California Passes Blockchain Bill (AB 2658)
On February 15, 2018, California Assemblymember Ian C. Calderon of District 57 introduced blockchain bill AB 2658. The bill proposes legal framework and a definition of blockchain technology to provide California-based businesses with greater certainty. Providing certainty allows for use and innovation of this new technology.
The California bill passed on May 30, 2018 with 76 aye votes. It defines blockchain as “a mathematically secured, chronological, and decentralized ledger or database of transactions or other data.” This definition remains in effect until January 1, 2022. The bill only pertains to blockchain and excludes smart contracts due to potential complications. Section 2 of the bill requires the Secretary of the Government Operations Agency to appoint a blockchain working group. The group is to form and to have a chairperson by July 1, 2019. The group will evaluate the use, risks, benefits, legal implications, and best practices of blockchain in state government and California businesses. Consisting of over 17 members, the group will take input from a broad range of stakeholders with a diverse range of interests. The group will also report to the Legislature before July 1, 2020.
Currently, there is no uniform definition on what constitutes blockchain technology. There are about six or seven other states that have a blockchain related bill, each having their own definition of blockchain. In addition, the U.S. Uniform Law Commission has no enagement in this effort so far. This bill is the first stepping stone for blockchain and cryptocurrency regulation in the State of California. As Assemblymember Calderon states, there is no one proven way to regulate this new technology. Calderon proposes to move forward and refine regulation, allowing California to be a leader in blockchain innovation.