Jenny Holt
Blockchain technology is quickly becoming popular in Ukraine due to the transparency it offers. However, much remains to be seen as there is little legal framework governing this technology, and it will be interesting to see what the future holds as to how it will transform the practice of law.
Blockchain is the use of a digital ledger that can be programmed to record virtually any transaction that is considered of value and has been the platform behind cryptocurrencies.
How will Blockchain technology transform the practice of Law in Ukraine?
Blockchain & Bitcoin conferences in Kiev highlight the potential of this technology to record almost anything of value from votes, shares, ID documents, ownership titles, property, contractual rights, coins, financial transactions, to positive reviews. This makes it capable of disrupting and transforming many areas and paradigms of law.
The formation of contracts
Blockchain technology enables parties to form smart contracts, which are uniform and efficient. This will clearly change the approach that will be used in their drafting, administration, and enforcement. As this technology eliminates the need for middlemen, it does not mean that you won’t need lawyers. However, lawyers need to be knowledgeable about the tech revolution and capable of coding in order to initiate these contracts on Blockchain and appropriately advice their clients.
The doctrine of equitable principle
Due to the decentralized and anonymous nature of the parties transacting, it becomes difficult for the state to exercise its authority. This is because it cannot enforce, convict, fine, or indict any person. Therefore, there is a need to have a built-in arbitration mechanism coded on smart contracts.
Transparency
Despite the parties to the transactions being anonymous, the transactions are verifiable. As a result, there will be little room for disputes due to presence of irrefutable evidence of time-stamped signatures and records of finalized contracts. This also applies to disputes of property ownership.
In the Ukraine, the records of people who bought government property will remain unaltered and accessible to the government and the person who owns the property hence, reducing cases of legal redress, unnecessary cost, and confusion. Moreover, it will become easy to maintain records of licenses, criminal activities, and certificates among others. As a result, Ukraine is currently under consideration to be in the top five countries trending in growth as an influential country in blockchain technology.
Legal challenges posed by Blockchain technology
Intellectual property rights: as Blockchain technology is secure, time-stamped, and irreversible, you can record anything of value and be sure to have intellectual rights that could be accessed globally. As a result, the use of this technology might be the safest way to secure yourself against rights infringement on trademarks, patents, and copyright issues. Despite this technology being promising, it poses some critical legal questions:
- Which financial services regulation should be used?
- Whether data on Blockchain is a property with rights?
- In case one party is aggrieved, how do you reverse the transaction?
- Is the transparency of this technology compatible with Ukraine’s banking sector?
- How do you deal with the challenge posed by jurisdictional boundaries as you can access Blockchain nodes anywhere?
- Whether smart contracts can be made public or enforced despite having anonymous parties?
The use of Blockchain technology in Ukraine will continue to transform the practice of law by provoking and pushing the legal boundaries of existing laws. It is thus expected that Ukraine’s legal system and framework will be modified to accommodate this technology.
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