Blockchain, smart contracts now legally binding in Tennessee
Tennessee has enacted a law that recognizes blockchain signatures and smart contracts as legally binding.
Senate Bill 1662, which was passed unanimously by the Tennessee General Assembly on March 8, acknowledges signatures secured through blockchain as electronic signatures, and records or contracts secured through blockchain as electronic records. Gov. Bill Haslam signed the bill into law on Thursday.
Electronic signatures and contracts secured through blockchain technologies now have equal legal standing with traditional types of contracts and signatures. Blockchain is a digital ledger in which cryptocurrency transactions are recorded chronologically and publicly, most famously used by cryptocurrencies like bitcoin.
The bill defines blockchain technologies as “distributed ledger technology that uses a distributed, decentralized, shared, and replicated ledger, which may be public or private, permissioned or permission-less, or driven by tokenized crypto economics or tokenless. The data on the ledger is protected with cryptography, is immutable and auditable, and provides an uncensored truth.”
On smart contracts, computer programs that control the transfer of cryptocurrencies between parties, the bill reads “no contract relating to a transaction shall be denied legal effect, validity, or enforceability solely because that contract contains a smart contract term.”
Tennessee joins a number of other states, including Wyoming, Nebraska, Florida, New York, and Colorado, in expanding the legality of blockchain technologies and paving the way for their use in government.