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Blockchain Working Group Bill Passed by California Lawmakers

The California lawmakers have passed an Assembly Bill 2658; this bill is hinged on creating a legal roadmap for the inclusion of the ingenious blockchain technology into the insurance code of the state.
The bill was sponsored by the Democrat Ian Calderon and it requests amendment of Sections 1624.5, 1633.2, and 1633.75 of the Civil Code, Section 25612.5 of the Corporations Code, Section 16.5 of the Government Code, and Section 38.6 of the Insurance Code, which are all pertaining to blockchain technology, smart contract an electronic signatures.

The Newly Proposed Amendments

In the previous sections of the California Law before the amendment, the Uniform Electronic Transaction Act offered the required legal protection and enforceability to authorize and engage in a contract using electronic signatures by expressly stating that, an electronic record or signature would suffice in an instance where appending of the signature is required.
However, the previous law was silent as to whether or not records or signature using blockchain technology would suffice; this was a gap which has given rise to an ambiance of uncertainty within the blockchain community.
This new bill has come to legally eliminate the uncertainty as it expands the definition of contract under the California law to accommodate smart contracts which are now the enabling Act for the use for the use of Blockchain-based electronic signatures in concluding an agreement. It also specifies that any trader engaging in interstate or foreign commerce using the blockchain system (for data storage) will own a right to the same ownership and usage right in California.
According to the new bill, Section 1633.2 of the Civil Code is now amended to accommodate a legal description of the Blockchain technology, the Cause ‘e’ in the section is improved to the following;

“Contract means the total legal obligation resulting from the parties agreement as affected by this title and other applicable law. Contract includes a smart contract.”

While Clause ‘h’ is also further amended to the following:

“Electronic record means a record created, generated, sent, communicated, received, or stored by electronic means. A record that is secured through blockchain technology is an electronic record.”

How It Started

It is noteworthy to trace the history of the successful passing of this bill to February when the National Assembly Member Calderon advocated for the use of blockchain introduction into assigning of signature and smart contracts in the state. The passing of bill 2658 marks a significant take-over for Calderon who is 29 years old; making him the first new generation to win a seat at the National Assembly.
Also, a similar event was recorded in April as Bob Hertzberg when a California Senator launched bill SB 838 to adopt blockchain technology into formal documentation which translates to corporation article of incorporation throughout the state. This clamor for the adoption of a blockchain system has therefore metamorphosed into the consequent passing of the bill.

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