The use of fintech has expanded at a very fast rate in different fields and has altered the way that they and perform and work financial transactions.
The legal sector which has always been considered as the slow adopter of technology is witnessing an innovation awakening due to the emergence of financial technologies. This has been causing shifts in the management of data, increase in efficiency and means of carrying out payments.
The role of fintech is transforming the way that legal practitioners and their clients work and the sector as a whole, marking the start of a new phase of legal services provision.
Cryptocurrencies in Legal Services
The decentralized networks powered digital currencies and these have greatly impacted the legal practices. People of young and old age prefer it since they enable precise, safe, and efficient conduct of business transactions.
Cryptocurrencies have begun to be incorporated as legal tender in legal firms due to cost reduction, secure, and efficiency. The most famous is Bitcoin which is known to be the king of the cryptocurrencies because of its seniority.
Another is Ethereum through which contracts that have legal backing can be initiated and implemented through the use of smart contracts which are self-executing contracts that are implemented as and when certain conditions have been met.
Other such successful cryptos are Bitcoin Cash that minuses the time and cost of every transaction more efficiently than Bitcoin; Monero that provides the element of anonymity; and Ripple, also known as XRP, which can process cross border transactions faster.
A relatively new phenomenon within the context of cryptocurrencies is the so-called Bitcoin ETF (Exchange-Traded Fund). These funds allow the investors to gamble on the Bitcoin price without needing to have the actual Bitcoin.
In the year 2024, SEC in the United States of America passed permits for Bitcoin ETFs; this was instrumental to allowing people to invest in bitcoins through the Exchange Traded Funds. This has made a significant change on the way cryptocurrencies are viewed and used especially in legal and financial realms.
Blockchain’s Role in Legal Services
Interestingly, the system that supports cryptocurrencies is also revolutionizing the industries, including legal services. Among the valuable outcomes, it is possible to distinguished the improvement of data security.
Originally, Blockchain is permanent and immutable which implies that it can be used to safely store and protect client’s details and legal documents that are prone to hacks and fraud. Smart contract management is another huge advantage of blockchain systems in today’s scenario.
A smart contract is an automation of a contract where terms of the contract are met through the software’s self-execution ability. Since smart contracts eliminate the third parties like the brokers or the third party administrators, they help lawyers and their clients save time and money.
The benefits of employing smart contracts range from great levels of efficiency into other benefits. Many legal tasks that previously instead of which were followed by a large amount of document record-keeping can be now made more efficient and fewer errors are likely to occur.
Blockchain Beyond Smart Contracts
Apart from smart contracts the use of blockchain technology in the legal profession has many other benefits. For instance, the application of blockchain may be in the area of electronic signatures where it is faster, more secure and cost effective than the traditional forms of signing.
As for Blockchain Signatures, contrary to signature platforms signatures, Blockchain Signatures are based on mathematical fingerprints which cannot be imitated easily if at all. There is another crucial function of blockchain in the legal industry which is to enhance the process of establishing the ownership and transfer of products in cases of legal proceedings.
The term ‘chain of custody’ has criminal investigations connotations and means the processes of handling any evidence from the time it is collected until offered in trial. Legal scholars use the blockchain to record every step of the chain so that they produce an immutable record which preserves any evidence from the tampering and the results are made checked.
This is very important to ensure that there is a clear stand is taken in addressing the legal issues involved. Another area that has been affected by changes in operations is intellectual property through the use of Non-Fungible Tokens (NFTs).
The art pieces or whatever content is created is easily registered and timestamp on the block chain by the artists and hence giving one an incontrovertible right of ownership. This development has proved to be very helpful especially to artists, writers and any other content creator who wants to protect their work online.
Looking Ahead: The Future of Fintech in Law
The integration of Fintech in the legal sector is not very short-term or a trend but it is the initial step towards change.
Blockchain and cryptocurrency usage and smart contracts will further increase as many companies realize the benefits that these new technologies will bring to their operation.
The consumer’s expectations and the gradual penetration of technologies require changes to the legal industry, and fintech is ahead of this change. Hence, the continuous evolution of the legal industry will enable the professional to provide more efficient, effective and low-cost legal advice to assist clients in the market.
Source: Binance.com
