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Mitrofanova I.A. The Legislative Regulation of “Smart” Contracts: the Problems and Prospects of Development

DOI: https://doi.org/10.15688/lc.jvolsu.2018.4.3

Irina A. Mitrofanova, Postgraduate Student, Department of Civil Law Disciplines, Volgograd Institute of Management – Branch of the Russian Presidential Academy of National Economy and Public Administration, Gagarina St., 8, 400131 Volgograd, Russian Federation, This email address is being protected from spambots. You need JavaScript enabled to view it.

https://orcid.org/0000-0001-9472-4381


Introduction: currently, the whole world is experiencing tremendous changes in connection with the transition to the information society. This work is devoted to the challenges faced by contract law. The aim of this work is to study the theoretical and practical problems of the legal regulation of “smart” contracts. Methods: the methodological framework for the study is the dialectical method of cognition, which assumes the comprehensiveness, objectivity and interconnectedness of the studied phenomena; the general scientific methods of cognition (analysis, synthesis, hypothesis, analogy, etc.); the comparative law and functional methods. As a result of the study, the main problems arising in the legislative regulation of “smart” contracts were grouped. The technical ones include: the problem of describing the conditions in the artificial language, obtaining the data from the real world by the system, the reliability of the input data, the system errors, the speed of transaction processing, the inability to maintain the complete confidentiality of the operations. The legal problems include: the complexity of the contract verification by a lawyer, the lack of control of transactions by the state and tax authorities, the possibility of illegal transactions, the complexity of proving the fact of the contract, the definition of the applicable law, remedies. The legislation of some foreign countries, which is also under development, is analyzed. The analysis of the draft law “On Digital Financial Assets” shows that the document does not satisfy the requests for the legal regulation of the digital economy. In the definition, there is no indication that a “smart” contract is written in the artificial language, the turnover of the crypto currency is significantly limited. It is concluded that a “smart” contract is now rational to use as part of a paper contract for simple transactions with the measurable conditions. The draft law “On Digital Financial Assets” needs the significant improvement to simplify the turnover of digital assets and the development of the institution of “smart” contracts.

Key words: “smart” contract, digital financial asset, blockchain, obligation, crypto currency.

Citation. Mitrofanova I.A. The Legislative Regulation of “Smart” Contracts: the Problems and Prospects of Development. Legal Concept, 2018, vol. 17, no. 4, pp. 22-29. DOI: https://doi.org/10.15688/lc.jvolsu.2018.4.3

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