A smart contract is defined in the bill as an “event-driven computer program, that executes on an electronic, distributed, decentralized, shared, and replicated ledger that is used to automate transactions.”
The bill notes that “no contract relating to a transaction shall be denied legal effect, validity, or enforceability solely because that contract contains a smart contract term.”
Individual US states have been passing several crypto related bills since the new year. In February, Georgia introduced a bill to accept crypto for paying state taxes and license fees, while earlier in March, the state of Wyoming passed a bill creating a new asset class for cryptocurrencies, effectively exempting them from securities regulations in the state.
The governor of Tennessee signed a bill recognizing the legal authority to use Blockchain technology and smart contracts for electronic transactions on March 22, according to legislative tracking site Legiscan.
A summary of the bill reads that it “recognizes the legal authority of blockchain technology and smart contracts in conducting electronic transactions.” The bill also makes a provision that, “protects ownership rights of certain information secured by blockchain technology.”
Senate Bill 1662 was signed by Governor Bill Haslam little more than three months after its introduction on January 18 of this year, passing the Senate and House with no opposing votes. The bill was sponsored by Republican Senators Steven Dickerson and Richard Briggs, and Democratic Senators Lee Harris and Jeff Yarbro.
Blockchain technology is defined in the bill as “any distributed ledger protocol and supporting infrastructure, including blockchain, that uses a distributed, decentralized, shared, and replicated ledger, whether it be public or private, permissioned or permissionless, and which may include the use of electronic currencies or electronic tokens as a medium of electronic exchange.”