Blockchain Transactions Now Recognized Under Tennessee Law

A bill recognizing the legal authority to use blockchain technology and smart contracts for electronic transactions has been signed by Tennessee governor Bill Haslam.

Senate Bill 1662 was introduced on January 18 by Republican Senators Steven Dickerson and Richard Briggs, and Democratic Senators Lee Harris and Jeff Yarbro. The bill “recognizes the legal authority of blockchain technology and smart contracts in conducting electronic transactions.” It also makes a provision that, “protects ownership rights of certain information secured by blockchain technology.”

The law also recognizes that smart contracts have legal power and establishes that “no contract related to a transaction will be denied legal effect, validity or applicability only because that contract contains an intelligent contract term.”

Blockchain is defined in the bill as “any distributed ledger protocol and supporting infrastructure, including blockchain, that uses a distributed, decentralized, shared, and replicated ledger, whether it be public or private, permissioned or permissionless, and which may include the use of electronic currencies or electronic tokens as a medium of electronic exchange.”

The move highlights the growing interest among state lawmakers in blockchain technology, with Arizona’s government finalizing a similar law last spring. Lawmakers in Nebraska and Florida have also introduced similar bills. However, the Nebraska bill has not yet been voted on by the full Assembly, while the Florida bill “died on the calendar.”

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