Authored By: Thabiso Mtolo
University of Zululand
Abstract:
“This article explores the relationship between blockchain technology, smart contracts, and South African contract law. While traditional principles such as consensus, legality, and capacity continue to guide contract formation, existing statutes like the Electronic Communications and Transactions Act (ECTA) and the Protection of Personal Information Act (POPIA) only partially accommodate digital agreements. The absence of explicit recognition of blockchain-based contracts creates legal uncertainty and limits their adoption. Judicial interpretation may provide short-term solutions by emphasizing the substance of smart contracts mutual consent, performance, and fairness over their technological form. However, long-term certainty requires legislative reform to align with constitutional values of fairness, equality, and access to justice. Comparative examples from the European Union and Singapore demonstrate that blockchain-friendly regulation is feasible. With appropriate reforms, South Africa can strengthen consumer protection, build trust, and harness smart contracts to promote efficient, transparent, and inclusive economic growth”.
Introduction
In South Africa, where poverty, inequality, and crime remain deeply entrenched, questions of justice, fairness, and accountability are not merely abstract they shape the daily lives of millions.1 At the same time, the country is witnessing rapid digital transformation: from the rise of cryptocurrency trading on platforms like Luno,2to the government’s push for a Fourth Industrial Revolution (4IR) strategy.3
Traditionally, contracts are governed by principles of consensus, legality, capacity, and fairness values reinforced by the 1996 Constitution and statutes such as the National Credit Act and the Alienation of Land Act. Yet, the emergence of blockchain-based “smart contracts “self-executing agreements written in computer code poses new challenges.4 Can an automated agreement coded by a programmer in Cape Town, but executed on a blockchain node in Singapore, be reconciled with the constitutional demand for fairness articulated in “Barkhuizen v Napier”?5
This tension reveals a grey area in South African law. On the one hand, smart contracts promise efficiency, transparency, and lower costs features attractive in a country battling corruption and inefficiency in public and private sectors.6 On the other hand, they raise complex questions about interpretation, consent, capacity, and remedies in cases of breach issues central to the lived realities of South Africans who often face predatory contracts or digital fraud.7
This article argues that while smart contracts hold enormous potential to modernise South African law and promote economic inclusion, their enforceability will depend on aligning them with constitutional values, statutory protections, and judicial oversight. By examining South African law in context, this article aims to explore whether technology can truly bridge inequality or whether it risks creating new forms of exclusion.
Research Methodology:
In approaching this article, I relied on a mix of doctrinal, analytical, and comparative methods. The doctrinal work is grounded in South African legal sources most notably the Constitution, the Electronic Communications and Transactions Act 25 of 2002 (ECTA), and long-established principles of contract law.8 These provide the legal foundation on which any discussion of smart contracts in South Africa must begin.
The analytical strand of the research considers whether the current legal framework can realistically cope with the challenges posed by smart contracts. For instance, while ECTA recognises electronic signatures,9it does not make it clear whether a piece of blockchain code operating in a decentralised environment would be treated as a binding agreement in the eyes of South African courts. This gap highlights where uncertainty lies.
The comparative method draws on experiences from other jurisdictions particularly the UK, EU, and US which have already started testing the enforceability of smart contracts.10 Comparing their approaches with South Africa’s context, where financial exclusion and digital literacy remain pressing issues, allows the article to weigh both the risks and opportunities of adopting such technology locally.11
Legal Framework:
In South Africa, the law of contract whether dealing with conventional agreements or newer technological forms draws its authority from both common law and legislation. The Constitution of the Republic of South Africa, 1996, provides the starting point. Section 22 guarantees the right to freely choose one’s trade, occupation, or profession, while section 34 ensures access to courts for the resolution of disputes.12
On the statutory side, the Electronic Communications and Transactions Act 25 of 2002 (ECTA) remains a cornerstone. It affirms the validity of electronic records, transactions, and signatures. Section 13, for example, equates electronic signatures with handwritten ones, provided they satisfy prescribed standards of reliability.13 Yet, despite its progressive design at the time, ECTA is silent on blockchain-based agreements.
The common law of contract still governs the essentials of validity: consensus, legality, contractual capacity, and the possibility of performance.14 These requirements apply regardless of format. A critical question therefore arises can blockchain code replicate the certainty and mutual assent demanded by traditional doctrine?
Other statutes may also become relevant depending on the application of smart contracts. The Protection of Personal Information Act 4 of 2013 (POPIA) has implications where personal data is processed,15 while the Financial Sector Regulation Act 9 of 2017 imposes compliance duties on fintech activity within regulated markets.
Judicial Interpretation:
South African courts have only begun to confront the challenges posed by blockchain and smart contracts. Although direct case law is still limited, judicial interpretation in this area has drawn heavily on established principles of contract law, constitutional values, and comparative examples from other jurisdictions16
A useful starting point is the case of “Barkhuizen v Napier 2007 (5) SA 323 (CC)”, where the Constitutional Court recognised the principle of freedom of contract but stressed that autonomy is not absolute. The court held that contracts must also reflect fairness, justice, and public policy informed by the Constitution.17 Applied to blockchain agreements, this reasoning suggests that while parties may freely encode terms in a smart contract, those terms will still be scrutinised against constitutional standards.
Subsequent jurisprudence reinforced this balance. For instance, in cases following Barkhuizen, courts struck down clauses that unfairly restricted weaker parties, such as harsh time-limitation provisions. By analogy, if a low-income user agreed to a blockchain-based service contract that automatically deducted funds without meaningful opportunity to contest charges, a court would likely test whether the arrangement was substantively fair.
The principle of reciprocity, central in Botha v Rich NO 2014 (4) SA 124 (CC), provides another important lesson. In that matter, the Constitutional Court held that fairness requires consideration of both parties’ interests, particularly where vulnerable individuals are involved.18 Translated into a blockchain context, a rental smart contract that automatically locks tenants out after a late payment could be challenged as disproportionately harsh.
Comparative experience strengthens this line of reasoning. In Quoine Pte Ltd v B2C2 Ltd [2020] SGCA(I) 02 (Singapore), the court addressed whether transactions executed through flawed code should stand. The decision confirmed that while contracts may operate digitally, principles like fairness, good faith, and knowledge remain decisive.19 South African courts would likely follow this pragmatic approach, focusing on substance rather than the technical form of the code.
Critical Analysis:
Ambiguity in legal recognition of smart contracts
The Electronic Communications and Transactions Act 25 of 2002 (ECTA) validates electronic signatures and data messages, but it was drafted long before blockchain technology became prominent. As a result, the Act does not directly address whether self-executing smart contracts meet the same requirements of validity, particularly when disputes involve issues of consent, mistake, or misrepresentation.
Enforcement and fairness concerns
Traditional contracts allow judicial intervention where terms are unfair, as demonstrated in Barkhuizen v Napier and Botha v Rich NO. Smart contracts, however, operate differently: once the code is executed, the outcome is usually irreversible. This rigidity creates difficulties for fairness enforcement. For example, if a tenant pays rent late and is automatically locked out of their home by a rental smart contract, the action may later be judged unconstitutional for infringing housing rights.20
Evidentiary and jurisdictional problems
Because blockchain transactions are decentralised, evidentiary questions arise about how courts will authenticate blockchain records. Furthermore, jurisdictional challenges occur when disputes involve networks of nodes that operate globally. South African courts may need to adapt the Law of Evidence Amendment Act to accommodate blockchain records as reliable and admissible proof.21
Lessons from comparative jurisdictions
Other legal systems are moving faster to clarify these issues. In the United Kingdom, the Law Commission (2022) confirmed that smart contracts can be enforced under English contract law and called for clearer interpretive guidelines.22 Similarly, in the United States, Arizona amended its laws to explicitly recognise blockchain-based signatures and contracts. South Africa, however, has not taken comparable steps, leaving the country behind in terms of legal certainty and investor confidence.
Regulatory uncertainty
The absence of explicit legislation means that blockchain participants rely heavily on private arrangements, which may produce outcomes that conflict with constitutional values such as dignity, fairness, and access to justice. This legal vacuum increases the likelihood of disputes, forcing South African courts to stretch traditional legal doctrines to address technological realities.23
Recent Developments:
The South African Reserve Bank (SARB), through its Fintech Unit, has played a leading role in exploring blockchain applications. Its flagship experiment, Project Khokha, conducted in partnership with major commercial banks, tested the use of distributed ledger technology for interbank settlement.24 Although the initiative was limited to the financial sector, it signalled an institutional willingness to experiment with blockchain tools and raised the possibility that future regulatory guidance could extend to smart contracts more broadly.
Regulatory bodies have also begun addressing crypto-assets directly. In 2022, the Financial Sector Conduct Authority (FSCA) classified crypto-assets as a “financial product” under the Financial Advisory and Intermediary Services Act 37 of 2002 (FAIS).25 This classification primarily targeted service providers in the crypto industry, but it marked an important acknowledgment that blockchain-related activities require legal oversight.
Policy discussions are also gaining momentum. The Department of Communications and Digital Technologies has initiated consultations on updating South Africa’s digital policy framework to reflect emerging technologies.26 Reports from the Intergovernmental Fintech Working Group (IFWG) and debates in Parliament have stressed the need for legal certainty, yet these discussions have not yet translated into binding legislation.27
Reactions outside government have been divided. Technology companies and financial innovators have welcomed SARB’s openness to experimentation, seeing it as a step toward positioning South Africa in the global digital economy. In contrast, civil society organisations and legal analysts warn that the absence of a clear statutory framework exposes consumers and weaker contractual parties to potential exploitation.28 Media commentary reflects this tension, often highlighting both the opportunities for innovation and the risks of unregulated blockchain use.
Compared with other jurisdictions, South Africa is moving cautiously. The European Union, for example, has introduced the Markets in Crypto-Assets Regulation (MiCA), which provides a comprehensive framework for blockchain transactions.29 By contrast, South Africa’s incremental and consultative approach reflects its emphasis on constitutional safeguards and its historically conservative stance in financial regulation.30
Recommendations and Way Forward
South Africa is at a crossroads. While blockchain and smart contracts hold great promise, the current legal framework offers only partial answers. Financial regulations such as those applied to crypto-assets provide some oversight, but they do not deal directly with how smart contracts fit into the law of obligations. This gap leaves parties uncertain about whether their blockchain-based agreements would stand in court, and it risks uneven outcomes.31
Enacting Clear Statutory Recognition
One option is for Parliament to amend the Electronic Communications and Transactions Act 25 of 2002 (ECTA) to speak directly to smart contracts. Just as ECTA validated electronic signatures, a new amendment could recognise blockchain mechanisms like cryptographic hashes as evidence of authenticity.32 This would not replace the normal requirements of contract law (offer, acceptance, intention, certainty), but it would reassure businesses and individuals that agreements concluded on blockchain platforms are enforceable.
Expanding Sandboxes and Pilot Projects
The South African Reserve Bank (SARB) and the Financial Sector Conduct Authority (FSCA) have already shown a willingness to experiment (e.g., Project Khokha). Building on this, regulators could widen sandboxes to cover areas outside finance, such as property leasing or supply-chain management.33 These sectors often face inefficiency or corruption, making them natural candidates for transparent blockchain solutions.
The Judiciary’s Role in Bridging Gaps
Until Parliament acts, the courts remain the key actors. Judicial interpretation can adapt traditional principles to modern technologies. Courts may, for instance, uphold a smart contract where mutual consent and performance are clear, even if the technology is unfamiliar.34 South African courts have a history of pragmatically recognising evolving practices. By doing so again, the judiciary can bridge the gap between innovation and statutory delay.
Strengthening Consumer Protection
South Africa’s socio-economic context cannot be ignored. Many consumers are vulnerable to exploitation, especially in digital environments they do not fully understand. Safeguards could include mandatory disclosure of contract terms in plain language, educational outreach, or specialised tribunals for blockchain-related disputes.35
Borrowing from Abroad, But Cautiously
Comparative borrowing is useful but must be locally sensitive. The EU’s MiCA Regulation and Singapore’s guidelines offer strong models, but they reflect different economic and social conditions.36 Simply copying them would not align with South Africa’s constitutional values of fairness, access to justice, and socio-economic inclusivity. Reforms must be adapted to ensure that technology narrows, rather than widens, the digital divide.
Building Public Confidence
Finally, trust is essential. After a series of high-profile scams, many South Africans remain sceptical of blockchain. Regulatory reforms must therefore emphasize transparency for instance, requiring platforms to keep accessible audit trails or appointing independent oversight bodies in sensitive industries.37 Public confidence will only grow if users believe the system is both safe and accountable.
Conclusion:
Blockchain technology and smart contracts have the potential to transform the way agreements are concluded, performed, and enforced. However, South Africa’s legal framework has yet to fully adapt to this development. While the foundational principles of contract law remain applicable, the lack of express recognition of blockchain-based agreements creates uncertainty that discourages widespread adoption.38
The courts can play a vital role by interpreting existing principles in a way that emphasises substance over form. Where a blockchain contract demonstrates clear mutual consent, performance, and fairness, the judiciary could affirm its enforceability even in the absence of legislative reform.39 This pragmatic approach would mirror how South African courts have historically adapted the law to meet new realities.
Ultimately, smart contracts should not be viewed merely as a technological novelty. Properly regulated, they can serve as a practical mechanism for promoting faster, cheaper, and more transparent transactions. With coordinated reforms by Parliament, regulators, and the courts, South Africa can position itself as a leader in responsibly harnessing blockchain technology to foster inclusive and sustainable economic growth.40
Bibliography:
Cases
Airports Company South Africa v Big Five Duty Free (Pty) Ltd 2019 (5) SA 1 (SCA)
Barkhuizen v Napier 2007 (5) SA 323 (CC)
Botha v Rich NO 2014 (4) SA 124 (CC)
Brisley v Drotsky 2002 (4) SA 1 (SCA)
Government of the Republic of South Africa v Grootboom 2001 (1) SA 46 (CC)
Maphango v Aengus Lifestyle Properties (Pty) Ltd 2012 (3) SA 531 (CC)
Quoine Pte Ltd v B2C2 Ltd [2020] SGCA(I) 02
SA Sentrale Ko-op Graanmaatskappy Bpk v Shifren 1964 (4) SA 760 (A)
Legislation and Official Publications
Arizona Revised Statutes, Title 44, Chapter 26, § 44-7061 (2017)
Constitution of the Republic of South Africa, 1996
Electronic Communications and Transactions Act 25 of 2002
Financial Advisory and Intermediary Services Act 37 of 2002
Financial Sector Regulation Act 9 of 2017
Law of Evidence Amendment Act 45 of 1988
National Credit Act 34 of 2005
Protection of Personal Information Act 4 of 2013
Alienation of Land Act 68 of 1981
Department of Communications and Digital Technologies, South Africa’s National Fourth Industrial Revolution (4IR) Policy (Policy Paper, 2020)
Department of Communications and Digital Technologies, South Africa’s National Data and Cloud Policy (Government Gazette No. 45866, 15 April 2022)
Financial Sector Conduct Authority, General Notice 1350 of 2022: Declaration of a Crypto Asset as a Financial Product under the Financial Advisory and Intermediary Services Act (GG 46776, 19 October 2022)
Intergovernmental Fintech Working Group (IFWG), Crypto Assets Position Paper (2021) National Consumer Commission, Guidelines for Fair Business Practices in the Digital Economy (2023)
Regulation (EU) 2023/1114 of the European Parliament and of the Council of 31 May 2023 on markets in crypto assets [2023] OJ L150/1 (MiCA Regulation)
South African Law Reform Commission, Review of the Electronic Communications and Transactions Act 25 of 2002 (Issue Paper 44, 2022)
South African Reserve Bank, Financial Stability Review (Second Issue, SARB 2023)
South African Reserve Bank, Project Khokha 2: Exploring the Use of Distributed Ledger Technology for Interbank Payments and Settlements (Report, SARB 2022)
Books
Christie R H and Bradfield G B, Christie’s The Law of Contract in South Africa (7th edn, LexisNexis 2016) De Filippi P and Wright A, Blockchain and the Law: The Rule of Code (Harvard UP 2018) Millard D, ‘Smart Contracts: A South African Perspective’ in The Future of Law (Juta 2021) Twining W, General Jurisprudence: Understanding Law from a Global Perspective (CUP 2009)
Journal Articles
Boezaart T, ‘The South African Law of Contract in the Digital Age: Quo Vadis?’ (2020) 83 THRHR 447
Osterrieder I, ‘The Application of Traditional Contract Law Principles to Smart Contracts’ (2019) 16 European Review of Private Law 753
Van der Merwe M, ‘Blockchain Technology and the Law of Evidence: A South African Perspective’ (2021) 24 PER 1
Van der Merwe S, ‘Electronic Contracts and the Law of Contract in South Africa’ [2019] 82 THRHR 600
Reports and News Articles
‘Addressing the Regulatory Gaps in the Cryptocurrency and Blockchain Industry’ Debates of the National Assembly (5 September 2023) (Speech by Dr M Cardo)‘Luno Gains Ground in SA as Crypto Trading Volumes Soar’ Business Day (Johannesburg, 15 November 2022) <https://www.businesslive.co.za/bd/companies/2022-11-15-luno-gains-ground-in-sa-as-crypto-trading-volumes soar/> accessed 15 January 2024
‘SA’s Crypto Conundrum: Innovation vs Regulation’ Mail & Guardian (Johannesburg, 12 January 2024) <https://mg.co.za/business/2024-01-12-sas-crypto-conundrum-innovation-vs-regulation/> accessed 20 February 2024
Law Commission, Smart Contracts (Analysis Paper, 2022) <https://www.lawcom.gov.uk/project/smart-contracts/> accessed 20 February 2024
Monetary Authority of Singapore, A Guide to Digital Token Offerings (2019)
Open Secrets, The Crypto Craze: Consumer Risks and Regulatory Gaps in South Africa (2023) Statistics South Africa, General Household Survey 2021 (Statistical Release P0318, 2022) Transparency International, Corruption Perceptions Index 2023 (Report, 2023)
World Bank, Inequality in Southern Africa: An Assessment of the Southern African Customs Union (Report, 2022)
Other
UK Jurisdiction Taskforce, Legal Statement on Cryptoassets and Smart Contracts (LawTech Delivery Panel 2019) <https://35z8e83m1ih83drye280o9d1-wpengine.netdna-ssl.com/wp content/uploads/2019/11/6.6056_JO_Cryptocurrencies_Statement_FINAL_WEB_111119-1.pdf> accessed 20 February 2024
1 World Bank, Inequality in Southern Africa: An Assessment of the Southern African Customs Union (Report, 2022) 3-5. This report details the persistent socio-economic challenges, including South Africa having one of the world’s highest Gini coefficients.
2‘Luno Gains Ground in SA as Crypto Trading Volumes Soar’ Business Day (Johannesburg, 15 November 2022) <https://www.businesslive.co.za/bd/companies/2022-11-15-luno-gains-ground-in-sa-as-crypto-trading-volumes-soar/> accessed 15 January 2024.
3 Department of Communications and Digital Technologies, South Africa’s National Fourth Industrial Revolution (4IR) Policy (Policy Paper, 2020) 11-14.
4 Primavera De Filippi and Aaron Wright, Blockchain and the Law: The Rule of Code (Harvard UP 2018) 45-68.
5 Barkhuizen v Napier 2007 (5) SA 323 (CC) [30] (The Constitutional Court held that contractual fairness is a constitutional imperative and that a term which is contrary to public policy is unenforceable).
6 Transparency International, Corruption Perceptions Index 2023 (Report, 2023) ranks South Africa 83rd out of 180 countries, highlighting significant perceptions of public sector corruption.
7 National Credit Regulator, Annual Report 2022/2023 (Report, NCR 2023) 41-43, detailing complaints related to reckless lending and unfair contract terms.
8 This foundational analysis is based on the core principles outlined in the Constitution of the Republic of South Africa, 1996 and the Electronic Communications and Transactions Act 25 of 2002, read alongside the common law framework as stated in SA Sentrale Ko-op Graanmaatskappy Bpk v Shifren 1964 (4) SA 760 (A)
9 Electronic Communications and Transactions Act 25 of 2002, s 13(1)-(4).
10 See, for example, the UK Jurisdiction Taskforce’s legal statement on cryptoassets and smart contracts: Legal Statement on Cryptoassets and Smart Contracts (LawTech Delivery Panel 2019) [200]-[205] <https://35z8e83m1ih83drye280o9d1-wpengine.netdna-ssl.com/wp content/uploads/2019/11/6.6056_JO_Cryptocurrencies_Statement_FINAL_WEB_111119-1.pdf> accessed 20 February 2024. See also the Uniform Electronic Transactions Act (UETA) in the United States
11 Statistics South Africa, General Household Survey 2021 (Statistical Release P0318, 2022) 52-55 details figures on household access to the internet and digital services, highlighting the digital divide.
12 Constitution of the Republic of South Africa, 1996, ss 22 & 34. The Constitutional Court has affirmed that these rights inform the enforcement of contracts; see Barkhuizen v Napier 2007 (5) SA 323 (CC) [30].
13 Electronic Communications and Transactions Act 25 of 2002, s 13(3). This section outlines the criteria for an advanced electronic signature to be deemed reliable.
14 The foundational common law principles are authoritatively set out in R H Christie and G B Bradfield, Christie’s The Law of Contract in South Africa (7th edn, LexisNexis 2016) 18-21.
15Protection of Personal Information Act 4 of 2013, s 1 defines “processing” widely to include almost any operation performed on personal data which would include data stored or transmitted via a blockchain.,
16 For a general overview of the judicial approach to new technologies, see I Osterrieder, ‘The Application of Traditional Contract Law Principles
to Smart Contracts’ (2019) 16 European Review of Private Law 753, 755-760, who argues that courts generally adapt existing principles rather than creating entirely new ones.
17 Barkhuizen v Napier 2007 (5) SA 323 (CC) [30]. The Court stated: “Public policy, informed by the Constitution, requires that contractual autonomy should be respected, but not elevated to an absoluteness that overshadows the equally important public policy concern that freedom of contract should be exercised in a manner that is fair and not unduly harsh.”
18Botha v Rich NO 2014 (4) SA 124 (CC) [25]. The Court emphasised that “the principle of reciprocity lies at the heart of the law of contract and demands that the obligations imposed on the parties are fair and balanced.”
19 Quoine Pte Ltd v B2C2 Ltd [2020] SGCA(I) 02 [144]-[145]. The Singapore International Commercial Court (as it then was) held that common law contractual principles, including those relating to mistake, apply to smart contracts and that the “code is law” mantra is not an absolute defence.
20 This hypothetical is grounded in the constitutional principle established in Government of the Republic of South Africa v Grootboom 2001 (1) SA 46 (CC) [95], which affirmed the state’s positive obligation to provide access to adequate housing.
21The Law of Evidence Amendment Act 45 of 1988, s 3, allows for the admission of documentary evidence, but its application to immutable but anonymous blockchain records remains untested. For a discussion on the evidentiary challenges, see M van der Merwe, ‘Blockchain Technology and the Law of Evidence: A South African Perspective’ (2021) 24 PER 1, 15-18.
22 Law Commission, Smart Contracts (Analysis Paper, 2022) [4.45]-[4.50] <https://www.lawcom.gov.uk/project/smart-contracts/> accessed 20 February 2024.
23 This concern is echoed by the South African Law Reform Commission in its ongoing review of ECTA. See South African Law Reform Commission, Review of the Electronic Communications and Transactions Act 25 of 2002 (Issue Paper 44, 2022) 89.
24 South African Reserve Bank, Project Khokha 2: Exploring the Use of Distributed Ledger Technology for Interbank Payments and Settlements (Report, SARB 2022) 5-8.
25 Financial Sector Conduct Authority, General Notice 1350 of 2022: Declaration of a Crypto Asset as a Financial Product under the Financial Advisory and Intermediary Services Act (GG 46776, 19 October 2022).
26Department of Communications and Digital Technologies, South Africa’s National Data and Cloud Policy (Government Gazette No. 45866, 15 April 2022) Preamble, paras 4.2.3-4.2.5.
27 See, for example, the discussion in Parliament: ‘Addressing the Regulatory Gaps in the Cryptocurrency and Blockchain Industry’ Debates of the National Assembly (5 September 2023) (Speech by Dr M Cardo).
28 This concern is articulated by the NGO, Open Secrets, in their report: The Crypto Craze: Consumer Risks and Regulatory Gaps in South Africa (2023) 22-25.
29 Regulation (EU) 2023/1114 of the European Parliament and of the Council of 31 May 2023 on markets in crypto-assets [2023] OJ L150/1 (MiCA Regulation).
30 This cautious approach is consistent with the Reserve Bank’s historical mandate. See South African Reserve Bank, Financial Stability Review (Second Issue, SARB 2023) 54-56.
31 This call for proactive reform is echoed by the South African Law Reform Commission in its ongoing review. See South African Law Reform Commission, Review of the Electronic Communications and Transactions Act 25 of 2002 (Issue Paper 44, 2022) 102.
32 Such an amendment could be modelled on the US State of Arizona’s approach. See Arizona Revised Statutes, Title 44, Chapter 26, § 44-7061 (2017), which recognises blockchain signatures and smart contracts.
33 The potential for regulatory sandboxes beyond finance is discussed in Intergovernmental Fintech Working Group (IFWG), Crypto Assets Position Paper (2021) 24-25.
34 This judicial capacity for adaptation is noted by the Supreme Court of Appeal in Airports Company South Africa v Big Five Duty Free (Pty) Ltd 2019 (5) SA 1 (SCA) [28], which emphasised that the law must respond to commercial reality.
35These consumer protection measures are recommended by the National Consumer Commission in its Guidelines for Fair Business Practices in the Digital Economy (2023) paras 7.2-7.5.
36Regulation (EU) 2023/1114 of the European Parliament and of the Council of 31 May 2023 on markets in crypto-assets [2023] OJ L150/1 (MiCA Regulation); Monetary Authority of Singapore, A Guide to Digital Token Offerings (2019) 4-6.
37The importance of transparency and auditability is a key finding in Open Secrets, The Crypto Craze: Consumer Risks and Regulatory Gaps in South Africa (2023) 30.
38This core conclusion regarding the tension between potential and legal uncertainty is supported by the analysis in T Boezaart, ‘The South African Law of Contract in the Digital Age: Quo Vadis?’ (2020) 83 THRHR 447, 460.
39This judicial role is consistent with the approach advocated by the Supreme Court of Appeal in Brisley v Drotsky 2002 (4) SA 1 (SCA) [94], which confirmed that courts should give effect to the parties’ intentions where possible, while still upholding public policy.
40This forward-looking perspective aligns with the vision set out in the Department of Communications and Digital Technologies, South Africa’s National Fourth Industrial Revolution (4IR) Policy (Policy Paper, 2020) 20-22.
