Legislation sponsored and passed this spring by State Rep. Keith Wheeler, R-Oswego, to set parameters for the use of blockchain technology has been signed into law by Governor JB Pritzker.
Blockchain technology, also known as distributed ledger technology, can be thought of as a public ledger that can be programmed to record and track anything of value. Once a transaction occurs, the transaction is recorded and validated by several different users on the network, making the record permanent and immutable. Blockchains are typically designed to record and validate transactions through a decentralized network of independent computers. This structure provides a secure way to store the data and removes the need for competing records or the need for a single, trusted, recordkeeper.
Importantly, Blockchain technology and smart contracts can reduce complexity and risk, increase transparency and security, lower transaction costs, and speed up complex processes.
“While many folks outside of the information technology and cybersecurity industry may not be familiar with blockchain, its use has a very direct and important impact on our daily lives,” Rep. Wheeler said. “This bill sends a strong message to blockchain-based businesses, developers and potential adopters that Illinois is supportive of innovation and blockchain technology and is a welcoming place to do business.”
Public Act 101-0514, also known as the Blockchain Technology Act, provides legal recognition to smart contracts and blockchain-based records and signatures. Specifically, it:
- Provides that evidence of a smart contract or blockchain-based record or signature must not be excluded in a proceeding solely because it was created or stored on a blockchain
- Provides certain limitations for blockchain transactions and smart contracts
- Prohibits local governments from regulating or taxing blockchain technology or smart contracts
- Defines key terms
The bill does not mandate the use of blockchain technology or smart contracts, nor direct state or local governments to adopt blockchain technology. Instead, it simply provides regulatory certainty for blockchain developers and adopters that blockchain-based records, signatures, and contracts will not be denied legal effect because of the technology used.
“Bills like this provide important clarity for developers and potential adopters, allowing them to rest assured that transactions facilitated by blockchain technology will receive legal recognition, which ultimately promotes more innovation,” added Alison Mangiero, President of TQ Tezos, a community member of the Tezos protocol and supporter of the Blockchain Technology Act. “We applaud Representative Wheeler and Senator Sims for their work moving this important bill along and supporting innovation through technology.”
Governor JB Pritzker signed the Blockchain Technology Act into law on August 23. For questions or more information, please call Rep. Wheeler’s office at (630) 345-3464.
Rep. Wheeler serves the 50th District, which includes portions of Aurora, North Aurora, Batavia, Geneva, Campton Hills, Elburn, Montgomery, Oswego, Plano, St. Charles, Sugar Grove and Yorkville.