Paraguay has recently made significant strides in the blockchain sector with the establishment of the Paraguayan Blockchain Chamber, a move aimed at promoting financial innovation on a sovereign blockchain. The chamber, led by Ricardo Prieto, focuses on developing blockchain solutions for various sectors such as government, finance, commerce, civil, and military applications. One of the key projects under this initiative is Legaledger, built on Hyperledger and Besu platforms, making it the world’s first third-generation blockchain network with national sovereignty. This project offers exemption from gas fees for transactions relating to military and legal operations, in compliance with Paraguayan digital law 6.822/21.
Legaledger’s innovative fractal architecture design sets it apart from other blockchain networks, utilizing a dual blockchain mechanism comprising Hyperledger Fabric and Besu. This design allows for regional and global replication, ensuring frictionless interoperability between countries. The aim is to address the challenges highlighted in a recent report from the Bank for International Settlements on the risks associated with Distributed Ledger Technology (DLT) and the need for sovereign blockchain networks to provide legal security within a country. Paraguay’s Law No. 6.822/21, known as the Second Floor Digital Law, paved the way for the development of Legaledger, enabling national sovereignty, legal security, and perfect interoperability with other countries.
The creation of a third-generation blockchain network under Paraguay’s digital law aims to offer legal security for transactions conducted on the blockchain, a feature that is lacking in global blockchain networks. Legaledger not only addresses the need for legal security but also facilitates the digitization of governmental, civil, and military procedures, as well as the tokenization of financial and real-world assets. This initiative helps eliminate risks associated with identity theft and fraud, providing a secure platform for transactions. However, challenges have arisen, particularly in tokenizing real estate assets, with concerns around potential fraud risks and the distinction between possession and ownership.
The implementation of Legaledger across companies, conglomerates, states, and countries is designed to maintain interoperability for various procedures and transactions. The legal security provided by Paraguay’s unique digital law allows for the digitalization of rights over tangible and intangible assets on a sovereign blockchain network, ensuring that resulting tokens are managed and safeguarded within the network. By establishing a sovereign blockchain network with legal security, countries can become international digital jurisdictions, enabling a high level of digitalization and asset tokenization within a legal framework without risk of repudiation. The Paraguayan Blockchain Chamber aims to lead this innovative movement towards a more secure and efficient blockchain ecosystem.
