The objective is that smart contracts have the same legal validity as physical contracts. The technical regulations will be established in no more than 90 days
Through an amendment approved this Wednesday, January 23rd, the Italian Senate incorporated the concepts of “technologies based on distributed records” and “smart contracts” into its legal framework. The amendment to regulate the blockchain industry is called “Decreto semplificazioni” and represents the first regulatory attempt of this type in that European country.
According to the official information, the Constitutional Affairs and Public Works commissions of the Italian Senate approved the modification of the Simplification Law Decree to incorporate these concepts in it. This would be the first step that Italy takes to grant legal value to digital registers based on distributed accounting or ledger technology and smart contracts themselves.
The amendment also provides basic terms for the industry, such as Distributed Ledger Technology (DLT), as well as definitions of what smart contracts are, according to the document published on the Senate’s website.
The document states that any digital record based on blockchain technology may be legally validated at the time of registration, because these protocols produce the legal effects of other means contemplated in Italian law, such as physical contracts or electronic validation.
After the decree receives approval from the first committees of the Italian Senate, it must now be approved by the Italian Parliament and get the support of the Chamber of Deputies and the Senate of the Republic.
Once the decree is approved, it will become law, although, for the time being, the Agency for Digital Italy, which is the technical agency of the President of the Council of Ministers, must define the technical part of the legislation, within a period not exceeding 90 days.
Fulvio Sarzana, an expert blockchain spokesman for the group created by the Minister of Economic Development, commented on the initiative that Italy could try to legalize all transactions using distributed accounting technology to eliminate intermediaries in centralized institutions.
“The objective is to have the possibility of giving a legal value to a transaction which uses a distributed and computerized electronic record, without going through notaries or central certification bodies”, said the lawyer, adding that this new rule “grants a contract automatically executed by an IT program (Information Technology) the legal value of a normal contract, written and signed”.
An Advance in Europe
In December 2018, Italy became one of the seven countries of the European Union which urged the promotion of blockchain technology and its applications in the region.
Also, Italy became the 27th country to sign a declaration to create a European Blockchain Alliance and, in this way, to cooperate with the development of this technology in its jurisdiction.
These changes come from September 2018, when the Italian government joined the European Blockchain Association, after having maintained a cold stance about cryptoactive technology. According to the Minister of Economic Development, Luigi Di Maio, Italy joined the association in order to exchange experiences in the technical and regulatory field of this technology.
Since January of this year, a group of experts in cryptoactive technology, promoted by the Italian Ministry of Economic Development, some government strategies in this area, which will be sent to the European Commission to build a normative frame of reference for the entire region.
By María Rodríguez