Public blockchains like Ethereum and Solana are programmable and can automate business processes via smart contracts. An executive order issued on January 23, 2025, titled “Strengthening American Leadership in Digital Financial Technology,” aims to promote U.S. leadership in digital assets and blockchain technology. These developments underscore the growing intersection of governance with automated terms and blockchain-enabled processes.
Smart contracts are programs designed to automate processes that are self-executing, coded in a computer language on a blockchain. They are not the same as written contracts; the data on-chain is cryptographically linked, immutable, and validated by a distributed network prior to being added. A better name for these arrangements might be “automatically executing terms and conditions,” given their rigidity in enforcing predefined instructions.
Advocates point to faster processes and cost reductions as automation reduces manual tasks. The transparency of blockchain, where the data is accessible to all participants, can bolster trust. Yet, because execution relies on code rather than human judgment, smart contracts can be prone to errors if contingencies are not anticipated. Some states have enacted laws recognizing smart contracts in commercial contexts, and federal efforts like the Deploying American Blockchains Act of 2025 seek to promote U.S. leadership in deployment and tokenization, suggesting a hybrid contract combining natural language terms with coded provisions may offer a balanced path.
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