On 6 October 2020, Congressmen David Schweikert from Arizona and Darren Soto from Florida introduced a bill for the Blockchain Records and Transaction Act. The Act seeks to amend existing legislation to clarify blockchain’s applicability to electronic records, signatures, or smart contracts. This is an attempt to create national standards on the legality, validity and enforceability of such records.
The bill contains only a few changes. The first is new text that emphasizes electronic records, signatures or smart contracts cannot be denied legal effect, validity or enforceability, merely because it uses blockchain technology.
The original legislation created in 2000, the Electronic Signatures in Global and National Commerce Act, states that contracts for foreign or interstate commerce transactions are not to be denied legal effect because it is electronic or uses electronic signatures.
The other new changes are the definitions of blockchain and smart contracts.
U.S. states often have regional procedures to apply certain laws. The Blockchain Act pre-emptively stops individual States from rejecting the underlying technology. The congressmen explicitly state in the announcement that they want to “ensure states cannot avoid giving legal recognition to blockchain records through reverse pre-emption.”
This is perhaps the primary motivation. Because it’s a little unusual to have such clear definitions of technologies. Regulators often prefer broader definitions to allow more room for maneuver, so they can easily encapsulate multiple new technologies that may appear in the future. On the other hand, clear definitions can be seen as restrictive.
