The Legal and Compliance Challenges of Deploying Blockchain Solutions Globally

The world of blockchain technology keeps advancing and keeps getting better day by day as it has been able to transform a lot of sectors around in the world and how it has been able to achieve that is through the transparency and Decentralisation nature that the Blockchain technology actually has. Of course there are a whole lot of solutions that the Blockchain technology has been able to offer which most of the time we take for granted but even with those solutions, there are also challenges attached to it which are legal challenges.

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Let me start by establishing some of the challenges. The first is the regulatory uncertainty and fragmentation that the world of blockchain is facing. The fact that in some parts of the world and countries, the rate at which they adopt the Blockchain technology actually differs. In some countries like Switzerland, they have embraced the Blockchain technology but in some parts of the world, they are not able to.

The second challenge is the aspect of data privacy and protection laws. The fact that Blockchain been Immutable in nature makes it hard for compliance with privacy laws most especially when it is in regards to the data aspect. In fact, I believe strongly this has been affecting a lot of Blockchain solutions to be applied in several sectors of the world. Data privacy laws are becoming a major concern and will continue to become a major concern if not addressed.

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The third aspect I will like to talk about is also the cross border legal issues. Like I said earlier, not all countries have fully accepted or adopted the Blockchain technology and so because of this it is affecting the cross border operations. Take for instance issues regarding the taxation which is becoming a major concern and even though cross border transactions are being regulated by Blockchain, but I believe if not addressed will become a major issue in years to come also.

The last one is the aspect of smart contracts for legal enforceability. One of the major reason why Blockchain technology thrive is the aspect of smart contracts and most of the time we did not really see them physically but they work in background. Even though smart contracts are the major backbone for the Blockchain technology, I will say in some legal jurisdiction, there is still no legal recognition of smart contracts even till now. And not only that, smart contracts are also prone to errors and bugs which can cost huge financial transaction loss.