Smart contracts are best suited to execute somewhat rudimentary legal tasks, which typically involve transferring funds or imposing financial penalties when certain conditions are satisfied, explain Maria Alicia “Fernandez and Guillermo Gonzalez Frankenberger of Hogan Lovells.

“However, as the applications of blockchain and the assets controlled by it expand, the use of smart contracts is likely to become more complex and legally sophisticated,” they write in the firm’s Real Estate Horizons.

“Notwithstanding its promising applications,There are concerns that need to be addressed before the wide- spread application of smart contracts,” the authors explain.

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Steptoe & Johnson LLP announced that the Blockchain Alliance, a public-private forum to combat criminal activity involving cryptocurrencies and blockchain technology, has grown to include 100 industry and government agencies in 19 countries.

Founded in October 2015 by the Chamber of Digital Commerce and Coin Center and led by Steptoe, the Alliance is comprised of a broad coalition of companies and government agencies that work to make the blockchain ecosystem more secure through education and dialogue between government and industry. In less than three years, the Alliance has grown from 17 industry members and six U.S. federal agencies to a total of 100 participants all over the world, including not only cryptocurrency and blockchain technology companies but also regulatory and enforcement agencies on six continents, as well as international entities including Interpol and Europol.

Steptoe partner Jason Weinstein (former deputy assistant attorney general in charge of cybercrime investigations at the Department of Justice and a member of the strategic advisory boards of BitFury, Coin Center and the Chamber of Digital Commerce) serves as the group’s director. Steptoe of counsel Alan Cohn (former assistant secretary for strategy at the Department of Homeland Security and a strategic advisor to several blockchain startups) serves as counsel to the Alliance.

“The growth of this Alliance – with 100 members around the world representing industry and government – is remarkable and reflects the growth of the cryptocurrency and blockchain space as a whole,” Cohn said. “Our mission is to enable industry and law enforcement to jointly protect public safety and help create an environment where innovation can thrive, and it’s working.”

“The Blockchain Alliance is an important organization that furthers vital communication between blockchain-oriented businesses and government agencies to help strengthen their understanding of enforcement objectives and cooperation,” said Amy Kim, chief policy officer of the Chamber of Digital Commerce. “The group’s work is critical in fostering the development of properly functioning markets involving virtual currency in particular and is much needed at a time when policy makers continue to have questions about this space. Its efforts have been instrumental in aiding law enforcement to detect crime and prosecute wrongdoers.”

The Blockchain Alliance serves as a resource for law enforcement and regulatory agencies to benefit from the expertise of some of the brightest minds in the blockchain industry for technical assistance in response to challenges faced during investigations. The Alliance also serves as a platform for open dialogue among law enforcement and regulatory agencies and the blockchain community about issues of concern to make blockchain technology more secure and to deter its use for unlawful purposes.

Additionally, the Alliance provides education and technical assistance regarding cryptocurrencies and other applications for blockchain technology, including through a series of webinars that have reached almost 700 participants in more than 35 countries.

“We are proud of the meteoric growth of the Alliance in just three years. The companies in the Alliance are good corporate citizens, and they deserve the credit for their commitment to working proactively with governments around the world to promote a secure blockchain ecosystem – for the benefit of government, industry, consumers, and the public,” Weinstein said.

Business Insider summarizes the major findings of a new white paper by blockchain consortium R3 and global law firm Norton Rose Fulbright on smart contracts.

The white paper explores whether blockchain-based “smart contracts” are legally binding under current legislation in different countries.

The Business Insider article discusses the variety of possible smart contract models, the effect jurisdiction has on whether smart contracts are legally binding, the enforceability issues resulting from smart contracts’ underlying technology, and the importance of embedding dispute resolution mechanisms to reduce friction.

Read the Business Insider article.

Lance Koonce, writing on Medium.com, discusses the meaning of “smart” contracts, saying, “Before we can decide whether smart contracts are going to bring significant change to business and law, we first need to make sure we’re all talking about the same thing.”

“It does seem that everyone is talking about smart contracts. People tend to line up on one side or the other: Either smart contracts are going to have a revolutionary impact on business, or they are doomed to fail,” Koonce writes.

He contends that in some situations a smart contract really just a transaction, and in others it’s more like a legal contract.

“One way to view these two different categories of smart contracts is just to see them along a scale, from existing legal contracts, to legal contracts that are partially reduced to code, to transactional terms completed reduced to code. Which type we chose will depend on a variety of factors, and in particular on balancing the need for efficiency and speed with the need to cover all contingencies,” he explains.

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Banks’ interest in smart contracts could lead them to beef up their legal departments in the near term, as the financial industry and regulators alike continue to wrestle with the implications of blockchain technology, writes Brian Patrick Eha of American Banker.

In his article Eha explains that “a smart contract is a piece of software that executes its terms automatically and encodes rules agreed upon by all parties. Smart contracts are decentralized — living on a blockchain — and transparent, viewable by all parties. They can be used to transfer value, and that transfer is triggered in response to certain events.”

“What if smart contracts were to catch on? Ideally, the code would be reusable in the form of templates, cutting down on legal busywork. Just not all legal work,” according to the article.

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Blockchain technology is gaining attention for its promise to enable value and asset transfer across a wide range of industries and use cases — and its potential to disintermediate financial institutions, remittance companies and lots of other transactional middleman businesses, according to a report written by Sue Troy, an editorial director at TechTarget. Smart contracts, meanwhile, work hand-in-hand with blockchain technology and have the potential to automate — and also disrupt — processes in many industries.

“Whereas a traditional legal contract defines the rules around an agreement between multiple people or parties, smart contracts go a step further and actually enforce those rules by controlling the transfer of currency or assets under specific conditions,” she explains.

She discusses sample use cases for the insurance industry, real estate, and supply chain.

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Blockchain-based smart contracts have enormous potential to streamline financial transactions and reduce the counterparty risk associated with monitoring or enforcing contractual obligations, write Nicolette Kost De Sevres, Bart Chilton and Bradley Cohen in an article published on the website of DLA Piper.

“Although the blockchain was developed to facilitate cryptocurrency transactions, entrepreneurs are now developing the technology for use in smart contracts,” the explain. “To develop a smart contract, the terms that make up a traditional contract are coded and uploaded to the blockchain, producing a decentralized smart contract that does not rely on a third party for recordkeeping or enforcement. Contractual clauses are automatically executed when pre-programed conditions are satisfied. This eliminates any ambiguity regarding the terms of the agreement and any disagreement concerning the existence of external dependencies.”

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Josh Stark, lawyer and head of operations and legal at blockchain consulting firm Ledger Labs, comments in an opinion piece on CoinDesk on “smart contracts” as an alternative form of legal agreement, speculating on how they could come to impact his industry.

“Banks, exchanges, and other financial institutions are actively developing blockchain technologies that will enable them to store and trade real assets over blockchain systems. Nasdaq, in partnership with blockchain startup Chain, has developed and begun testing a private-market equity trading platform,” he writes.

“The impact will not be limited to financial contracts, although these are the most obvious use cases. As techniques are developed that enable other types of property to be recorded and transacted on a blockchain, the possible applications for smart contracts will multiply,” he adds.

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Even though they are still largely theoretical, smart contracts are being hailed as a force that will disrupt a number of industries, write Mark Hines and Niklas Holmberg of Gowling WLG in a post on Lexology.com. However, only superficial attention has been paid to the impact smart contracts will have on contract law and the role of the law in determining where and how smart contracts will be used.

Their post provides an overview of smart contracts and how they work and identifies some of the areas of contract law that we expect will be the focus of jurisprudential change.

They explain smart contracts, blockchain technology, and the legal implications of smart contracts.

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All bitcoin transactions are smart contracts, points out Chris DeRose on AmericanBanker.com. “Many institutions, which are increasingly exploring the use of blockchains for value settlement, have been similarly dabbling in the application and uses of smart-contract technology,” writes the community director of the Counterparty Foundation.

“Smart contract” essentially means “programmable money” or self-automated computer programs that can carry out the terms of any contract.

“The finer points of what programmable money is are still being worked out by enthusiasts, but most agree that it is a financial security held in escrow by a network that is routed to recipients based on future events, and computer code,” writes DeRose.

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