Add Connecticut, Ohio and Vermont to the list of states passing legislation focused on the potential disruptive impact of blockchain – the technology underlying cryptocurrencies such as Bitcoin. As federal regulators continue to monitor and offer guidance in the cryptocurrency space, with particular focus on Initial Coin Offerings (ICOs), state legislatures around the country are looking to favorably position their respective states to attract businesses developing blockchain-based applications.
In Connecticut, the state legislature passed Special Act 18-8, which was signed by the governor on June 6, 2018, and which commissions the formation of a blockchain working group. Under the law, the working group is tasked with developing a “master plan for fostering the expansion of the blockchain industry” in Connecticut and with recommending “policies and state investments to make Connecticut a leader in blockchain technology.” The working group’s findings and recommendations are scheduled to be submitted by January 1, 2019.
In Ohio, the legislature passed Senate Bill 220, which, in part, confirms that transactions recorded by blockchain technology are enforceable. The bill, passed on June 27 and awaiting signature from Governor John Kasich, is similar to bills previously passed in Arizona, Nevada and Vermont and grants legal recognition to blockchain transactions as being explicitly covered by the State’s Uniform Electronic Transactions Act.
Meanwhile, Vermont passed additional legislation directed to blockchain business models. Act No. 205 went into effect on July 1, 2018, and includes provisions authorizing the creation of “Blockchain-Based Limited Liability Companies” (BBLLCs), defined in the Act as a business that utilizes blockchain technology for a “material portion of its business activities.” If designated as a BBLLC, the business may use blockchain technology in performing corporate governance functions, including adopting voting procedures using smart contracts carried out on the blockchain. The law also tasks the Vermont State Archives and Records Administration and other public agencies with evaluating blockchain technology as a means for the “systematic and efficient management of public records” and to report on its findings and make legislative recommendations by January 15, 2019.