Tennessee has become the latest U.S state to pass a bill recognizing the legal authority of blockchain technology and smart contracts in conducting electronic transactions.
The bill was passed by Tennessee Governor, Bill Haslam on March 26th, 2018, confirming the legal authority of blockchain and smart contract powered electronic transactions and also protecting the ownership rights of “certain information secured by blockchain technology.”
Immutable and Auditable
An amendment clarifies the application of the bill to:
Any distributed ledger protocol and supporting infrastructure, including blockchain, that uses a distributed, decentralized, shared, and replicated ledger, whether it be public or private, permissioned or permissionless, and which may include the use of electronic currencies or electronic tokens as a medium of electronic exchange.
The new legislation describes cryptographically protected data on a ledger as “immutable and auditable,” and that it “provides an uncensored truth.”
In the bill, a smart contract is classified as event-driven computer program “that executes on an electronic, distributed, decentralized, shared, and replicated ledger that is used to automate transactions.”
This bill allows for smart contracts to exist in commerce, and specifies that no such contract relating to a transaction will be denied legal effect, validity, or enforceability solely because that contract contains a smart contract term.