Blockchain and the law: legal issues of a decentralised technology
Legal definition, evidentiary value, smart contracts, regulation: the legal questions raised by blockchain under French law.
This article was originally published in 2016. The legal framework has evolved significantly since then, notably with the French PACTE Act (2019), the EU MiCA regulation (2023) and case law on digital assets. The fundamental principles described below remain relevant, but recent regulatory developments are not covered.
A blockchain is a chronological, distributed and encrypted transaction database whose integrity is maintained by each user, who holds a complete record of all operations since its creation. Its logic is similar to an accounting ledger: it records events and makes them immutable. Each transaction is an encrypted block, verified by users and synchronised across the entire network. Once validated, a block cannot be deleted.
A blockchain may be public (open to all) or private (limited to specific users). Private blockchains are particularly relevant for regulated sectors (banking, insurance) where user identity must be known.
The French legislature provided an initial definition in an ordinance on cash vouchers of 28 April 2016: a shared electronic recording device enabling the authentication of transactions. This definition remains broad, but the concepts of sharing and authentication are pertinent.
Regulation is inherently in tension with the philosophy of blockchain, which aims to be decentralised and beyond external control. Bitcoin is the most striking example: currency is a sovereign instrument, entirely controlled by states, whereas digital currency exists outside state control.
Article 1366 of the French Civil Code defines an electronic document as admissible in evidence provided that its author can be identified and the integrity of the document is guaranteed. Blockchain satisfies the integrity requirement, but author identification remains problematic in public blockchains where transactions are pseudonymous. Private blockchains, where user identity is known, are better suited to evidentiary requirements.
Smart contracts are computer programs that automatically execute contractual terms when predefined conditions are met. In the context of cross-border contracts, interpretation difficulties linked to local law would be reduced, as conditions are interpreted automatically based on the code. Applications are numerous: automatic VAT collection, insurance claims processing, voting systems. For contractual issues in the software sector, see the SaaS contracting guide. For an overview, see the intellectual property services page.
Blockchain raises fundamental legal questions regarding evidence, regulation and contract law. The legal framework continues to evolve rapidly. If you are developing a blockchain-based project, book a call to discuss it.
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