Proposed legislation aims to solidify New York as the Blockchain capital of the U.S.
As the use of cryptocurrencies and blockchain technology grows, so will the use and implementation of smart contracts. Smart contracts are computer programs that directly control the transfer of digital currencies or assets between parties under certain conditions. This allows for computer protocols to digitally facilitate, verify, or enforce the performance of a contract, while largely cutting out third parties like banks and lawyers.
Recognizing the utility and significance of blockchain technology, states have begun passing legislation making smart contracts legally enforceable. In 2017, Arizona became the first state to enact a law explicitly granting smart contracts the same legal effect, validity, and enforceability as standard contracts. The bill brings any signature, record, or contract secured through blockchain technology deemed valid under Arizona’s Electronic-transactions act. Similarly, other states such as Nevada and California have passed, or drafted legislation that would expand the definition of electronic records and signatures to account for blockchain signatures and smart contracts.
In December of 2017, four laws were proposed in New York, which would transform how New York interacts and view blockchain technology. Similar to bills passed in Arizona and Nevada, the first proposal would amend the state’s technology law to allow for signatures obtained via blockchain to be recognized as valid. Furthermore, it defines smart contracts and deems them as valid and enforceable. The next bill proposed calls for the state board of elections to evaluate how blockchain technology may be used to protect voter records and election results. Two other proposed bills seek to create task forces to better understand the impact of virtual currencies on financial markets and how the technology will impact record-keeping, information storage, and service delivery.
A recent report from the analytics firm Burning Glass found that New York has more blockchain-related jobs than the San Francisco Bay Area. If the proposed legislation is passed, it will help further solidify New York as the Blockchain capital of the United States.