Cardano has become the platform for Argentina’s first smart contract with legal enforceability under local jurisdiction, following Argentina’s recent move to legalize cryptocurrency as a payment option in commercial agreements.
Smart Contract Legally Recognized Under Argentine Law
The groundbreaking smart contract, hosted on the Cardano blockchain, involves a loan agreement between Cardano ambassadors Mauro Andreoli and Lucas Macchia. The agreement covers a loan of 10,000 ADA tokens, valued at approximately $3,380, with a repayment term of four months at an interest rate of 10%. For the first time, an Argentine court has jurisdiction to enforce a full repayment in ADA through this smart contract, as confirmed by Andreoli in an October 8 social media post.
“We’ve successfully signed the first legally enforceable smart contract on Cardano, fully compliant with Argentina’s laws,” Andreoli shared.
To formalize the contract, both Andreoli and Macchia signed an accompanying legal document that specifies critical details, such as the blockchain used, the wallet addresses involved, and the transaction ID. This documentation establishes the framework for potential legal enforcement if needed.
A Step Towards Broader Acceptance of Smart Contracts
Andreoli described this development as a “milestone” for Argentina, suggesting it could accelerate the country’s recognition of smart contracts as a legitimate tool for commercial transactions. He emphasized the potential for these digital contracts to streamline various legal agreements, such as house rentals and purchase deals.
“This provides a legal basis and simplifies procedural steps, creating a foundation for favorable case law in the country and enhancing commercial activities,” Andreoli explained.
Despite Argentina already having a solid legal framework for commercial contracts, Andreoli highlighted the need to educate judges about blockchain technology to further integrate it into the legal system.
Argentina’s Growing Crypto Integration
In December 2023, Argentina legalized Bitcoin and other cryptocurrencies for use in commercial contracts. This legislation came shortly after anti-central bank libertarian Javier Milei assumed the presidency. Cardano’s founder, Charles Hoskinson, is scheduled to meet with Milei at the Cardano Summit 2024 in Buenos Aires later this month, hinting at further collaboration and potential crypto developments in the country.
Crypto Technology in Legal Proceedings Worldwide
Argentina’s move to integrate blockchain technology into its legal framework mirrors global trends. For instance, a U.S. court in August 2023 used a blockchain enforcement tool to restrict sanctioned individuals’ access to their crypto wallets. In 2022, the High Court of England and Wales allowed the delivery of a lawsuit via a non-fungible token (NFT). Later that year, a federal court in Florida permitted a lawsuit to be served via an NFT to the wallets of unknown crypto theft suspects.
Future of Smart Contracts in Argentina
As Argentina embraces blockchain technology in its legal system, experts believe smart contracts could become more commonplace for various transactions. The country’s legal acceptance of cryptocurrency, coupled with this new legal precedent, may pave the way for broader use cases and further innovation in the digital asset space.
