crypto-news-flash.com
- Paraguay launches Blockchain Chamber, promoting sovereign blockchain innovation for government, finance, commerce, civil, and military applications.
- Legaledger, built on Hyperledger and Besu, eliminates transaction gas fees for military and legal operations under law 6.822/21.
Paraguay has taken a significant step in the blockchain arena by establishing the Paraguayan Blockchain Chamber, aimed at fostering financial innovation on a sovereign blockchain. The chamber’s spokesperson and director, Ricardo Prieto, discussed the initiative’s main focus: developing blockchain solutions for both public and private sectors, including government, finance, commerce, civil, and military ecosystems.
The project, named Legaledger, is built on the Hyperledger and Besu platforms, marking it as the world’s first third-generation blockchain network with national sovereignty. It uniquely features an exemption from gas fees for transactions involving military and legal security, in accordance with Paraguayan digital law 6.822/21.
Prieto highlighted Legaledger’s innovative fractal architecture design, which is the first to employ a dual blockchain mechanism (Hyperledger Fabric + Besu) and has the capability for regional and global replication.
“The Blockchain Network has an innovative fractal architecture design, the first with a double blockchain mechanism (Hyperledger Fabric + Besu) and regional and global replication capacity, thus achieving frictionless interoperability between all countries,” the director explained.
This design facilitates seamless interoperability across countries. He referenced a recent report from the Bank for International Settlements (BIS) on the risks and uncertainties associated with Distributed Ledger Technology (DLT), emphasizing the challenge banks face in conducting due diligence and supervision due to reliance on third-party blockchains. The BIS report suggests operating with sovereign blockchain networks to provide legal security within a country.
In 2021, Paraguay enacted Law No. 6.822/21 concerning trust services for electronic transactions, electronic documents, and transferable electronic documents – referred to as the Second Floor Digital Law.
“With the Law, we began to design Legaledger (powered by Hyperledger Foundation + HSM), the first Blockchain Network with national sovereignty, without gas payments, with legal security and with the ability to be replicated in any country in the world with perfect interoperability. Frictions between all participating countries.”
With this law, Paraguay began designing Legaledger, powered by the Hyperledger Foundation and HSM, creating the first blockchain network with national sovereignty that does not require gas payments, offers legal security, and can replicate in any country with perfect interoperability.
“The idea of creating a third-generation blockchain network arises from the need to offer legal security to procedures and transactions carried out on blockchain, something that is practically impossible in global blockchain networks”.
Another benefit of this initiative is the digitization of governmental, civil, and military judicial procedures, and the tokenization of financial assets and real-world assets (RWA), all with absolute legal security. This effectively eliminates identity theft and fraud risks, such as rug pulls, according to Prieto.
Challenges have since the project’s inception in 2021, particularly in tokenizing real estate assets. Discussions with legal advisors revealed potential fraud risks in the approach, highlighting the distinction between possession and ownership.
The public registry, which involves notaries and others to secure transactions on paper, ensures legal security for property ownership, which is not guaranteed by public blockchain tokens alone.
Legaledger is designed to be fractal and can be implemented across companies, conglomerates, states, and countries, maintaining interoperability for what is called sequencing, publishing procedures, or transactions, including international operations.
“No country in the world has the digital law that Paraguay has (Law 6.822/21), however, in many countries apartments and other physical assets were being tokenized that did not actually connect real rights with the tokens created on public blockchains, as we know this is very easy. Each country has its Public Property Registry Agency, in which notaries and others participate, to control the operation that is carried out on paper, to provide legal security regarding the ownership of the object in question.”
To perfect tokenization with legal security, a unique digital law is necessary to allow digitalization of rights over tangible and intangible assets on a sovereign Blockchain network. The resulting tokens must be managed and safeguarded within the network and can be bought, sold, or transferred digitally to anyone or any institution worldwide with legal certainty and without repudiation.
Ultimately, countries implementing a sovereign blockchain network with legal security will become an international digital jurisdiction, meaning the country will achieve a high level of procedure digitalization and asset tokenization within a legal framework and application scope without repudiation, concluded the spokesperson for the Paraguayan Blockchain Chamber.