Data Sovereignty In A Borderless Blockchain Era: Reconciling Privacy Regimes With Decentralised Governance Principles
- IJLLR Journal
- Jun 2
- 2 min read
Raja Lakshmi R, Amity University, Bengaluru
ABSTRACT
The classical structures of data sovereignty based on the identifiable nature of those who exercise authority, as well as the accountability hierarchical framework, are essentially incompatible with the borderless blockchain design that decentrally spreads authority algorithmically across permissionless networks. This paper exposes structural deficiencies by comparing and contrasting Estonia with its KSI-grounded e-Residency, the UAE with its VARA process of hybrid licensing and India with its PMLA application of extraterritoriality and asserts that to tackle the transnational protocols with no identifiable acting entity is to lack capability to act at all.
The paper innovates the concept of protocol sovereignty and makes smart contracts legally cognisant collective data subject entities of governance. Constitutional compliance encoding, polycentric oracle networks and dynamic liability pools are three institutional innovations through which GDPR Article 5 can be operationalised in a constitutional manner through immutable governance constraints, as an aggregation of threshold-signed attestations across sets of validators, and as a reconciliation system in line with the economic incentives of stakeholder groups through stake-weighted slashing.
This has a borderless system that fulfills substantive privacy protection data minimisation, purpose limitation, erasure rights through cryptographic verification instead of centralised attribution and retains decentralised autonomy. The comparative superiority occurs on national models: Estonia assumes sovereign infrastructure; UAE implements licensing arbitrage; India aims at unenforceable activities.
Protocol sovereignty replaces adversarial regulation with symbiotic verification ecosystems, which is effective in solving the legitimacy paradox, in which compliance compromises autonomy and governance escapes accountability. The necessary paradigm shift towards controlling data in permissionless eras is recognising protocols as sovereign by the sovereign of private international law.
Keywords: Data sovereignty, Borderless blockchain, Privacy, Protection, Accountability.
