English Lawmakers Plan to Adjust Law to Smart Contracts
On Sep 30, 2020
Law Commission begins to analyze the law regarding smart contracts and digital assets. The chief purpose is to find any gaps in the law.
The cryptocurrency continues invasion of the world. The usage of smart contracts, exchanges of crypto assets increases, and it demands new regulations from the government side. Countries adopt new rules according to the development of cryptocurrencies.
England plans to adjust law
Understandably, regular regulations are prepared for natural contracts by the entities. Since the smart contract uses technological means, then those laws need to be adjusted by the Law Commission. Wide usage of the smart contract makes changes a requirement. When will the contract is written in code be legally binding? What will be legal consequences if parties do not perform their obligation posed by the smart contract? How will those rules be accessible to courts? The government will try to find the answer to those questions, and also other issues may arise from the application of smart contracts.
Law Commissioner, Professor Sarah Green said:
“Smart contracts, digitized assets, and electronic documents promise to revolutionize the way we do business, digitizing existing processes, and in some cases introducing entirely new concepts. There are, however, lingering uncertainties about whether and how English law can accommodate these.
“We believe there is a compelling case for reviewing the law in these areas to ensure that the jurisdiction of England and Wales remains a competitive choice for those who want to use and to develop emerging technology.”
Considering digital commerce will be wildly used, finding gaps and adjusting laws to a new environment is crucial for a moment. The Bills of Exchange Act 1882 does not cover some of the characteristics of the smart contracts. For example, the agreement between is not tangible as regular documents, and parties signed those contracts with their public keys. Similar features to this will cause considerable difficulties for commerce, especially in international trade.
Government asked from Commission to make recommendations about the application of smart contracts and digital assets. This improvement will help crypto worlds to engage in smart contracts with more securely.