KEY FACT: Cardano has achieved a major milestone by hosting the first legally enforceable smart contract in Argentina. The contract is a loan agreement of 10,000 ADA tokens, worth $3,380, payable in four months at a 10% interest rate. The contract which is between Cardano ambassadors Mauro Andreoli and Lucas Macchia, is subject to Argentine jurisdiction. This is the first time Argentine courts can legally enforce crypto payments under local laws, following the country’s crypto regulation for commercial contracts in December 2023. This development is seen as a step towards integrating blockchain technology into legal and commercial systems in Argentina.
Andreoli reviewing and signing the legal document. Source: Mauro Andreoli/X
Cardano Enables First Legally Enforceable Smart Contract in Argentina
Cardano blockchain has recently made a significant stride in its niche by hosting its first-ever legally enforceable smart contract in Argentina. This achievement, a loan agreement of 10,000 ADA tokens worth $3,380, payable in four months at a 10% interest rate, is between Cardano ambassadors Mauro Andreoli and Lucas Macchia. It is subject to Argentine jurisdiction and enforceable by local courts. One of the parties to the smart contract agreement, who also doubles as Cardano Ambassador, Mauro Andreoli, shared the development on his X page on October 10.
We did it, we have just signed the first legally and judicially enforceable contract on the Cardano network, in full compliance with the laws of the Argentine Republic. 🇦🇷📜... The contractual object was a loan between me and @LucasMacchia2 in ADA for the amount of 10,000, payable in 4 months at an interest rate of 10%. The transaction is notarized with the Tx ID. - Source
The smart contract, structured as a traditional loan deal, stipulates the exchange of ADA tokens, Cardano’s native cryptocurrency, between Andreoli and Macchia. What sets this contract apart is its ability to be executed and enforced by the Argentine legal system.
Argentine courts now have the authority to enforce crypto-based contracts like this one, a step that validates Cardano's blockchain capabilities as well as builds a bridge between cryptocurrency and real-world applications. This unprecedented legal recognition of blockchain-based agreements demonstrates the potential for blockchain to extend beyond mere technological innovation into the realms of enforceable law.
The introduction of crypto regulation in Argentina, recognizing cryptocurrency payments for commercial contracts in December 2023 paved the way for this event. The legislation provided that the nation allows crypto payments, including the use of digital assets like Cardano's ADA, in commercial contracts. This legal backing gives blockchain-based agreements the same weight as traditional contracts, an essential factor that has propelled the enforceable loan agreement forward.
The legally enforceable smart contract is seen as a huge leap toward integrating blockchain technology with the traditional legal and financial framework in Argentina, which is expected to help unlock the potential of smart contracts in the country’s economy. This regulation places Argentina among the leading countries in Latin America when it comes to embracing blockchain technology.
Going forward, businesses and individuals looking to utilize smart contracts can now gain clarity, hence, the risks associated with disputes over cryptocurrency payments will be reduced. This move is anticipated to enhance the growth of decentralized finance (DeFi) and promote wider blockchain adoption in the country.
Speaking on the development, Mauro Andreoli through his post on X platform says that the smart contract will facilitate more blockchain-based commercial transactions in the country.
In the photos of this thread, you can see many important details in the legal document, including the mention of the network, my wallet, the transaction ID of the loan agreement, and other personal details... Legally, this establishes evidence and streamlines procedural steps, marking the initial phase of creating favorable jurisprudence in the country and facilitating commercial transactions.
Andreoli further makes a case that the development would create opportunities for judges to be educated on the operations of blockchain which would help build a more robust legal framework for contracts based on the Argentine Civil and Commercial Code and Presidential Decree 70/23 issued by President Milei.
This win is not for Cardano but for the entire blockchain community, and it signals that decentralized technologies are here to stay and are poised to play a significant role in shaping the future of legal and financial transactions worldwide.
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