Smart Contract and (Non-)Law. The case of the Financial Markets

Over the last few years, the term ‘smart contract’, largely coined by technology experts, has also entered the vocabulary of jurists. But what does this expression mean, and why should a jurist reflect on this new conceptual category? In attempting to answer these two fundamental questions, this essay reaches the following conclusions:1) smart contracts are not contracts; 2) the terms ‘smart contract’ and ‘blockchain’ are not interchangeable; 3) the legal problems raised by the smart contract phenomenon require an analytical approach strongly conditioned by the technological ecosystem of reference and must be assessed on a case-by-case basis; 4) for this reason too, the category in question has substantially no legal significance; 5) in any case, precisely because of this technological conditioning, any attempt by jurists to understand and regulate the phenomenon risks becoming obsolete at the very moment in which it is carried out; 6) furthermore, reasons, issues relating to the validity and effectiveness of so-called smart contracts, and those relating to any liability arising from them are normally handled independently by the computer systems concerned with no reference to the institutions and rules of the legal system, which concentrate solely on trying to avoid market distortions. The hypotheses outlined above, which certainly arouse general concern, are confirmed by observing what happens on the financial markets, where algorithmic trading (AT) and high-frequency trading (HFT) have become an established reality over the last few years and are continuing to grow.