Ohio to consider information stored in a blockchain valid and legal in SB 300

By Molly Ryan Kowaleski, OSCPA content & community manager

A bill in the Ohio Senate would recognize blockchain records and smart contracts as legally enforceable, valid electronic records similar to traditional contracts.

Senate Bill 300, introduced in May by Sen. Matt Dolan, R-Chagrin Falls, would amend sections of the Uniform Electronic Transactions Act to define blockchain, specifically, as follows.

“’Blockchain technology’ means distributed ledger technology that uses a distributed, decentralized, shared, and replicated ledger, which may be public or private, permissioned or permissionless, or driven by tokenized crypto economics or tokenless. The data on the ledger is protected with cryptography, is immutable and auditable, and provides an uncensored truth.”

The Uniform Electronic Transactions Act already spells out contracts this way: “a contract may not be denied legal effect or enforceability solely because an electronic record was used in its formation,” but the proposed amendment would add “or because the contract contains a smart contracts term,” which, according to coindesk.com, makes it “clear that smart contracts may be used for legal documents.”

Additional revisions would be made to sections 1306.01, 1306.04 and 1306.06 of the Uniform Electronic Transactions Act, respectively.

While proponents of cryptocurrencies and blockchain technology hail the bill as a presumptive measure for the – in their view – inevitable adoption of these technologies, opponents say more study and groundwork should be undertaken before these technologies are considered mainstream.

If signed into law, Ohio would be one of several states, including Arizona and possibly California, Florida and Tennessee, to recognize the legality of these technologies and transactions.