Blockchain, Tokenization, and Digital Contracts: The New Era of Law

Jean Carlo A. Núñez A.
Aug 28
5 min read

How these technologies transform rights into tangible value and streamline transactions with legal certainty.

Introduction

Digital transformation is no longer just about "using less paper." Today, we can issue, transfer, and prove rights directly in digital environments with the same—or greater—security than traditional processes. Three elements make this possible: blockchain , tokenization , and digital contracts . At Aequitas Estudio Jurídico, we use them to enable individuals and businesses to operate with agility, transparency, and legal support.

Essential Glossary

Blockchain : A distributed and immutable record where each transaction is chained together with cryptographic seals and a verifiable timestamp.
Hash : A digital fingerprint (alphanumeric string) that identifies a file or transaction. Minor changes generate a distinct hash; useful as proof of integrity .
Timestamp : Evidence of the exact moment a piece of data/contract existed. It is recorded on the blockchain along with the transaction.
Token : A digital unit that represents a right (ownership, credit, use, royalty) or an asset in a blockchain network.
Tokenization : Process of converting a right/asset into tradable tokens , with the possibility of dividing ownership or economic flows.
Security token : A token intended for investment purposes (economic/political rights; expected return). It may be subject to securities regulations and require registration or exemptions.
Utility token : A token that grants use/access to a service or platform, without promising financial returns. However, it requires a case-by-case analysis.
Digital contracts : Agreements signed electronically (simple or qualified ). They are legally valid if they meet formal and consent requirements.
Qualified electronic signature : A signature based on a certificate and secure creation device; it provides a greater presumption of authenticity and integrity .
Smart contract : Code that automates clauses (e.g., releasing a token upon payment confirmation). It does not replace the legal contract; it executes it .
Legal precedence clause : Stipulates that, in the event of a discrepancy between the contract and the smart contract, the contract prevails ; it prevents a bug from governing the relationship.
Oracle : A service that provides real-world data to the smart contract (rates, dates, milestones). This is a critical trust point and must be audited.
Escrow : A neutral third party or technical mechanism that holds funds/tokens until conditions are met.
Wallet : Software or device that manages keys to sign transactions.
- Custodial : a third party holds the keys.
- Non-custodial : the user controls his or her keys (more autonomy, more responsibility).
Gas fees : Network fees for executing transactions/smart contracts.
Whitelist/Allowlist : List of addresses authorized to buy/receive tokens (useful in private offerings and KYC/AML compliance).
KYC/AML : Know Your Customer/Anti-Money Laundering. A set of legal processes for identifying and monitoring risks when issuing or intermediating tokens.
Terms of Issue : Document that defines what rights the token incorporates, benefits, risks, transfer restrictions and governance.
Backing Trust : A structure where a trustee holds the underlying asset of the token; it provides security and clear rules for holders.
On-chain governance : Voting mechanisms and decisions recorded on the blockchain (e.g., policy changes, benefit distribution)

1) Blockchain, in simple words

Think of a ledger shared by many computers. Each "entry" is cryptographically sealed and dated. This provides:

Integrity: If someone changes data, the entire network detects it.
Traceability: every movement leaves a verifiable trace.
Transparency: it is possible to verify what happened and when.

For law, blockchain is a collective digital notary that strengthens integrity proof and time-stamps for contracts and documents.

2) Tokenization: from physical asset to enforceable digital right

Tokenization is to represent a right (ownership, credit, participation, use) as digital units that can be easily transferred.

To make it work well, we align three layers:

Technological: how tokens are issued and transferred (smart contracts and chosen network).
Economic: what the holder receives (income, dividends, use, discounts) and how it is calculated.
Legal: What rights the token incorporates and how it is enforced (contract, statutes or trust, remedies and jurisdiction).

Key idea: Technology without a clear legal design is just code. The value lies in the token representing a real, enforceable right .

3) Digital and smart contracts

Digital contract: the same as always, signed electronically. We define when a simple electronic signature is sufficient and when a qualified electronic signature is appropriate to reinforce authenticity and integrity.
Smart contract: Code that automatically executes clauses (e.g., transferring a token when a payment is credited). It doesn't replace a legal contract; it complements it .

Essential best practice: Include a legal precedence clause (“if there is a discrepancy between the smart contract and this contract, this contract prevails”) and a clear dispute resolution mechanism.

4) Frequent use cases

Pre-sale real estate: tokenized economic shares backed by bylaws or trust; transparent distribution of profits.
Factoring/Accounts Receivable: Tokenized flows traded at a discount to obtain liquidity.
Intellectual property royalties: automatic and traceable distribution of revenue from music, software, or brands.
Loyalty programs and sustainability credits: issuance and redemption with verifiable rules.
Corporate governance: voting and time-stamped recording of agreements.

5) Benefits and limits (the honest)

Benefits:

More agile and secure processes .
Transparency and traceability for audits.
Access to fractional investments and new sources of financing.

Limits and care:

Correct regulatory classification (not every token is a “security,” but some are).
Data protection and KYC/AML when handling funds or identification.
Cybersecurity : smart contract audits and key management.
Clear contracts on remedies for technical failures or non-compliance.

6) How Aequitas accompanies you (brief methodology)

Diagnosis of the asset or project and objectives.
Legal design of the token (ownership, credit, use, royalty) and documentation.
Structure : framework contracts, articles of association/trusts and Terms of Issue.
Technology : coordination of smart contracts, testing and evidentiary traceability.
Compliance : data privacy, KYC/AML and marketing criteria.
Operations and defense : governance, reporting, benefit distribution, and claims support.

Frequently Asked Questions

Do I need to know anything about crypto to use this? No. We aim to make it as simple as signing a contract or purchasing a stake; we handle the technical side.

Is it legal? Yes, as long as the project is anchored in recognized rights, valid contracts, and complies with applicable regulations. We evaluate each case.

Are all tokens "securities"? No. It depends on the economic and legal content. If there is an expectation of return for a third party's efforts, it could be a security and require special rules.

Which blockchain do you use? The one that best suits your needs (costs, security, compatibility). We've documented your choice.

What happens if there's a smart contract failure? The legal contract defines the solution (reversion, compensation, kill switch ) and the dispute resolution mechanism.

Can I sell my token to third parties? This depends on the offering restrictions (public/private), jurisdiction, and the buyer's KYC requirements.

Blockchain, tokenization, and digital contracts are not a fad: they're the new infrastructure of trust . Law—properly applied—is what turns this technology into real value for people and businesses.

Let's talk! We'll turn your rights into enforceable digital assets with legal certainty.