Smart Contracts as Innovative Contracting Practices in the Digital Economy

Mosakova E.A.


The rapid development of IT-technologies contributed to the emergence of fundamentally new blockchain technology and its active integration into all spheres of society. In finance, in particular, such innovative contracting practices as blockchain-based smart contracts have become widespread. Smart contracts are self-executing contracts that are written by a software code on the blockchain platform and the unit of payment in which the newest form of money in cryptocurrency. The article examines the defining features of smart contracts as well as their advantages and disadvantages over traditional standard form contracts. The article shows that today the number of smart-contracts is still very small – a little more than 30 banks and tech giant companies have joined the Ethereum platform to conclude smart-contracts. The greatest difficulty in the functioning of such contracts is that they often require special knowledge in the field of programming. The article justifies the conclusion that today, smart contracts are hardly applicable to most cases of the real economy realm and, in the short term, they might be an organic complement to traditional contracts, facilitating contract management through the automation of some processes. These contracts were most widely distributed in the banking sector of the economy. Moreover this technology has a huge potential in the context of the fourth industrial revolution in international payments. Resolution of technical and legal issues surrounding the use of smart contracts will contribute to their more frequent use and to the creation of an entirely new innovative business model. Furthemore (не нужна запятая) an increase in the number of smart-contract concluded will contribute to a wider spread of cryptocurrency and a decrease in the share of cash in the economy.


smart contracts; self-executing contract; deal; blockchain; cryptocurrency; Bitcoin; financial sphere; economy.

DOI: 10.31249/rsm/2021.02.16

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