Resolution Supporting Innovative Technologies to Strengthen States and Local Communities by Enabling Statewide Use of Distributed Ledger Technology

Summary

Blockchain is an emerging technology with endless applications. Blockchain, or distributed ledger technology, is particularly useful for keeping records or databases for various purposes, including supply chain, government maintenance, and others. One application of blockchain technology is cryptocurrencies. This resolution encourages state governments both to adopt general applications of blockchain and to keep a “hands-off” approach to regulating cryptocurrencies.

Resolution Supporting Innovative Technologies to Strengthen States and Local Communities by Enabling Statewide Use of Distributed Ledger Technology

WHEREAS, the Legislature believes it is in the best interest of [the state] to authorize corporations, the state of [state] and local municipalities to use electronic networks or databases for the creation or maintenance of records; authorizing the use of a data address to identify a corporation’s shareholder; authorizing corporations to accept shareholder votes if signed by a network signature that corresponds to a data address; specifying requirements for use of electronic networks or databases; requiring the secretary of state to review its rules for consistency with this act; and providing for an effective date.

WHEREAS, it is in the best interest for virtual currencies to be exempted from property tax and recognize virtual coins and tokens as virtual commodities.

WHEREAS, blockchain coins should not be regulated as securities and that a person who develops, sells or facilitates the exchange of an open blockchain coin is not subject to specified securities and money transmission laws so long as that coin has an underlying blockchain associated and the coins are mined into existence or the tokens issues through an ICO become disbursed in such a manner that the enterprise associated with the initial coin offering is no longer concentrated to such a degree that one could find that the nature of the transactions would meet the definition of a security.

WHEREAS, it is the best interest for the states to create opportunities for companies within their states to more easily raise capital. As such, states should clearly define a process and safe harbor provisions under state law to allow for companies to more easily raise capital through alternative financing options such as initial coin offerings done via blockchain technology.

WHEREAS, because of the uncertainty in the market, many state-chartered banks are unwilling to do business with companies utilizing blockchain technology, the states must define permissions which allow state- chartered banks to do business with businesses and residents of the state.

WHEREAS, many states have passed laws protecting consumer information. Various states laws may contain language which could limit the proliferation of distributed ledger technology within the state. The states should review their laws to determine if any adjustments need to be made.

WHEREAS, the state and local government offices currently maintain many public records. Use of blockchain can enhance and create efficiency in the services provided by those government agencies holding those public records. Therefore, it is in the public interest to ensure that states enable policies that allow state and local governments to formally use distributed technology that can serve as official records of that government agency.

NOW, THEREFORE, LET IT BE RESOLVED that [state legislature] hereby urges the adoption of legislation supporting distributed ledger technology and cryptocurrency consistent with the foregoing principles.