Does an electronic signature nullify the object aspect of the note and the attribute of the trades?
- According to the Respondent, the promissory note trade can be harmed in light of the possibility of producing many copies of the document file, since the holder can produce one copy, trade it to one person, and then create another copy, and trade it to another person, and so on, in such a way that there will be more than one person that he is properly holding. The Respondent further argues that the absence of a single-value promissory note impairs the possibility of the drawer receiving the promissory note, if it is repaid, or destroying the promissory note, since it is possible that the promissory note has other copies signed with the drawer's electronic signature. In other words, the Respondent expresses concern about the creation of a "note" that is not of a single value, as opposed to the physical world, in which only one original document can exist, and that physical note realizes the objective aspect required for the possibility of its trade.
- In light of the existence of technologies that enable the creation of a digitally signed source file, which is monovalent, immutable, and whose digital path can be traced, this concern of the Respondent is not sufficient to negate the possibility of recognizing the signature of a promissory note electronically. In her article "The Electronic Signature - Reliability vs. Dangerousness", Ravit Weissman describes how it is possible to ensure one-value identification of a signature by means of asymmetric encryption, which is the basis of the digital signature (Mishpat Ve-Army, 15 (5761) 3 (published in the databases)). In the years that have passed since then, other technological platforms have developed, including, among others, blockchain technology, including NFTs, and the use of cryptographic assets, including currencies (the most well-known of which is Bitcoin), where these technologies serve as a platform for carrying out large-scale transactions electronically (Dalit Kan-Dror Feldman, Or Dunkelman, "Blockchain Technology - Not What You Thought: Technological and Legal Considerations", Din Ve-Devarim 16 5783)). The World Trade Organization, which the Respondent mentioned in its response, also insisted on the technological solutions that can serve as a suitable platform for electronic banknotes, since they produce the same reliability as signing a banknote with ink (https://www.tradefinanceglobal.com/legal/digital-negotiable-instruments/, hereinafter: the "WTO Position Paper").
- In other words, in today's technological age, there are technologies available that enable the identification of a file and the transactions carried out in it. In this sense, a digitally signed file can enjoy the same level of reliability as a physical note, both in terms of identifying the seal, in the absence of the possibility of changing the original file, and even in transferring it from one to another in the online world. Of course, the transition to the digital world is not without risks, both in relation to the realization of the purpose of banknote law (such as the concern expressed by the Respondent in creating a note that is not uniformly equivalent), and general risks stemming from the transition to the digital world (such as cyberattacks), but to which there are many available technological solutions. Needless to say, the physical world of banknote law is also not without risks, such as forgery, loss of the banknote, etc., and these are not necessarily less than the risks that exist in the digital world. Just as banknote law has dealt over the years with the risks that exist in the physical world regarding the reliability or loss of a banknote, it is possible to formulate technological solutions to the risks that arise from the recognition of signing a note electronically.
In summary, where there are currently technologies that enable the production of a promissory note whose identification and route are of the same value, the Respondent's arguments in this matter do not determine that it is not possible to sign a promissory note electronically, but rather it is only necessary to determine the appropriate technological arrangements.