Earlier this year, one of the UK’s most senior judges urged lawyers to become familiar with cryptocurrency. Here, Rayshum Khan, paralegal in the Criminal Litigation department, explains why it’s important to be aware of blockchain, smart legal contracts and cryptoassets.
On January 11th, 2022, the Law Society published a second edition of its Blockchain Report, in collaboration with Tech London Advocates (TLA) Blockchain Legal and Regulatory Group.
Speaking at an event to launch the report, Sir Geoffrey Vos, Master of the Rolls, said: “Major developments are imminent. They will mean that every lawyer will require familiarity with the blockchain, smart legal contracts and cryptoassets.”
It was not the first time a judge has commented on cryptocurrency. In 2018, the Supreme Court deputy president Lord Hodge argued that the digital currencies “risk creating bubbles if they are not brought under governmental regulation”.
The new Law Society report provides comprehensive legal and regulatory guidance on the key issues lawyers need to be aware of in relation to distributed ledger technology (DLT).
The guidance suggests that three major developments are imminent, which will mean that every lawyer will require familiarity with the blockchain, smart legal contracts and crypto assets – both conceptually and functionally.
The developments are as follows:
- Firstly, the launch of central bank digital currencies that will put crypto-assets into mainstream use;
- Secondly, the widespread adoption of digital transferable documentation;
- Thirdly, the transition from analogue programmes, such as Word, to smart machine-readable documents.
It is suggested that this guidance will put lawyers in a far better position to understand how DLT and smart legal contracts are being, and will soon be, deployed in cases across the financial and industrial sectors.
Additionally, the guidance also suggests that “the UK must act quickly to clarify its policy approach and introduce new rules where relevant in order to give the market certainty and facilitate the development of efficient and orderly markets in cryptoassets.”
The impact of this is that it would put English law as the front and centre of the legal foundation for the blockchain.
Why is this relevant to lawyers?
- Lawyers are increasingly embarking on the role of project managers, working with various technological experts and specialists.
- Alongside the more well-known cryptocurrencies such as Bitcoin, DLT’s encourage the opportunity to build new platforms, products, and protocols.
- Lawyers will need to be aware of not only how code-based technologies operate but how these technologies impact the wider areas of litigation. This includes how decentralisation and smart contracts are changing the way financial, property and legal services are carried out.
- Finally, as the complexity of DLT grows, so does the need for lawyers to understand it.
This has been supported by the president of the Law Society, I. Stephanie Boyce, who said: “DLT, smart legal contracts and crypto assets will likely form the infrastructure of the digital economy and basis for future transactions, which lawyers will continue to advise on.”
In conclusion, it is imperative that lawyers develop their understanding of the evolving commercial and technological issues and how they impact the wider areas of litigation of law.