- Bill 2658 was introduced earlier in the year; it has been passed by both of the houses in California.
- The bill cannot become law until signed by the governor.
- The adoption of the bill will result in the amendment of several critical laws.
The state legislature of California has caught the attention of the mainstream media after passing a bill that seeks to define blockchain and cryptocurrency terms. The Assembly Bill 2658 according to Bitcoin.com, a news website “amends the California Civil Code, Government Code, Corporations Code, and Insurance Code to legalize the use of blockchain secured data and smart contracts in local and foreign commerce.” The document encompasses crucial definitions related to the blockchain as well as key cryptocurrency terms.
The passed Bill 2658 has brought to light important definitions of “blockchain technology” along with “smart contracts.” Moreover, it has revised other terms such as “electronic record” and electronic signature.” This move is intended to legalize and also facilitate record keeping while employing distributed ledger technology (DLT). The draft was prepared by Ian Calderon, a Democrat Assembly member in the state and co-sponsored by Bob Hertzberg, a senate democrat.
The adoption of the bill will result in the amendment of several critical laws. Some of these will be the changes to the provisions of sections 1624.5 and 1633.2. In addition to that, there will be an extra section created, section 1633.75 to the state’s Civil Code. Significantly, the bill will amend sections 25612.5 of the Corporations Code and Section 16.5 of the Government Code as well as section 38.6 of the Insurance Code that relates to electronic records. A vital section of the new bill describes blockchain technology as:
“Distributed ledger technology that uses a distributed, decentralized, shared, and reciprocal ledger, that may be public or private, permissioned or permissionless, or driven by tokenized crypto economics or tokenless.” While a section of the new text, 1633.2 (p) explains the “smart contract” as “an event-driven program that runs on a distributed, decentralized, shared, and replicated ledger that can take custody over, and instruct transfer of, assets on that ledger.”
Bill 2658 was also passed in California’s on August 23 Senate following amendments by both houses. However, the Governor, Jerry Brown will have to sign on the Bill for it to become law.
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