Illinois is the latest state to recognize smart contracts and blockchain-based record keeping. On January 1, 2020, the Blockchain Technology Act went into effect throughout the state.
What Does the Blockchain Technology Act Do?
The new law makes blockchain-based contracts admissible as evidence. Businesses and individuals can use them in a variety of legal agreements as an alternative to traditional, paper-based records. Also, under the new law, smart contracts are exempt from taxation.
Blockchain-Based Contracts Across the Nation
Illinois isn’t the first state to legalize smart contracts. In 2016, Vermont made blockchain-based records admissible in court. The following year, Arizona passed a blockchain signatures law.
Illinois’s new smart contract law gives blockchain agreements the same legal protection and recognition that paper contracts already receive. Moreover, the blockchain industry is now legally protected from municipal interference. This means cities are not allowed to regulate blockchain systems with licensing requirements.
Furthermore, it’s now also against the law for cities to impose taxes on these systems. The updated rules are a boon for businesses because now they only have to comply with state laws instead of a patchwork of local requirements.
The bill’s proponents say it will allow companies to embrace new technologies, adding certainty and stability to the burgeoning industry. However, a handful of potential hiccups, like the bill’s vague wording, could lead to legal disputes in the near future. Additionally, the law only applies to Illinois.
Connect with a Smart Contract Attorney in Illinois
If you have questions about Illinois’ new smart contract law, or something else related to blockchain legalities, get in touch with the Gordon Law Group today.
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