RECONCILING LEGAL FRAMEWORKS: ALIGNING SMART CONTRACT INFLEXIBILITY WITH CONSUMER SAFEGUARDING REGULATIONS

Abstract

Self-executing digital agreements automatically implement encoded conditions, providing enhanced efficiency and clarity in online transactions. Yet, their unchangeable nature within distributed ledger systems presents substantial obstacles for safeguarding user interests, particularly following implementation mistakes or financial damages. Conventional judicial mechanisms struggle to offer corrective measures after these agreements complete execution, having been constructed for modifiable transactions requiring human intervention. Although contemporary regulatory developments such as MiCA and platform-specific remedies show advancement, they remain disjointed and inadequate for comprehensive protection. This investigation employs combined methodologies—examining 153 scholarly articles (2018-2025) from Scopus using targeted search criteria, analyzing regulatory approaches across EU, Singapore, and Japan, reviewing technical specifications, and evaluating incident cases. Findings reveal persistent deficiencies where regulations emphasize preliminary disclosure yet achieve minimal (<10%) success in resolving post-implementation conflicts. The research proposes an integrated five-tier model incorporating algorithmic openness, automated safeguards, combined governance structures, responsibility allocation, and international coordination.