“What makes blockchain so important within the legal world is the use of smart contracts. Would you like to have a contract that issues payments automatically? Smart contracts use blockchain to automatically fulfill different obligations, allowing for better monitoring of contracts. For example, a contract for purchase of a product could electronically identify when the product is finished from the manufacturer and trigger payment, or when a title deed is entered into a ledger, payment would automatically be paid.
“Efficiency and certainty in the execution of contracts, any complex multi-party transaction that is repeated with frequency, has great potential to benefit from this new approach,” says Butler. “The technology is still evolving and there will be new use cases every month that get tried and tested. We need to keep an eye on this space to see what use cases are successful, learn from them, and inform how we adapt it moving forward.”
Testing is underway. This year, JP Morgan Chase, Microsoft, Intel along with a few start-ups and non-profits founded the Enterprise Ethereum Alliance (EEA), a consortium working to create blockchain applications for the financial market, and smart contracts are part of the process. The R3 Consortium, founded in 2015, is also working with member organizations to create new FinTech applications. In March, the Illinois Department of Financial and Professional Regulation became the first U.S. regulator to join R3. Delaware will begin having “smart UCC” filings this year and is developing a distributed ledger for public shares.”
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SmartContracts - Blockchain, AI in Law, and Legaltech Blog (Curated by Lawyers) 