The Legal Implications of Blockchain Technology in International Trade:

Navigating Smart Contracts, Cryptocurrencies, and Regulatory Challenges in a Decentralized Landscape

Hifa Binhayyan and Mohamad Almohawes

 

ABSTRACT: This research investigates the legal implications of blockchain technology in international trade, focusing on the regulatory treatment of smart contracts, cryptocurrencies, jurisdictional issues, and data protection challenges. It aims to assess whether current legal frameworks are equipped to address these issues and to propose policy recommendations for harmonized regulation amid growing global digital trade. The study adopts a qualitative doctrinal legal research method supported by comparative legal analysis and real-world case studies. It examines statutes, judicial decisions, and international policy documents from jurisdictions including the European Union, the United States, and Saudi Arabia. Data was sourced exclusively from publicly available legal databases, with no interviews or private consultations conducted. The research identifies five major challenges include the lack of standardized enforcement mechanisms for smart contracts; fragmented cryptocurrency regulation hindering cross-border trade; jurisdictional ambiguity due to blockchain’s decentralized architecture; legal incompatibility of blockchain-based documents with current trade laws; and conflicts between data immutability and privacy laws like GDPR. It also reveals that Saudi Arabia’s evolving regulatory approach reflects a hybrid model influenced by geopolitical pressures and digital sovereignty goals.