The financial landscape around the world has changed quite a lot in the past few years. While investing remains hedged by stocks, bonds, and cash holdings, a new entry onto the scene has caused a bit of a stir: blockchain. It is both heralded and reviled, depending on whom is asked, and rarely understood by any outside the initiate. Bitcoin, Ethereum, and the rest of the cryptocurrencies (“cryptos” for short) have made headway in providing another means of payment and investment in global markets. The court system is realizing this change as well, from America to the rest of the world. Recently, China recognized blockchain as legally viable for authenticating evidence in its Internet courts, therefore, allowing blockchain to authenticate evidence. The Supreme People’s Court issued a statement that instantiates new rules for formally authenticating evidence with regard to the blockchain.
According to Nathan Rodriguez, “The Supreme People’s Court of China announced that Internet Courts in the country would recognize electronic data as evidence if the parties that submitted this data on a Blockchain which had digital signatures, hash value verification, and trusted time stamps.”
In other words, the court system in China will allow blockchain to authenticate evidence, if and only if that blockchain evidence can itself be authenticated. “Additionally,” Rodriguez continues, “if electronic data that has been entered in court is being disputed by any one party, then Blockchain technology can be used to authenticate evidence.”
In China, according to their civil law procedures, any lawsuits filed against a business or organization have to decide within that company’s primary municipality. As such, the Hangzhou Internet courts have witnessed a precipitous rise in cases relating to e-commerce. According to the Internet Court’s website, it takes just five minutes to file a suit online and that allowing blockchain to authenticate evidence will save the Chinese court system substantial money and time, as The Global Times reported. The Verge further reports that such cases climbed from 600 in 2013 to more than 10,000 cases just three years later.
This is a major statement from one of the world’s leading economic powers about the viability of blockchain and cryptocurrencies as a means of an electronic ledger. As China paves the way in many technological respects, the rest of the world may follow suit (no pun intended). Further, since blockchain as technology is touted as the most innovative way to authentically validate evidence, it seems almost necessary that many other countries will not be long behind. It is conceivable that blockchain could become an incredibly important player in the legal system, both in China and elsewhere.
There are various reasons for such a sea-change, but the most important is that blockchain provides a way to audit the data that takes place on its ledgers. Every entry is written in stone, as it were, unchangeable in any way once it is recorded. To make blockchain even more impressive as a technology, the actual security of the blockchain itself is instituted electronically before any kind of documenting or transacting can occur.
Again, though no other country has made such a claim about the authenticity and viability of blockchain and cryptocurrency, it is quite likely it won’t be long before others join the fray. According to Nathan Reif, “While no other country has yet followed in China’s path, the U.K. Law Commission did announce earlier in the summer of 2018 that it would review legal frameworks…so that it doesn’t lag behind as blockchain legal applications develop.” In other words, it is highly probable that blockchain will make its way off the fringes and into the heart of the global legal community, thanks to China’s recognition of it in their court system.
Download as PDF
Want a copy of this article? Download it for free!Download This Post