Blockchain in Ukraine: some legal aspects

Blockchain in Ukraine: some legal aspects

Contrary to popular belief that blockchain and cryptocurrencies are inseparable, there are quite good reasons to say otherwise.

While almost all countries of the civilized world perceive cryptocurrencies de facto and de jure with hostility, seeing them as a threat to their financial and economic stability, Blockchain continues its offensive in various spheres of life, including government institutions in countries that are Bitcoin-haters. 

A very successful example of how Blockchain technologies can break stereotypes and be applicable in the public sphere is the example of the implementation of such algorithms in Ukraine.

So, as a result of the fruitful cooperation of the Ministry of Agrarian Policy and Food of Ukraine with the State Agency for Electronic Governance, in the fall of 2017, Ukraine was literally rocked by the news about the transition to Blockchain technology of the Land Cadastre of Ukraine (a public state register with data on owners land along with technical data and a clear geographical reference). In the press releases distributed by government agencies, there was a thought in the style of “Ukraine is the world leader in the Blockchain industry in the field of public registries.”

It is curious, but what does such an innovation really mean for the common man from a technical and legal point of view, and most importantly, when will it work?

Experts and ministerial officials tried to answer this and other questions back in October 2017 at a conference dedicated to this event. However, disputes and discussions on this issue still do not subside.

According to experts, the “cadastre in a new way” will combine elements of internal security and civilian control. This, in turn, together with a reliable cryptographic model of protection against unauthorized changes from the outside, will give an additional level of trust on the part of society (and this is more than 7 million owners of land plots and more than 18 million plots) in the face of increasing cases of fraudulent and raider attacks on land business."

Innovations and the public nature of the register will also allow anyone to monitor the work of the cadastre. While compliance with the technical part of the regulations in cadastre (Blockchain component) will be responsible for the anti-corruption public organization Transperency International.

It should be noted separately that the software security for the land cadastre was provided absolutely freeby a large company known for its developments in the cryptographic field - the BitFury company. Which is also very significant for the successful development of the entire blockchain industry of Ukraine in conditions of severe pressure from government agencies in the current Ukrainian realities. By the way, it was BitFury that came up with another interesting initiative regarding the provision of software that will supposedly allow holding elections in Ukraine using blockchain.

Technologically and legally, the procedure for forming or making changes to the register will look something like this:

For each title document on land ownership there will be a QR code is attached, which in turn will encrypt all data about the owner, size and location of a specific land plot. Using the code, it will also be possible to identify the authenticity of a document and simply verify information in the register. Making changes to the cadastre will be possible only by authorized persons, for identification of whom an electronic digital signature or Bank-ID will be used.


Nevertheless, despite this. loud statements of the National Security and Defense Council of Ukraine and other government agencies, Ukraine still does not have a full-fledged regulatory framework that would clearly and substantively legalize the use of Blockchain (from a legal point of view).

The issue of introducing BlockChain not only into state registers (the next one, according to rumors, may be a register of property rights), but also into other areas of government functioning remains controversial. Despite all the positive and potential of this technology, the human factor cannot be ruled out. in existing registries of interference with all the ensuing consequences.

I would add that 2018 can truly become a testing ground for blockchain initiatives not only in Ukraine, but also in a number of other countries, and this will definitely only make things better for ordinary citizens.

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