The Iowa House of Representatives has approved a bill seeking to give legal recognition to smart contracts. Consequently, transactions made via blockchain smart contracts will be legally binding in the state of Iowa.
Under the new bill, smart contracts would enjoy the same legal status as regular contracts. Meanwhile, blockchain technology would be considered a reliable electronic store of record. An excerpt from the bill reads:
The bill provides that a contract shall not be denied legal effect or enforceability solely because the contract is a smart contract or contains a smart contract provision… A person who, in engaging in or affecting interstate or foreign commerce, uses distributed ledger technology to secure information that the person owns or has the right to use retains the same rights of ownership or use with respect to such information as before the person secured the information using distributed ledger technology.
For the uninitiated, a smart contract is an automatically-executed contract with the terms of the agreement being written into lines of code.
Democratic Representative Steve Hansen opined that the implementation of the bill is a stepping stone to broader regulation of cryptocurrencies.