Research On Legal Issues Of Letter Of Credit Transactions Based On Blockchain

As the "life-blood of international commerce",L/C used to be one of the most important payment methods in the field of international trade.There are two reasons for its declining position in international trade.On the one hand,there are many problems of L/C business,such as rigid mode,complicated procedures and fraud,which cannot be effectively solved.On the other hand,with the progress of The Times,international trade subjects have higher requirements on transaction contents including payment methods.However,L/C is in steady demand in developing countries where trust mechanisms are imperfect.Internationally,with relatively unstable politics and economy,L/C becomes the best choice to avoid risks in developing countries.Domestically,problems such as tight capital flow and unstable cooperative relationship are common,and enterprises need transaction security.L/C is developing towards electronization,which cannot be separated from the progress of information technology.Blockchain,with its characteristics of decentralization and immutability,can solve many problems existing in L/C,such as the Bill of Lading electronic property certificate,electronic record data easy to modify and other problems.In the blockchain environment,the letter of credit transaction has been greatly facilitated.However,at the same time,there are also some legal problems,such as aggravating the diversification of L/C subjects,the imbalance of responsibilities among various subjects,the jurisdiction of related disputes and the application of law.UCP600,eUCP2.0 and other existing international norms can be used for reference,but these legal norms can no longer meet the needs of L/C transaction practice.In the blockchain environment L/C transactions need not only guidance and guarantee,but also regulation and supervision.In this regard,we should combine the development trend of international trade and information technology,and put forward the corresponding legal countermeasures.Since blockchain technology has not been explicitly supported by international norms and national laws,the setters of international norm need to consider providing a legal basis for it to promote the development of L/C transactions.First of all,as a new type of participants in L/C transactions,e-commerce companies have no clear legal status,and their behaviors are not regulated by relevant responsibilities.Secondly,the blockchain bill of lading is waiting for legal support after meeting the functional equivalence with the paper bill of lading.Finally,blockchain should still be under legal and judicial supervision,in which blockchain jurisdiction can be used as a private remedy option for the parties’ autonomy of will.Under the background of "The Belt and Road" in China,the practice cases of L/C transaction based on blockchain are gradually increasing.We should embrace the electronic approach to international trade with an open and inclusive mind,and explore and study relevant systems so as to take a leading position in the world.For blockchain-based L/C,the principle of legislation can be made clear:keep the economy as the center and keep the technology neutral.Then through this principle to guide the improvement of specific legal norms.