The Zurich University of Applied Sciences (ZHAW) and major telecoms firm Swisscom have developed an integrated, certified e-signature to legally authenticate blockchain-powered smart contracts. The news was reported by Swiss financial news outlet Cash today, Jan. 29.
According to the report, a prototype for an Ethereum (ETH)-based smart contract was created by an interdisciplinary team of lawyers and engineers from ZHAW, together with Swisscom. The prototype was then designed to include an interface with a Swisscom-developed e-signature service, which can be used to replace the handwritten signatures that are required from all contractual parties under Swiss law.
Once verified, the e-signature triggers the secure and automated fulfillment of the conditions of the smart contract — whether the transfer of assets or rights, various specified terms or the contract’s conclusion.
According to Harald Bärtschi, professor at the ZHAW School of Management and Law, the integrated signature service will redress existing legal ambiguities for smart contracts:
"This is particularly important for Switzerland, as we have a mandatory written form for the transfer of claims and similar rights, and so far it has often been doubtful whether transfers on blockchain are legally binding. The solution combines the advantages of the decentralized blockchain infrastructure with the high security and trustworthiness of the certified signature."
As Cash further reports, not only Swiss legal frameworks, but also the European Union’s eIDAS Regulation require multi-party signatures under contractual law. Swisscom’s Peter Amrhyn has thus noted that the new prototype “opens up a multitude of international applications."
The solution is reportedly interoperable with multiple existing blockchain networks, including Ethereum, Hyperledger and R3’s Corda.
As reported, legal experts globally continue to debate the relationship between nascent smart contract technology and established legal precedent. Last week, a professor at the Friedrich Schiller University in Jena, Germany argued that smart contracts indubitably fall subject to private international law. She also discussed how differences in protocols and the contract’s code can differently determine the nature of this interaction.
This perspective has been shared by other voices globally, who have similarly argued that while smart contracts may complicate legacy frameworks, they nonetheless fall within the scope of existing national and international legal provisions.