Arizona adds blockchain technology to corporations law

Arizona signed House Bill 2603 to add a definition in Section 10-140, Definition – Arizona Revised Statutes (Section 10, Corporations and Associations)

In particular, now 10-140(53) reads:

53.  “WRITING” OR “WRITTEN” INCLUDES BLOCKCHAIN TECHNOLOGY AS DEFINED IN SECTION 44‑7061.

See https://legiscan.com/AZ/text/HB2603/id/1718691

The definition of “blockchain technology” is contained in Section 44-7061:

“distributed ledger technology that uses a distributed, decentralized, shared and replicated ledger, which may be public or private, permissioned or permissionless, or driven by tokenized crypto economics or tokenless. The data on the ledger is protected with cryptography, is immutable and auditable and provides an uncensored truth.”

The entire Section 44-7061 (Signatures and records secured through blockchain technology; smart contracts; ownership of information; definitions) is worth reading in full, because it governs the application of blockchain to signatures and contracts

 

Section 44-7061:

44-7061. Signatures and records secured through blockchain technology; smart contracts; ownership of information; definitions

A. A signature that is secured through blockchain technology is considered to be in an electronic form and to be an electronic signature.

B. A record or contract that is secured through blockchain technology is considered to be in an electronic form and to be an electronic record.

C. Smart contracts may exist in commerce. A contract relating to a transaction may not be denied legal effect, validity or enforceability solely because that contract contains a smart contract term.

D. Notwithstanding any other law, a person that, in or affecting interstate or foreign commerce, uses blockchain 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 that information as before the person secured the information using blockchain technology. this subsection does not apply to the use of blockchain technology to secure information in connection with a transaction to the extent that the terms of the transaction expressly provide for the transfer of rights of ownership or use with respect to that information.

E. For the purposes of this section:

1. “Blockchain technology” means distributed ledger technology that uses a distributed, decentralized, shared and replicated ledger, which may be public or private, permissioned or permissionless, or driven by tokenized crypto economics or tokenless. The data on the ledger is protected with cryptography, is immutable and auditable and provides an uncensored truth.

2. “Smart contract” means an event-driven program, with state, that runs on a distributed, decentralized, shared and replicated ledger and that can take custody over and instruct transfer of assets on that ledger.

Francesca GCrystal