The Iowa House of Representatives recently approved the recognition of decentralized ledger technology (DLT) and smart contracts as a valid means of entering into agreements of transactions. This means that the law now recognizes the use cases of both technologies and provides legal backdrop for the two.
The bill was first introduced by Iowa lawmakers in February and was described as an act that will permit the use of DLT and smart contracts in the state. This comes amidst the recent push for a firm legal foundation concerning the future implementations of these technologies.
According to the National Conference of State Legislatures (NCSL), the bill is an upgrade of the uniform electronic transaction Acts. The code chapter 554D states that the Act gives legal backing to electronic records, signatures, and contracts.
However, the new bill recognizes DLT and smart contracts and gives them full operability under the law. It states that a smart contract shall have access to full legal effect just as a regular contract would. This means that smart contracts would no longer be considered illegal.
Iowa Bill to Drive Broader Crypto Regulation
The bill updates the definition of a “contract” to include smart contracts and gives a definition to both DLT and smart contacts. Also, records and signatures obtained from the blockchain have been included in the definitions of “electronic record” and “electronic signature” respectively.
Jeff Shipley, a member of the House of Rep said that the bill is not so much of a complete regulation but only covers the basic groundwork for now.
Summarily, the new bill indicates that there is now a legal backdrop for smart contracts and distributed ledger technology. It will also expand the adoption of blockchain by the mainstream and act as an impetus to generally regulate cryptocurrency.