Interesting piece penned by Cypriot law firm, Antoniou McCollum & Co LLC, for Lexology. As far as we are aware, this is the first detailed article by a lawyer on the subject.
The full article can be found at: https://www.lexology.com/library/detail.aspx?g=c77115fa-b8d7-48c0-90d8-f2bb0ad73237
The extraordinary momentum behind the growth of programmable blockchain technology and its potential to revolutionise economic activity is debated every day on multiple media forums. Discussion of the legal consequences of this unprecedented shift in system architecture towards decentralized processes that are more efficient, more secure and more transparent has failed to keep pace.
This late start to a more substantial debate on the legal implications of blockchain may be due to the fact that the distributed ledger technology’s more appealing elements, disintermediation and decentralisation. This may be taken to imply, wrongly in my view, that blockchain technology will operate outside of current legal and regulatory constraints. Against this setting, interesting – albeit predictable – questions arise. Although this prompts the question whether new legislation is required to wrap blockchain transactions in the cloak of legality, this is not the pivotal question blockchain proponents should be asking, or lawyers addressing.
Law as a blockchain facilitator
That the law is sometimes seen as a force that inhibits rather than enables blockchain, is far from reflective of reality. There are voices, largely from the world of technology, whose enthusiasm over blockchain technology completely disregards the social function of our legal systems, the prevalence of the rule of law and the legal certainty that commercial transactions require. More alarmingly, they ignore the fact that, for blockchain transactions to be the effective instruments they purport to be in a microeconomic context, all parties involved must have identifiable, legally enforceable rights.