American state Ohio has just become the second to legally recognize data stored and shared across blockchain, following the approval of a law introduced in May.
American senator Matt Dolan presented the Senate Bill 300, which amends the “Uniform Electronics Transactions Act”, in order to examine the inclusion of blockchains records and smart contracts as electronic records, as well as to allow said contracts to be legally enforceable, just like any other contract.
The recently approved law elaborates that blockchain can be used to store electronic data and provide ownership rights:
“Notwithstanding any other law, a person that, in or affecting interstate or foreign commerce, uses blockchain technology to secure information that the person owns or has the right to use retains the same rights of ownership or use with respect to that information as before the person secured the information using blockchain technology.”
Since its introduction a couple months ago, it has undergone a modification from its previous version. While the existing law already established that a contract cannot be denied or considered illegal just because it was conceived on an electronic record, the amend stipulates that the smart contract has the same validity that a traditional one, clarifying that it can be used for legal documents.
As a result, any electronic firm handled through blockchain technology will have the same legal enforceability as electronic firms contemplated within the law. However, the law do not refer to the proposed language or terminology to be used in order to recognize smart contracts.
Once the amend for the Uniform Electronics Transactions Act has been approved, Ohio became the second American state – Arizona being the first one – in recognizing blockchain technology for transactions, records and electronic contracts.
Given that the majority of laws related to financial transactions in the United States are elaborated by the states themselves, it is possible that California, Nebraska, Florida and Tennessee – as well as others – follow this trend, for their respective politicians are already working on similar projects. However, it is known that both Florida and Nebraska has postposed their drafts.
It is worth noting that the passing of this law, and the legitimacy of blockchain technology for legal effects, is an important step for the crypto community and the world in general, for the recognizance of electronic data, files and contracts provides confidence and security to its users, and determines that electronically signed documents will have the same enforceability than those hand-written, as long as they comply with a series of basic requirements, applicable to any document.