This week, a draft law intended to improve California’s legislation to create legal grounds for the implementation of crypto-related technologies has been passed by Cali’s legislature. This new draft law titled Assembly Bill 2658, corrects the California Civil Code, Government Code, Corporations Code, and Insurance Code to legalize the use of blockchain secured data and smart contracts in local and foreign commerce. This document consists of important definitions of a few key blockchain and crypto terms.
Ian Charles Calderon, an American politician serving in the California State Assembly. He is a 32- year old California Democrat, who recently accomplished a draft defining basic terms related to cryptocurrencies and the underlying distributed ledger technology (DLT). The state’s legislature has recently passed his Assembly Bill 2658 which introduces legal definitions of “blockchain technology” and “smart contract”, and revises others like “electronic record” and “electronic signature” to legalize and facilitate record keeping using DLT. The draft is co-sponsored by Senate Democrat Bob Hertzberg.
As the new bill is being adopted, some essential laws will be amended. Changes like the provisions of Sections 1624.5 and 1633.2 and adding a new Section 1633.75 to the state’s Civil Code. The act also amends Section 25612.5 of the Corporations Code, Section 16.5 of the Government Code, and Section 38.6 of the Insurance Code relating to electronic records. The main purpose of the Bill 2658 is to modify provisions of the act that defines “electronic record” and “electronic signature” to include a record or a signature secured through blockchain technology.
In addition, it would add the term “smart contract” to the legal definition of “contract”. Also, the draft specifies that a person who uses blockchain technology to secure information in relation to interstate or foreign commerce continues to have the same rights of ownership and use as before the data was secured with a distributed ledger.
The introduction of legal definitions describing key terms related to DLT technologies and cryptocurrencies is an outstanding merit of Calderon’s bill. One of the important new provisions states that “Blockchain technology means distributed ledger technology that uses a distributed, decentralized, shared, and reciprocal ledger, which may be public or private, permissioned or permissionless, or driven by tokenized crypto economics or tokenless.”
In addition to that, Clause (c) was also added to section 1633.2 of the California Civil Code notes that “the data on the ledger is protected with cryptography, immutable, auditable, and “provides an uncensored truth.”