Smart Contracts, Blockchain, And Regulatory Evolution In Fintech And Sustainable Markets

Sharmin N. Chougule, Ph.D. Candidate in Civil Law and Constitutional Legality, University of Camerino, Italy, Consultant - Contracts, Compliance & Commercial Services, Integreon India

Acknowledgement: The author would like to thank Prof. Dr. Lucia Ruggeri for their insightful observations as well as guidance in finalizing the paper.

A. An Overview

The role of regulated markets and inclusive processes is crucial in leveraging the benefits of innovation for the entire society, particularly in the context of emerging technological solutions. Take, for instance, the field of financial technology a.k.a. fintech, where companies may be required by regulators to comply with strict data privacy standards and provide accessible products and services for underserved communities. Similarly, regulated markets and inclusive processes can play a vital role in promoting sustainable practices by incentivizing and supporting environmentally friendly approaches. Regulators may impose taxes or penalties on businesses that contribute to environmental degradation or climate change. Additionally, inclusive processes can ensure that all stakeholders’ perspectives and needs are considered in sustainability policy development and implementation.

With a specific focus on financial markets, the author proposes that smart contracts and blockchain have the potential to enhance the regulatory environment by providing greater flexibility and responsiveness. Smart contracts can automate transactional processes, reduce manual intervention, and increase efficiency. Additionally, they can be programmed to adhere to regulations automatically, minimizing the risk of non-compliance and fostering a transparent and compliant market. Blockchain technology can also promote accountability and transparency in regulated markets by providing a secure and tamper-proof record-keeping system. By creating a decentralized database of transactions, blockchain can make it harder for malicious actors to manipulate or tamper with data, which can decrease the likelihood of fraud and promote trust in transactions, ultimately improving the integrity of regulated markets. However, nothing comes without its snags and having said that, in this paper, the challenges associated with smart contracts and blockchain will also be discussed, specifically in relation to their relevance in this context.