Tech

Steve Kaaru

New Washington State law gives blockchain records legal validity

Washington State has passed a bill that makes blockchain records legally valid. The bill officially accords the same validity to blockchain records that all the other electronic records have in the state.

The bill also provides legal definitions for the ‘distributed ledger’ and ‘blockchain’, further cementing the validity of the technology in the state. It defines blockchain as a “cryptographically secured, chronological, and decentralized consensus ledger or consensus database maintained via internet, peer-to-peer network, or other similar interaction.”

The bill, which was signed into law by Governor Jay Inslee, includes a clause that explicitly protects blockchain records from discrimination:

“An electronic record may not be denied legal effect, validity, or enforceability solely because it is generated, communicated, received, or stored using distributed ledger technology.”

The bill was introduced on January 25 by four Washington legislators. It sought to revise the longstanding “Washington Electronic Authentication Act” which guides the state’s law in matters relating to electronic records. After going through the mandatory readings, it was voted into law by an overwhelming 96-1 majority.

The new law is expected to go a long way in encouraging more companies in the state to implement distributed ledger technology in their operations. It assures these companies that any records they store on the blockchain are legally valid.

Washington becomes the latest state that seeks to become the leader in the advancement of blockchain technology. Last month, lawmakers in the state of Utah tabled a bill that seeks to exempt blockchain companies from being classified as money transmitters. This would free them of the scrutiny that such businesses face, especially due to the Money Transmitter Act. The bill also sought to create a taskforce that would be solely responsible for drafting blockchain-related regulations.

Utah joined other pioneering states such as Wyoming, Pennsylvania, Ohio and Indiana, all of whom have kick-started processes that are meant to foster blockchain advancement.

Wyoming in particular has taken the lead in blockchain regulation. The state passed five bills two months ago that seek to boost blockchain technology. The state even has a blockchain task force led by the former Morgan Stanley and Credit Suisse executive Caitlin Long. Their efforts haven’t gone unrewarded with startups like BeefChain, which recently acquired a USDA certification, springing up in the state. Furthermore, IOHK, the company behind Stellar cryptocurrency reportedly revealed it’s moving its offices from Hong Kong to Wyoming.

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