Blockchain task force to review banking, contract law | Newsletter Am

LARAMIE — The Wyoming Legislature began clearing the way for blockchain technology — and the companies wishing to utilize them — passing five blockchain-related bills during the 2018 budget session.

But the path has yet to be fully paved.

Throughout the interim, a legislative blockchain task force is looking to identify the remaining hurdles and recommend remedies that might attract blockchain-using companies to Wyoming, while — lawmakers hope — creating jobs and diversifying the state economy.

“Potentially, it could mean hundreds, if not thousands, of jobs,” said Sen. Ogden Driskill, R-Devils Tower, who chairs the task force. “There’s everything from mining of cryptocurrency down to … companies that handle large amounts of various transactions that would domicile in Wyoming if it was the place they thought the environment was right for them.”

The task force met for the first or three interim meetings last week. Composed of four legislators — two representatives and two senators — and three gubernatorial appointees, the task force spent two days on the University of Wyoming campus, hearing testimony from international experts and reviewing blockchain initiatives and laws from across the U.S. and United Kingdom.

The task force also took a dive into the legislation already passed.

“The purpose of the task force is really twofold,” said Sen. Chris Rothfuss, D-Laramie. “One is to make sure that we take the opportunity to revisit the legislation, clean it up if there are any problems … since a lot of the concepts are new.”

He said the task force was working with state agencies and departments to conduct this review.

“The second is to develop new legislation (and) look around at what else is going on both within the United States and globally, coming up with best practices for utilizing blockchain technologies and cryptocurrencies, and then implementing those in Wyoming to maintain the state’s leadership,” Rothfuss said.

The goal is to make Wyoming a welcoming place for businesses, which could bring jobs and new industries to a state seeking to diversify its economy. Rothfuss said while cryptocurrency is the most well-known application for blockchain technology, the distributed digital ledger is also used for secure financial and other transactions.

“It is highly, highly resistant to tampering and so basically, a way of providing proof of transactions that have taken place,” he said.

The task force is examining the possibility of — and will likely recommend — updating some state statutes that currently make blockchain transactions challenging to complete.

“There are a lot of areas of the law that are going to be affected by these new technologies, but unless we update the statutes and recognize this new technology, business just won’t be allowed to engage in the way it wants to engage,” Rothfuss said.

He added smart contracts — which write the terms of the contract directly into lines of code and utilize blockchain technology — are one example of something potentially prohibited by state law.

“That smart contract may or may not adhere to legal standards for what a contract has to look like or include to be respected by the courts,” he said. “So, the legal complexity of even trying to even have the state recognize these types of transactions that the technology allows is the bulk of the work that we’re doing right now.”

Rewriting statutes related to banking might also be necessary in order to recognize cryptocurrencies.

“We’re looking very closely at possibly creating another class,” Driskill said. “It wouldn’t be a bank but it would operate very similar to a bank with similar regulations, but it wouldn’t be under federal FDIC rules.”

Driskill added the depth and complexity of issues surrounding blockchain technologies were handled well by the task force.

“It’s a new concept and it’s hard to get a grasp on and it’s easy to be narrow-minded about it,” he said. “And that task force has really broad-thinkers (who are) able to think outside of the box.”

The task force next meets in September in Jackson Hole and will meet a third time before the 2020 general session, though the date and place are undetermined.

As a task force of both legislators and non-legislators, the group cannot sponsor bills. Instead, the task force will present recommendations to the relevant committees — for the blockchain task force, likely the Minerals, Business and Economic Development or Corporations, Elections and Political Subdivisions committees — which can in turn sponsor legislation.

The other members of the blockchain task force include Reps. Tyler Lindholm, R-Sundance, and Jared Olsen, R-Cheyenne and gubernatorial appointees Matthew Kaufman, Caitlin Long and David Pope.

To read more in the Laramie Boomerang, click here.

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