Illinois legally recognizes blockchain records and smart contracts
Fri, 10 Jan 2020, 06:13 am UTC
The Blockchain Technology Act came into effect in the U.S. state of Illinois on January 01, recognizing smart contracts and other blockchain-based digital records as legal instruments, CoinDesk reported.
J.B. Pritzker signed House Bill 3575 into law last August. With the law now coming into force, blockchain-based records and smart contracts are now admissible in court as evidence.
“A smart contract, record or signature may not be denied legal effect or enforceability solely because a blockchain was used to create, store or verify the smart contract, record or signature,” the law reads.
However, there are certain limitations as well, including that if a law requires that a contract or other record relating to the transaction be in writing, the legal effect, validity, or enforceability of the contract or other records may be denied if the blockchain transaction cannot be accurately reproduced for later reference by all parties.
In addition, local government is prohibited from imposing any tax or fee on the use of a blockchain or smart contract by any person or entity and cannot require any person or entity to obtain any certificate, license, or permit to use a blockchain or smart contract.
Before Illinois, Vermont and Arizona have also passed similar laws, creating a legal basis for blockchain records and signatures.
In Nov. 2016, the Illinois Blockchain Initiative (IBI) was officially announced to explore how the technology can help accelerate economic development in the state. The collaborative effort partnered with blockchain startup Evernym in 2017 to develop secure identity solutions on distributed ledger technology
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