthat the use of DFAs as a tool for attracting investment (also by medium and small businesses) and financing, with an understanding of their inherent risks, will facilitate effective financial and investment decision-making. It will also assist in the optimization of business processes and interactions with business partners.
International Scientific Conference Transformation processes of the economic system in the context of modern challenges : Conference Proceedings (February 2–3, 2024. Klaipeda, Lithuania). Riga, Latvia : Baltija Publishing, 292 pages.
Exploring mechanisms for internal data sharing within government departments is important in advancing digital and intelligent society. This paper is based on the establishment of decentralized nodes on the external network of government departments, constructing a decentralized node, and establishing a government internal data sharing model based on blockchain. Subsequently, integrating attribute fields from government data into the shared model, accompanied by the formulation of data-sharing rules through smart contracts, serves to streamline the implementation of efficient and secure cross-validation mechanisms across diverse departments. Finally, this article concludes by conducting a model performance testing experiment, evaluating the model from three perspectives: storage cost, blockchain performance, and security analysis. The test results show that our model enhances the efficiency of querying and retrieving data within the government's internal data-sharing system, effectively addressing challenges such as low efficiency, high costs, and issues related to the security and real-time aspects of data sharing within the government. Overall, our article provides a new way of thinking about government data sharing.
The use of new technologies, including blockchain and NFT, can become a tool to ensure protection of rights and legitimate interests of copyright holders and stimulate innovation in various fields. The paper considers two legal problems related to the deposit and turnover of the results of intellectual activities, including copyrighted works. The first problem is the possibility of using blockchain technology to deposit such works. The paper provides an overview of main methods of fixing the fact of existence of a copyrighted work, including options without depositing and with depositing. The author concludes that depositing an object of copyright, including blockchain, does not mean its use in the sense of civil law. The second problem is the turnover of rights to deposited objects. The author suggests the best way for the copyright holder, i. e., depositing the result of intellectual activity with subsequent transfer of the NFT to the copyright holder. This solution will make it possible to equate the transfer of NFT with the transfer of the exclusive right to the work.
Blockchain technology, with its characteristics of decentralization, immutability, and transparency, has introduced an unprecedented trust mechanism to judicial record-keeping. Amid challenges faced by traditional methods, such as vulnerability to tampering and difficulties in tracing, blockchain ensures the authenticity and integrity of evidence through distributed ledgers, significantly enhancing the credibility of legal evidence and judicial efficiency. As blockchain applications in judicial record-keeping advance, issues including ambiguous review standards, lack of industry regulations, concerns over technology maturity and security, as well as inadequate public awareness, have emerged as areas that cannot be overlooked. Looking forward, blockchainbased judicial record-keeping will progress from isolated implementations towards integration across the entire judicial system chain. Efforts should be directed towards establishing review procedures and recognition standards tailored for blockchain records, fostering a unified deposition platform and standards, intensifying talent cultivation and education, refining evidence examination processes, and advocating for the development of new evidence rules that accommodate the unique attributes of blockchain, thereby promoting justice and efficiency in the judiciary.
Abstract This paper constructs the logical framework of the smart contract model based on the sale and purchase contract transaction, integrating the legal framework and the smart contract. The smart contract model merges blockchain technology’s decentralized features with smart contracts to create a decentralized service mode for sale and purchase transactions. The classification of transaction attributes optimizes and adjusts the matching degree calculation method to meet the needs of both buyers and sellers. The matching degree determines the total satisfaction of both buyers and sellers. The simulation experiment model is designed to analyze the matching results, and the experimental results indicate that the overall utility value range is between 0.1 and 0.5, resulting in a higher level of satisfaction for both parties involved. Applying the model to actual purchase and sale transaction contracts, the expected profit of transaction users after using smart contracts is 26,300 yuan higher than that without using smart contracts. The accuracy and confidence scores of experienced users are 0,8886 and 4.0493, respectively, when evaluating their perceptions of the use of smart contracts. Smart contracts can help participants identify sales and purchase problems and provide innovative perspectives on the application of contract law.
The recent growth in blockchain usage has substantially affected the number of transactions executed via smart contracts. In parallel, the number of transactions will likely increase the number of disputes arising from these smart transactions. Some innovative arbitration platforms have emerged in response to the urgent need for a tailor-made dispute resolution mechanism. These platforms tend to promote the anonymity of arbitrators because of their decentralized nature and secured proceedings. Does the anonymity of arbitrators' identities and skills serve to increase the transparency in smart contract arbitration? And to what extent can the anonymity of arbitrators be sacrificed for more transparent proceedings? These are vital questions because concealing arbitrators’ identities contradicts the classical rules of traditional arbitration. As a promising dispute resolution method, smart contract arbitration should untangle such a transparency issue. However, unveiling these data may radically endanger blockchain's decentralized and anonymous nature. Therefore, a trade-off emerges in terms of transparency. This paper is the first to analyze this trade-off comprehensively. The analysis is twofold. First, the paper considers the approach of traditional arbitration to anonymity. In such orthodox justice platforms as traditional arbitration, revealing arbitrators' identities and qualifications may prevail to avert breaching impartiality, independence and lack of required qualifications. Second, the paper examines the anonymity of arbitrators’ identities and qualifications in smart contract arbitration, considering the necessities of blockchain and the requirements of being a dispute resolution mechanism. Moreover, to clarify anonymity issues in smart contract arbitration, the paper also delves into the peer review process because of (i) its similarity regarding the anonymity of parties and (ii) the reviewers’ qualification-based selection process by editors. Then, this paper proposes an innovative smart contract arbitration model that contains (i) a qualification verification process through an entity like an editor in the peer review process and other alternatives for verification, (ii) a fair experience distribution method, and (iii) a competitive incentive model. Consequently, this paper proves that revealing qualifications while keeping identities anonymous because of the decentralized nature may be a game-changer for smart contract arbitration.
This study explores the opportunities and challenges presented by smart contracts and their technological foundation, the blockchain.It details the history and mechanics of blockchain technology, emphasizing its decentralized, immutable, and tamper-proof nature.the paper delves into the concept of smart contracts, tracing their origins to nick Szabo and their evolution through the ethereum blockchain.It highlights the role of oracles in enabling smart contracts to interact with the physical world and addresses various practical issues such as immutability, code errors, and the legal implications of smart contracts.The study also examines the integration of artificial intelligence (AI) in smart contracts, discussing how AI can function as an oracle to provide reliable information and support the contractual process.By examining different types of blockchains and smart contracts, the study provides insights into their potential applications and the inherent limitations and risks associated with their use, particularly in terms of legal enforcement and jurisdiction.
En la era digital actual, los contratos inteligentes o Smart Contracts, han surgido como una propuesta innovadora que promete evolucionar la forma en que se ejecutan o se suscriben los contratos y acuerdos entre personas. Este programa informático permite ejecutar automáticamente los términos de un contrato cuando se cumplen ciertas condiciones predefinidas. Los contratos inteligentes están basados en la Tecnológica blockchain o cadena de bloques, que básicamente es una base de datos donde se almacena información en bloques de manera segura e inmutable. Sin embargo, este tipo de Tecnológica propone ciertos desafíos en el ámbito legal tanto en su aplicabilidad como la interpretación de los contratos. Por ende, este escrito busca definir el concepto de Smart Contracts, y cuáles serían los principales desafíos para la introducción de esta Tecnológica al ámbito jurídico.
Sara Houshmand, Pejman Piroozi, Hossein Monavari, Alireza Mazloum Rahani
The emergence of smart contracts and the increasing integration of artificial intelligence (AI) have introduced new dimensions to traditional contract law. These advancements have fundamentally transformed the nature of contractual relationships, raising questions about their legal validity, enforceability, and alignment with established legal doctrines. This research article aims to examine the profound impact of smart contracts and AI on the principles and foundations of contract law, particularly within the legal systems of Iran and India. Smart contracts, which operate through blockchain technology and automated execution mechanisms, challenge conventional notions of offer, acceptance, and consideration. The study explores the extent to which these contracts conform to existing legal frameworks and whether legislative adaptations are required to accommodate their unique characteristics. Additionally, the research investigates issues of liability, dispute resolution, and contractual interpretation in the context of AI-driven automation. Given the decentralized nature of blockchain and the self-executing nature of smart contracts, concerns regarding jurisdiction, regulatory oversight, and consumer protection have also emerged. This study employs a comparative legal analysis by examining relevant judicial precedents, academic literature, and statutory provisions from both Iran and India. The findings highlight the need for regulatory frameworks that balance innovation with legal certainty, ensuring that smart contracts function effectively while upholding fundamental legal principles. The article also provides insights into the broader implications of AI in contract law, discussing whether AI-generated contracts challenge traditional notions of contractual autonomy and intent. By addressing the advantages, challenges, and legal implications of smart contracts, this research contributes to the ongoing discourse on legal adaptation in the face of rapid technological change. The study emphasizes the importance of legal reform in facilitating the seamless integration of smart contracts within modern legal systems.
Цифрові фінансові технології (криптовалюта, крипто-актив, віртуальні активи, тощо) мають різну природу походження, що створює їхню неоднорідність і породжує специфіку правовідносин, у яких вони знаходять висвітлення через їх особливості. Метою дослідження є проведення правового аналізу їх визначень за джерелами їх висвітлення:1) міжнародні організації; 2) українське законодавство. Як результат, у дослідженні проведено правовий аналіз поняття «віртуальні активи» представлене в українському законодавстві та трактування тотожних понять «крипто-активів», які надають найвідоміші у світі міжнародні організації: Європейський центральний банк (ECB), Група розробки фінансових заходів боротьби з відмиванням грошей (FATF), Рада з фінансової стабільності (FSB), Міжнародний валютний фонд (IMF), Базельський комітет (BIS), Європейська комісія (EС), Міжнародна організація комісій з цінних паперів (IOSCO). На підставі проведеного дослідження через вибірку характерних рис у кожному з досліджених визначень цифрових-фінансових технологій, виявлена загальна прогалина, з урахуванням якої автором сформовано власне їх визначення поняття, виходячи з різних точок зору: фінансової, правової, технологічної, – що на думку автора є взаємодоповнюючими і дає змогу освітити це поняття найбільш повно.
Saeed Mohebi Ashtiani, Omid Ali Adeli, Mohammadreza Pourfakharan, Mohammad Hasan Maleki
Smart contracts are one of the most significant applications of blockchain technology, which have gained considerable importance in the financial industry. These contracts promote transparency and enhance good governance in the banking sector. The present research aims to conduct a Futures Study of smart contracts in the banking industry using a scenario-building approach. This research is applied in nature, and methodologically, it is a mixed-methods study. In this research, fuzzy Delphi, fuzzy WASPAS, and interviews with focus groups were used to analyze the data. In the first step, 37 drivers were identified through a literature review and interviews with blockchain experts. These drivers were then filtered using expert questionnaires and the fuzzy Delphi method. Nine drivers were selected for final prioritization using the fuzzy WASPAS method. The filtered drivers were ranked through prioritization questionnaires and the fuzzy WASPAS method. Based on the scores of the fuzzy WASPAS method and considering three criteria—expertise, importance intensity, and certainty level—the drivers of coordination and integration level of banks in adopting new technologies and contracts, as well as the integration level of information systems in the banking industry, were given the highest priority and were selected for scenario mapping. The research scenarios were developed based on the two prioritized drivers and through interviews with focus groups. These scenarios included: Smart Banking, Integrated Banking, Island Banking, and Traditional Banking. Smart Banking represents the ideal scenario, and practical recommendations were developed based on this scenario.