Agreed, overall. However, Smart Contracts would at least bind the loan / collateral to the blockchaian it was issued to; [n]whereby making it a legally-enforceable contract between the buyer and the seller[/b] (or two traders, in the case of a barter arrangement).

NXT does start to address this issue with the ability to issue a NXT-backed MS altcoin held in escrow via Smart Contract; based on the defined properties and terms (i.e. block height expiry, etc.) The SAE currently has a relatively primitive Smart Contract available, albeit the true power of Smart Contracts is rumoured to be released around v1.7 or 1.8 of the NXT wallet client.