Focus of this chapter is on potential of International Law and Digital Economy. Digitalization plays a huge part in global transactions, but many countries do not have effective regulatory systems to handle cross-border data flows. Along with the growth of digital activities, together with e-commerce, dire need to set strong international legal systems to govern the sector cannot be overemphasized. The existing international laws have failed to keep up with the digital economy, with a patchwork of regulations. Complexities are experienced by global businesses because there are different rules on data protection, digital trade, and the use of technology that are available in various countries and regions. In the interest of fairness, consumer protection, and innovation, there needs to be cooperative global governance. Lacking harmonized regulations, the legal environment becomes disjoint stifles innovation introduces legal challenges and enables malicious entities to exploit loopholes in regulations.