Tennessee Passes Bill Recognizing Blockchain, Smart Contracts For Electronic Transactions

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Tennessee has recognized Blockchain technology and smart contracts as legal authorities to be used to execute electronic transactions. On March 22, the governor of Tennessee signed into law a bill which recognizes the legal authority of smart contracts and Blockchain technology to be used in electronic transactions.

The bill says the two now have the legal authority to be used in conducting electronic transactions. The bill also has clauses which are meant to ensure ownership rights of some information that may be secured using the blockchain technology.

Governor Bill Haslam signed Senate Bill 1662 into law, more than three months after it was introduced on January 18 this year. The bill was passed in the House and the Senate without opposing votes. The bill was sponsored by Republican Senators Richard Briggs and Steven Dickerson and Democratic Senators Jeff Yarbro and Lee Harris.

In the bill, blockchain technology has been defined as a distributed ledger protocol which has supporting infrastructure including blockchain and which uses decentralized, distributed, replicated and shared ledger, whether private or public, with permission or without permission and which include the use of electronic tokens or electronic currencies as medium of electronic exchange.

The bill defines a smart contract as a computer program driven by an event which executes on a distributed, electronic, shared, decentralized and replicated ledger which is used to automate transactions. The bill further notes that there shall be no contract relating to a transaction which shall be denied validity, legal effect or enforceability just because the contact contains a smart contract term.

Individual states in the United States have been passing several bills related to crypto since the start of this year. In February, initiated a bill to accept crypto in paying for state licenses fees and taxes. In March, the state of Wyoming introduced a bill which created a new asset class specifically for cryptocurrencies. The bill exempts the cryptocurrencies from securities regulations in the state.

This law is very similar to the ongoing efforts in Nebraska and Florida to store legal information on blockchain.

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