US Commodities Regulator Releases Smart Contracts Primer

The primer sets out to define “smart contracts,” including by exploring their history, characteristics, and potential applications that may eventually impact daily life. The primer includes graphics to help explain early self-executing software logic evolving into current smart contract technology – for example, starting with a simple vending machine illustration and then discussing more complex examples, including credit default swap contracts.

As with other areas of innovation, while there are many potential benefits, it is also critical to understand and mitigate risks and challenges; the primer accordingly works through a range of operational, technical, cybersecurity, fraud and manipulation, and governance risks and challenges.

The primer goes on to speak to the CFTC’s role to protect market users and their funds, consumers, and the public.