Illinois Legalizes Blockchain Contracts
The state’s “Blockchain Technology Act,” sponsored by Rep. Keith Wheeler (R), took effect Jan. 1, opening a slew of potential new legal scenarios for blockchain-based contracts.
The Act read that a smart contract, record or signature may not be denied legal effect or enforceability solely because a blockchain was used to create, store or verify the smart contract, record or signature.
The Act defines blockchain as an electronic record created by the use of a decentralized method by multiple parties to verify and tore a digital record of transactions which is secured by the use of a transaction hash of previous transaction information.
Permitted use of blockchain:
· A smart contract will give legal effect or enforceability based on the information created, stored, or verified on the blockchain
· In a proceeding, evidence of a smart contract will be included
· If a law requires a signature, the submission of a blockchain which contains digital signature of the person will be accepted.
Exceptions to this permission of usage of blockchain:
· Such contracts are not accepted in case of handling of hazardous materials, pesticides, or other toxic or dangerous materials.
· If law requires particular contracts to be in the written format.
· If law inhibits the ability of a person to store or retrieve information contained in a blockchain.