Iowa House approves bill to legally recognize blockchain smart contracts
The Iowa House of Representatives passed a bill this week that seeks to legally recognize transactions and registrations made via blockchain smart contracts. The bill—SF541—gained Senate approval earlier in the month.
Under the new bill, smart contracts would be given the same legal status as regular contracts, while distributed-ledger technology would be viewed as a reliable electronic store of record. Regarding smart contracts, the bill states:
“A contract shall not be denied legal effect or enforceability solely because an electronic record was used in its formation or because the contract is a smart contract or contains a smart contract provision.”
The bill goes on to clarify that any registration of rights expressed via a smart contract is not invalidated by that fact.
“A person who, in engaging in or affecting interstate or foreign commerce, uses distributed ledger technology to secure information that the person owns or has the right to use retains the same rights of ownership or use with respect to such information as before the person secured the information using distributed ledger technology. This section does not apply to the use of distributed ledger technology to secure information in connection with a transaction to the extent that the terms of the transaction expressly provide for the transfer of rights of ownership or use with respect to such information.”