Regulating Smart Contracts and Digital Platforms

Abstract

The advent of technologies like the blockchain brings changes and challenges to daily life as well as the commercial world. Blockchain technology facilitates groups of individuals to reach consensus without relying on a relationship of personal trust. The technology has been applied to numerous ways, such as cryptocurrency, logistics, financial services, and smart contracts. However, proponents of blockchain technology overestimate the power of private ordering and minimize the need for trusted intermediaries. The onslaught of technologies inevitably brings challenges that are fundamental to the commercial organizations and the legal system entrusted to regulate the market. The challenges presented by new technologies relate to individuals who trade through various means and the platforms that facilitate the trades. Therefore, a general question is whether innovative technology will result in innovative legal frameworks? This is a pressing question in China where blockchain technology and smarts contracts are increasingly being applied as e-commerce continues to expand. This chapter explores whether the legal landscape will need to be fundamentally changed in view of the emergence of smart contracts in China. It further examines the role of online intermediaries and assesses the regulatory framework relating to online platforms. The chapter acknowledges gaps in the existing regulatory framework, but argues that the current legal framework can accommodate or mitigate the legal risks presented by smart contracts. Innovative technology generally does not lead to a need for innovative jurisprudence.