Use of Letter of Credit Form of Payment in the Implementation of Smart Contracts and Blockchain Technology

Abstract

Payments under a letter of credit are one of the forms of non-cash transactions, which is designed to meet the concerns of both the payer and the recipient of funds. Such obligations make it possible not only to perform quick payments, but also to obtain guarantee of the transfer of goods, construction or services. The advantages of this form of transactions can also be used in the implementation of blockchain technology and smart contracts, however, it requires adequate legal regulation. The aim of this publication is to consider the prospects for normative improvement of Russian legal norms in terms of regulation of both the letter of credit form of transaction and the use of information and Internet technologies in its implementation. The study conducted a comparative analysis of the subject composition and content of the “classic” letter of credit in international transactions and the initial Russian experience in the implementation of a letter of credit on the blockchain platform and the use of smart contracts. This approach, including consideration of the legislation of Russia and other countries, became the basis for the conclusion that the world community and the Russian legislator are at the initial stage of understanding this kind of public relations. In this regard, it is necessary to create unified international agreements in this area, agreed by the states among themselves, and harmonized with international standards of national law.