In May, Ohio Senator Matt Dolan submitted to the state legislature a bill intended to clarify the legal status of blockchain signatures and contracts. The bill, SB300, failed to advance but portions of its language were inserted as amendments into another bill, SB220, which is concerned with cybersecurity and has now become law in the state.
SB220 was passed by the Senate in May and by the House in June, and had been awaiting a decision from the governor until Friday, when John Kasich finally announced he had signed the bill.
Dolan's bill, SB300, would have made five major changes to current Ohio statutes. It would have defined "blockchain technology" and "smart contracts." It also would have specified that a person who places information they own on the blockchain maintains the same ownership rights as they had before doing so, and that electronic records and signatures secured through blockchain technology are valid electronic signatures.
When interviewed last month, Dolan said the legislature might "scale back on some of that language." That appears to have happened. Three of the five proposed changes, which would have been substantial, died with SB300, while two modest provisions were allowed to live on in the form of amendments to SB220. These were the sections regarding the legal validity of blockchain contracts and signatures.
The full language that survived intact is:
"A record or contract that is secured through blockchain technology is considered to be in an electronic form and to be an electronic record."
"A signature that is secured through blockchain technology is considered to be in an electronic form and to be an electronic signature."
Both sections would constitute changes to the state's version of the Uniform Electronic Transactions Act (UETA), which has been adopted in slightly varying forms by nearly every state. The law was created to ensure electronic transactions would have the same force as transactions completed on paper, specifying that electronic signatures and contracts are as binding as those made with ink.
Other states have also been working on UETA amendments to clarify the legal validity of certain blockchain-secured transactions, but it's questionable whether this clarification is always necessary. While such legislation may reduce the chances of litigation regarding blockchain contracts, the assertion that blockchain contracts and signatures are types of electronic contracts and signatures, respectively, seems self-evident.
Perhaps by eliminating even the shadow of uncertainty, or simply by creating an appearance of openness to blockchain technology, legislators believe they can make their states attractive to blockchain businesses. Dolan has been clear that this is his intention. In a press release on the passage of SB220 sent to ETHNews, he asserted:
"I want Ohio to be the next Silicon Valley where our schools are taking the lead in blockchain coding, creating an educated workforce that will attract new businesses, innovators and fostering a creative spirit in Ohio."