Senate Bill 303 is described in the preamble as “an act relating to electronic transactions by permitting the use of distributed ledger technology and smart contracts” in the state of Iowa.
Presented earlier this week by Republican State Senator Mark Lofgren, the bill introduces parity of legal status for smart contracts as other forms of secure records, unless explicitly stated to the contrary.
The bill also expands the state’s definition of a “contract” to include smart contracts and other agreements secured by distributed ledger technology. As a result, the bill means no contract would be considered illegitimate by virtue of being a smart contract.
Definitions of “electronic record” and “electronic signature” also includes records and signatures secured on the blockchain, giving a firm legal standing to use cases of DLT in law. The measures are crucial for giving legal force to agreements, signatures and records secured on the blockchain, according to state sources.
The legislation builds on previous rules introduced in the state, designed to exempt digital currencies from some regulations around securities and money transmission, as part of the state legislature’s efforts to provide an appropriate legal basis for blockchain tech going forward.
The measures come at a time of increasing interest in blockchain technology and smart contracts in the state, and across the US more broadly. With numerous applications in both commercial and public sector spheres, the laws give legal certainty and clarity for developers, innovators and organizations relying on DLT and smart contracts.
The bill is Iowa’s answer to the laws being introduced in other states to set the legal groundwork for greater reliance on these technologies in the future.
See also: U.S. Rep. Darren Soto’s keynote talk at CoinGeek Live, Balancing Innovation & Regulation for Growth of Blockchain Technology
New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.