Illinois Recognizes Blockchain based Evidences as Legal
Illinois court has passed the “Blockchain Technology Act” which will now approve the blockchain-based smart contracts and blockchain records as legal and authentic in court. This law has been framed under Bill 3575 and was signed by Governor JB Pritzker in August 2019 and has been enforced from January 1, 2020, in the state.
Blockchain Technology Act
The Blockchain Technology Act defines blockchain as “Electronic record state by the use of the method by multiple parties verify and store a digital record of transactions by the use of a cryptographic hash of previous transaction information.”
It further states, “Smart contract record or signature may not be denied or enforceability solely because of blockchain was used to create a store or verify the smart contract record or signature."
The Act permits limited use of blockchain technology in financial operations including smart contracts, electronic signatures, and electronic records. The blockchain-based contracts will now be recognized as evidence in courts instead of documental records and statutorily exempt from the law restricts the implementation to a certain extent.
Opinions of Legal Experts
The President of the blockchain firm TQ Tezos and proponent of the bill Alison Mangiero said, "The law ensures that the businesses and individual community members will not have to navigate a patchwork of local blockchain regulation. Alison is optimistic that this act will encourage more companies to integrate this technology in their day to day operations and will bring certainty and stability to their businesses. Legal expert Tatyana Ruderman from InfoLowGroup commented that the Act will facilitate and encourage the companies to use blockchain-based contracts but it has some loose ends which might face legal challenges in future. Additionally, the local government is restricted from imposing any tax or charges for blockchain technology users and doesn't signify to produce any documental proof like a license or permit to use the blockchain or the smart contract. Illinois now has become another state to pass this Blockchain Technology Act after Vermont and Arizona who passed similar bills in 2016 and 2017 respectively. Illinois now became another state to embrace the blockchain-based contracts.
In November 2016, the Illinois Blockchain Initiative (IBI) had been authorized to explore the possibilities of blockchain application in the state economic affairs. The IBI thus collaborated with blockchain startup Evernym in 2017, to develop secure identity solutions using the blockchain technology.
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