California State Legislature Passes Bill to Establish Blockchain Working Group

California’s AB 2658, a bill that calls for the establishment of a working group on blockchain technology, has passed both houses of the state legislature and will now head to the governor for approval, according to public documents.

The bill would would define blockchain as “a mathematically secured, chronological, and decentralized ledger or database,” and requires the Secretary of the Government Operations Agency to form a blockchain working group on or before July 1, 2019.

Per the bill, the group should consist of participants from both technology and non-technology industries, as well as appointees with a background in law, and representatives of privacy and consumer organizations.

The group should also include the State Chief Information Officer, the Director of Finance, or their designees, one member of the Senate, and one member of the Assembly.

By no later than July 1, 2020, the group must submit their study to the Legislature “on the potential uses, risks, and benefits of the use of blockchain technology by state government and California-based businesses.”

The report should include recommendations for modifications to the definition of blockchain and for amendments to other code sections that may be impacted by the deployment of blockchain technology, in particular:

“(1) The uses of blockchain in state government and California-based businesses; (2) The risks, including privacy risks, associated with the use of blockchain by state government and California-based businesses; (3) The benefits associated with the use of blockchain by state government and California-based businesses; (4) The legal implications associated with the use of blockchain by state government and California-based businesses [...]”

Some other states have already signed bills into law that form blockchain working groups. In June, Connecticut governor Dannel Malloy signed SB 443 into law, which establishes a blockchain working group to study the technology and is also tasked with shaping a plan to “[foster] the expansion of the blockchain industry in the state.”

In May, the New York state legislature progressed a similar bill to create a blockchain task force. If created, the New York task force would prepare a report for the governor, the temporary president of the state senate, and the speaker of the assembly by December 2019.