Illinois has become the latest state in the union to legalize blockchain contracts, or smart contracts.
Part of the new law states:
“A smart contract, record or signature may not be denied legal effect or enforceability solely because a blockchain was used to create, store or verify the smart contract, record or signature,”.
This means these contracts are now admissible as evidence in court, recognized as a viable alternative to paper-based records and statutorily exempt from local taxation.
According to CoinDesk, the Illinois law extends the same legal recognition already enjoyed by paper contracts to blockchain contracts and agreements so that they are recognized as legally binding in the eyes of the state.
It also shields the blockchain industry from local government interference, meaning cities and towns cannot impose taxes and regulations or require licensing or permits on blockchain systems or those who use them.
“The law ensures that businesses and individual community members will not have to navigate a patchwork of local blockchain regulation,” said Alison Mangiero, president of blockchain technology company TQ Tezos and a proponent of the bill.
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