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The rise of a blockchain-based durable medium. Will it revolutionize customer document management?

While blockchain is mainly perceived as technology that is the foundation for known cryptocurrency, the increasing number of uses in various sectors of the economy in Poland, such as use to comply with the legal obligation to provide information on a durable medium, show that it has much greater potential. The President of the Office of Competition and Consumer Protection (UOKiK) has now expressed approval for this practice, opening the way for providers of this technology to devise solutions of this kind and supply them to a broad range of organizations.

In certain cases, under Polish and EU consumer protection laws, banking and telecommunications laws, or laws on payment services as well, a business undertaking is required to provide information on a durable medium. This requirement is intended as a means of protecting rights in a relationship between an organization and a business undertaking, i.e. protect the interests of a disadvantaged party in a transaction (consumer or subscriber). This concerns for example giving notice of changes in payment services provided by banks or of automatic renewal of a telecommunications services agreement.

The forms considered a durable medium are in particular the conventional forms of preserving information, such as on paper, but also saving information on a memory stick or memory card. In an age in which digitalization is universally applied, an increasing number of organizations are wondering what kind of technological solutions can be used as a durable medium in digital transactions while remaining in compliance with the law.

The view in CJEU case law and decisions issued by the President of the Office of Competition and Consumer Protection (UOKiK) is that only solutions that ensure integrity, permanence, and authenticity of transmitted information, and that the stored documentation cannot be deleted, are the acceptable forms of a durable medium. The President of UOKiK has approved the use of blockchain technology solutions to store information, to ensure these features from a technical point of view.

When tools are devised and implemented to serve as a durable medium, the full range of applicable legal requirements must always be accounted for, and this includes interpretations by the CJEU and President of UOKiK. In addition, there are various blockchain technology variations, depending for example on policies on accessing a blockchain network or the manner in which it is managed. Specific models will be suited to a lesser or greater extent to the business undertaking in question depending on the specific nature of a sector, whether it is a regulated entity, or the kind of information it transfers (such as sensitive data).

The issues described above need to be considered as early as possible – when the business undertaking is developing and also selecting the relevant solution, to ensure that it meets the needs of a specific market. Many organizations have already begun using blockchain-based tools to comply with the durable medium requirements, including banking institutions, insurance companies, or e-commerce firms.