Digital technology-based solutions for enhanced effectiveness of secured transactions law:the road to perfection?

Abstract

This article has two objectives. First, the article examines how the incorporation of specific digital technologies to the different stages of secured transactions could mitigate the imperfections of the secured transactions system and enhance its effectiveness. To begin with, an envisioned integrated ecosystem of smart property and self-executed smart contracts for security agreements could effectively reduce verification and monitoring costs. Next, a fully automatic electronic—maybe, blockchain-based—registry fed by a (IoT) network of interconnected assets would dramatically improve the accuracy of consistently-updated registered information. Furthermore, implanted AI-based solutions could be used to detect changes of circumstances and deviations from agreed provisions. Finally, AI-guided smart contracts could assist in decisionmaking to prevent breaches and automatically enforce remedies.8 Second, given this backdrop, the article focuses on some of the legal implications for secured transactions legal system and assesses whether the current legal framework is prepared to face the challenges inherent to these new technologies, to exploit the multitude of opportunities presented by the technologies, and to manage the involved risks. Alternatively, if the current system is incapable of taking on this challenge, this article will consider an appropriate legal response.