Technology is emerging in almost every field in today’s time and it is important for a country to grow for that matter. Among all the technologies like IOT (Internet of things), AI(Artificial Intelligence), etc, Blockchain technology stands at the forefront with a lot of opportunities.
Blockchain is basically a ledger that is used to maintain records virtually with a decentralized approach i.e. no single entity has control over it. Blockchain and cryptocurrency are often viewed as the same things but there is a remarkable difference between them. Blockchain is a type of technology that provides a decentralized and secure ledger for the storage and transfer of data. On the other hand, Cryptocurrency is a type of digital asset that uses blockchain technology to securely track and verify transactions of its units. Cryptocurrencies typically operate independently of a central authority and use encryption techniques to regulate the generation of new units and verify transactions. In a nutshell, blockchain is a technology and cryptocurrency is one of its potential applications. As bitcoin plays an important role in every sector like agriculture, government sector, telecom sector, banking and financial sector, industrial sector, etc, this article is about the scope of bitcoin in law and how it solves the major problems in the legal sector of a country.
BLOCKCHAIN AND LAW
In India, Blockchain technology is not yet utilized properly because there is no proper mechanism for it. But once we started accommodating blockchain in law it can help us in many different ways. First and Foremost it can help to reduce the case pendency which is one of the biggest lacunae of our judicial system. Traditional paper-intensive procedures take a long time, are subject to human mistakes, and frequently call for third-party mediation. Registration and reviewing of cases can be finished more quickly and effectively by automating these operations with blockchain. The blockchain may hold documentation and transaction information together, doing away with the necessity for paper exchange. Clearing and settlement can happen considerably more quickly because there is no need to reconcile all the paperwork.
Apart from that, blockchain can help in increasing the efficiency of courts and lower the costs to some extent by adopting some methods like e-courts, virtual hearings, etc. The best example is when the courts started virtual hearings in the unprecedented covid times. It was the first time that courts adopted such a method and the proceedings were continue even when everything is closed and inaccessible. This reduces the cost and time for everyone to a great extent and helps courts and common people understand the use of technology in legal proceedings.
Blockchain technology can be used by lawyers to automate and simplify their transactional work, as well as to digitally sign and immutably store legal agreements. The amount of work required to create, customize, and maintain ordinary legal documents is decreased through the use of programmed text, smart contracts, and automated contract administration. The customer benefits from these cost savings. Additionally, by reducing consumer complexity and exorbitant legal expenses, blockchain democratizes access to the legal system.
Many countries like Estonia, China, the United Kingdom, Ghana, Ukraine, Canada, and Sweden, among others, have already adopted blockchain in their legal system. Amalgamating blockchain technology with the legal industry would raise the public’s confidence in the legal system while lowering costs, time, and carbon footprints. It will also ensure improved security, transparency, and authenticity.
ISSUES FACED BY BLOCKCHAIN IN THE INDIAN LEGAL SYSTEM
Lack of transparency is one of the biggest issues when it comes to bitcoin and for this reason, The “Banning of Cryptocurrency & Regulation of Official Digital Currency Bill, 2019” (the “Draft Bill”) has been passed by the Department of Economic Affairs, Ministry of Finance. The Draft Bill aims to make many different cryptocurrency-related activities illegal in India. The law draws attention to challenges with holding, selling, getting rid of, or exchanging any kind of cryptocurrency. Only trading in cryptocurrencies is covered by the specified ban; using distributed ledger technology or using cryptocurrencies for research is not covered. According to the Draft Bill, anyone found mining, owning, selling, issuing, transferring, or utilizing cryptocurrency faces a fine, up to 10 years in prison, or both.
Another important concern is security. Although blockchain is a decentralized and secure technology, there are worries that it could be used for nefarious purposes like money laundering and financing terrorism. Also, there are some concerns related to data breach of individuals that becomes a hindrance in the way of bitcoin technology.
Additionally, there is an ambiguity for other issues such as well like regulatory ambiguity, lack of taxation clarity, a framework for intellectual property, etc, that need to be addressed to adopt blockchain in the Indian legal system.
Bitcoin has tremendous potential in the field of tech-based development and it also has a lot to do with the legal sector of a country. But overall, there are barriers to the acceptance and development of blockchain technology in India because the legal system has not yet completely embraced the technology and its potential applications. A thorough and accurate regulatory framework for using digital technology will, over time, boost efficiency by reducing errors and expanding access to legal education.
Author’s Name: Gungun Agrawal (Pravin Gandhi College of Law)