- New laws are a clear indication that smart contracts will be impactful.
- Smart contracts are tied to the emerging blockchain technology platform.
- Smart contracts could automatically execute increasingly complex tasks.
This spring, Arizona became one of the first states in the U.S. to enact a law explicitly granting smart contracts the same legal effect, validity and enforceability as their standard contract counterparts. “Smart contracts” are automatically executing agreements that run on the blockchain technology platform. Blockchain was first deployed to allow for transactions involving the Bitcoin cryptocurrency, and it was later enhanced by the Ethereum blockchain platform, which was specifically designed for smart contract applications.
Current legal state of smart contracts and blockchain technology
Taking the lead last year, Delaware started the Delaware Blockchain Initiative (DBI), which is probably the most well-known state program focused on smart contracts and blockchain technology. Delaware’s then-Governor, Jack Markell, launched DBI to jumpstart recognition of blockchain technology under state corporate law, an especially significant move considering the many companies incorporated in that state.