What does the Draft Law on Digital Property bring to the economy and how safe is blockchain?

Source: eKapija Thursday, 22.10.2020. 13:59
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Illustration (Photo: Unplash / Austin Distel)Illustration
On October 14, the Ministry of Finance published the Draft Law on Digital Property, which, according to the Association for Electronic Communications and Information Society of the Chamber of Commerce of Serbia, aims to additionally stimulate the development of blockchain and tokenization, as well as the financing of innovative projects in Serbia.

All experts and interested citizens were invited to submit suggestions for improvement by October 28. The law is expected to be adopted by the end of the year and the implementation is expected to start in early 2021.

As Bojana Tomic Brkusanin, the director for legal and regulation affairs at the Digital Serbia Initiative, says for eKapija, the Draft Law on Digital property is a big step toward removing legal uncertainties in this field, while also sending the message that Serbia is a country where cryptoproperty has been recognized and where legal business can be done with it.

Regulation of investment crowdfunding – Opportunity for startups

She adds that the draft law is important from several angles: it removes legal uncertainties for all persons who operate in this area in any capacity, it removes suspicion that they are doing something illegal, it regulates the operations of persons who provide services in this field in a way that increases the operation standards, it protects investors and it helps further development.

– Finally, something that is very important for the Digital Serbia Initiative, this law proscribes the possibility of investment crowdfunding through the issuing of digital tokens, but also bonds, under certain conditions, which opens the possibility of development of an alternative approach to the financing of startups. This law creates the possibility of the implementation of ICO in Serbia through the issuing of user and investment tokens, proscribes the procedure of publishing of advertising white papers, that is, it standardizes the information set that needs to be available to investors. This way, innovative companies in an early stage of development can finance their projects, investors get protection, and blockchain companies can offer IT solutions to back such projects. In order for this to really happen, this law is the necessary first step. The next important thing is to establish a stimulative taxation and accounting framework, to adopt bylaws which will not impose additional obligations and obstacles that would discourage potential service providers and token issuers – explains Bojana Tomic Brkusanin.

Cryptocurrencies have no legal status as money or currency

Cryptocurrencies are bought for the purpose of investment (Photo: Pixabay / MichaelWuensch)Cryptocurrencies are bought for the purpose of investment


When asked whether this is a step toward a future in which currencies and cryptocurrencies are equal, Bojana Tomic Brkusanin says that this law does not make cryptocurrencies equal to legal means of payment and that the draft law explicitly states that they have no legal status as money or currency.

On the other hand, the draft law confirms that cryptocurrencies, as a special category of digital property rights, can be accepted by natural or legal persons as a means of exchange and that they can buy, sell and exchange them.

She adds that research has shown that, so far, cryptocurrencies have mostly been bought for the purpose of investment.

Blockchain applies to more than just cryptocurrencies

Blockchain has achieved its popularity primarily as the technology behind cryptocurrencies, primarily bitcoin. The essence of blockchain is easier to understand than might appear at first sight from the definition itself, Bojana Tomic Brkusanin says and adds:

– Blockchain is literally just a series of digital information, “blocks”, located in a data base, `the chain”. So, these “blocks” in this digital chain are in fact digitized part of the information, so blockchain technology can be used to keep, record and store various data, for example, about monetary transactions, ownership and exchange of property, procurement chain, voting, even the manner of keeping personal data.


Blockchain is taking over the role of traditional service providers, mediators and administrators in various areas, while also simplifying the whole process, reducing the costs and making everything safer.


Blockchain is taking over the roles of traditional service providers (Photo: Pixabay / TheDigitalArtist)Blockchain is taking over the roles of traditional service providers


Blockchain solutions largely improve security

Blockchain technology has several characteristics which are inherently related to the issues of safety and trust. First of all, information blocks within a blockchain are stored in a linear and chronological fashion. Once new information is added to the end of the chain, it is practically impossible to go back and change the contents of that block, because each new block is inextricably linked with the succeeding one. In other words, once a block is added, it is very hard to change and impossible to delete. When it comes to trust, blockchain networks implement tests for computers that want to join the chain and add blocks.

– In that sense, we can say that there are various aspects of the blockchain technology which are very encouraging as help to the companies in facing the risks of safety and preserving the integrity of data, because the implementation of blockchain solutions can reduce the risk of potential fraud through some of the basic characteristics of this technology: non-changeability, transparency, its sequential nature, data encryption etc. All this, of course, does not mean that the implementation of blockchain is a full solution for securing data safety and that other measures, controls and the best practices in this field should not be implemented, but it certainly largely improves safety – Bojana Tomic Brkusanin says.

Aleksandra Kekic
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