Relating to contract enforceability regarding smart contracts and distributed ledger technology

This bill relates to digital assets, smart contracts, and distributed ledger technology. The bill defines “controllable account” to mean an account evidenced by an electronic record that the debtor undertakes to pay the person that has control of the controllable electronic record. The bill defines “controllable payment intangible” to mean a payment intangible that is evidenced by a controllable electronic record that the account debtor undertakes to pay the person that has control of the controllable electronic record. The bill defines “digital asset” to mean any electronic record that represents or evidences economic value or economic, proprietary, or access rights that may be used as a payment with exceptions. The bill defines “distributed ledger technology” to mean an electronic ledger where the ledger is redundantly maintained or processed by more than one computer or machine to guarantee the consistency and an electronic record of transaction or data where the electronic record is uniformly ordered and maintained or processed to guarantee nonrepudiation of the recorded transactions. The bill defines “electronic money” to mean an electronic medium of exchange currently authorized or adopted by a domestic or foreign government, but not including a deposit account. The bill defines “smart contract” to mean an electronic record that is an event-driven, automated transaction that runs on a distributed, decentralized, shared, and replicated ledger that executes the terms of the contract. The bill defines “transaction” to mean the sale, trade, exchange, transfer, payment, or conversion of a digital asset or other property or actions relating to the conduct of business, commercial, or governmental affairs. The bill defines “transferable record” to mean the same as defined in the uniform electronic transaction Act and as “electronic signatures” are defined in the federal Electronic Signatures in Global and National Commerce Act. The bill provides that digital assets are classified as intangible personal property. The bill provides that signatures, records, and contracts executed, created, generated, sent, communicated, received, signed, adopted, recorded, or stored by means of distributed ledger or smart contract are valid documents or agreements that maintain full legal effect. A person engaging in commerce who uses distributed ledger technology to secure information retains the same rights of ownership with respect to the information as the person had prior to using the distributed ledger technology. The bill makes conforming amendments.106A regarding use of distributed ledger technology.