Smart contracts, the blockchain automated programs, are now legal in Argentina after the local jurisdiction recognized the enforceability of the former. They can now be used to execute rental agreements, purchase payments and other legal contracts as cryptocurrency has now been approved for use as payment in commercial contracts in the country.
Smart contracts achieve legally enforceable status in Argentina
Smart contracts, the automatically executed, blockchain-based equivalent of paper contracts, have reached a milestone in Argentina. According to local reports, the first Cardano-based smart contract was approved as legally binding by the Argentine jurisdiction, which may be the first time this has happened in the country and even in the world.
The contract specifies a four-month loan, repaid with 10% interest, between Mauro Andreoli and Lucas Macchia, two Cardano ambassadors in Argentina. The loan was granted for 10,000 ADA (almost $3,430). Andreoli stated that this contract formalization means in practice that “any breach can be enforced in court for the fulfillment of the obligation in ADA.”
However, due to the digital nature of smart contracts, the duo had to sign a legal document in addition. This document specifies the details of the loan signed by the smart contract, the blockchain in which it is built, and the wallet addresses involved in the transaction ID. Since this is the first time this has happened, this type of document may also be needed in other cases to legalize smart contracts.
Andreoli emphasized the relevance of the event. He stated:
We did it, we just signed the first legally and legally binding contract on the Cardano network, in full compliance with the laws of the Argentine Republic.
Andreoli believes that the crypto community should work on educating national judges to get used to this new type of contract, emphasizing that this event “marks the first stage of creating favorable jurisprudence in the country and facilitating commercial transactions.”
Smart contracts are supported by President Milei’s Omnibus Bill, which legalized the use of bitcoin and other cryptocurrencies as part of commercial contracts in Argentina. Andreoli concluded that smart contracts can now be used to formalize rental or purchase agreements and other legal contracts.