Legal risks of tokenization of sovereign debts in BRICS: from commitment theory to blockchain execution

Amid global dedollarization and shifting geoeconomic dynamics, the BRICS countries are exploring alternative mechanisms for sovereign debt issuance and settlement, including tokenization. The use of gold-backed stablecoins – digital tokens collateralized with physical gold and circulating on blockchain platforms – opens the door to automated, transparent models for executing sovereign obligations. However, this model also generates significant legal risks, particularly in cross-border contexts. This article analyzes key challenges arising from the digital execution of obligations, focusing on the conflict between § 307 of the U.S. Uniform Commercial Code (UCC) and Article 1062 of the Russian Civil Code. It identifies jurisdictional, regulatory, arbitral, and sanctions-related risks, stemming from the absence of internationally recognized legal regimes for token-based debt settlement. The article classifies legal scenarios for using goldbacked tokens in sovereign and intergovernmental financing arrangements and evaluates their enforceability across different legal systems. A comparative legal method, formal legal analysis, case studies, and a legal engineering approach are employed to propose a framework for legal harmonization. The conclusion emphasizes the need for establishing a supranational digital arbitration mechanism and a BRICS Model Law on Tokenized Sovereign Obligations. The study highlights the necessity of a comprehensive legal modernization of the law of obligations in light of the rise of smart contracts and digital assets as new forms of sovereign debt execution.