Washington state officially protects legal status of blockchain and distributed ledger-based records with Washington Electronic Authentication Act.

Washington state has officially recognised and protected the legal status of blockchain and distributed ledger-based records, in a move designed to encourage the development and use of the technology.

On 26^th April Governor Jay Inslee signed Senate Bill 5638 into law, following it passing the state legislature by an overwhelmingly positive vote of 96-1. The law is expected to be effective from late July.

The innovative legislation, known as the Washington Electronic Authentication Act, was sponsored by four Republican State Senators: Sharon Brown, Randi Becker, Shelly Short, and Ann Rivers, while the Washington Technology Industry Association had also lobbied hard for the new legislation.

Interestingly, the Act contains a clause prohibiting discrimination against electronic records that have been part of a distributed ledger, stating:

“An electronic record may not be denied legal effect, validity, or enforceability solely because it is generated, communicated, received, or stored using distributed ledger technology.”

It also legally defines the terms “blockchain” and “distributed ledger” – something absolutely critical to avoid grey areas and misinterpretations in the future (see the confusion caused by lack of consensus regarding cryptocurrency definitions among global authorities here).

Washington isn’t the first state to clarify the status of blockchain-based records, like smart contracts. Back in March 2018, Tennessee Governor Bill Haslam signed a similar bill into law which recognised “the legal authority of blockchain technology and smart contracts in conducting electronic transactions,’”

Ohio also introduced a bill designed to aid the state government in adopting blockchain-based services, and became the first US state to accept cryptocurrencies for tax payments (read more).

AYO.NEWS says:

Its great to see individual states taking the initiative and establishing clear legal frameworks and definitions for blockchain tech. With Seattle being known as a tech start-up city, and home to innovative giants like Amazon, the clarity and certainty provided by the Act is sure to boost business in the state.  

AYO.NEWS says features the opinion of the author and does not necessarily reflect the views of Pentagon Digital Limited.