Blockchain Legal Protection
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Blockchain Legal Protection
The number of blockchain companies globally is growing steadily. Most business researches have revealed that a significant number of businesses in developed countries incorporate blockchain into their names because it is assumed that it will increase their value. It is essential for countries where these companies are registered to consider this growth. However, studies have revealed that blockchain does not work within a legal vacuum. Different rules and regulations apply based on how countries use the blockchain technology.
Most companies that have adopted blockchain technology lack special rules to regulate their operations, including their establishment and functioning. In such scenarios, the company’s legal protection is based on the general rules that govern other entrepreneurial activities (Drobyazko et al., 2019). The lack of a uniform regulation for blockchain has driven many jurisdictions to consider regulating cryptocurrency and other related operations.
Many jurisdictions globally have introduced regulatory frameworks for blockchain; however, most of them focus on financial operations. There are multiple decentralized operations that require legal protection. Despite the challenges around implementing effective legal regulations, most countries have made efforts to minimize the use blockchain to commit illegal activities and ensure overall security. For instance, the People’s Bank recently implemented the Financial Distributed Ledger technology Security Specification (Ellul et al., 2020). The country implemented the security specification purposely to ensure there is a common base guiding the development of financial services based on distributed ledger technology. Similarly, the European Commission thorough the European Union Blockchain Observatory and Forum has an established regulatory framework of blockchains. The framework identifies the important parts of the technology that need to be regulated. Except for banning the use of cryptocurrency, most governments have not been regulatory players in blockchain technology.
References
Drobyazko, S., Makedon, V., Zhuravlov, D., Buglak, Y., & Stetsenko, V. (2019). Ethical,
technological and patent aspects of technology blockchain distribution. Journal of Legal,
Ethical and Regulatory Issues, 22(2S), 1-7.
Ellul, J., Galea, J., & Ganado, M. et al. (2020). Regulating Blockchain, DLT and Smart
Contracts: a technology regulator’s perspective. ERA Forum.
https://doi.org/10.1007/s12027-020-00617-7