Apla, a technology company that develops blockchain solutions for governments and enterprises introduces Smart Laws as an answer to transaction fidelity surrounding blockchain technology.
Smart Laws allow verifying the existence of any licenses, permits and any other conditions necessary that were not taken into account when writing a smart contract. They provide a mechanism to verify or negate when the implementation of a smart contract contradicts the laws of the country or policies of the enterprise. In fact, they fulfill the role of legislation within blockchain ecosystems.
According to Markets and Markets, the global blockchain market is expected to reach USD 2,312.5 million by 2021. Moreover, with the recently launched 2021 UAE Blockchain Strategy, major banks, real-estates, and even postal services in the UAE are investing in blockchain technology to improve their cost base and business offerings.
Muhammed Arafath, Executive Director at Apla commented, “Dubai is well recognised for being at the forefront of technological innovation, and we are pleased to be able to contribute to the innovation. Increased security and autonomous governance was a key requirement that was realised when developing blockchain solutions. Our concept of ‘Smart Law’ is the most appropriate solution for transaction management, and allows governing bodies to pre-set their own regulations and conditions, thereby building a governing protocol within the system.
Smart Laws therefore bring several advantages to the deployment of blockchain technology. The first is that Smart Laws are able to function in conjunction with existing regulations, and even allow authorised parties to reverse fraudulent financial transactions, returning any stolen digital currency to rightful owners. They regulate contract execution with a higher level of control that is assigned by the governing authorities, and provide an opportunity for authorised parties to intervene and change the regulations embedded in the system as per updated requirements.
Secondly, the application of Smart Laws doesn’t contradict the immutable nature of the register, nor it’s autonomy or its decentralised attributes, as none of the previous entries have been altered. By bringing a system of law to code and creating Smart Laws built on top of smart contracts, a regulatory system is created where judicial recourse can be taken, and wrongs can be put right. Finally, if a party takes advantage of an error in a contract for their own personal gain, the law will come into effect, thereby revoking the negative consequences of the unauthorised action. This is done not by deleting a part of the register to travel back in time, but by executing a series of new transactions. This solution means that the integrity of the register is not compromised since changes will take place in accordance with a contract-law, which already exists in the network at launch.