Privacy & Information Security Law Blog

As reported on the Blockchain Legal Resource, California Governor Jerry Brown recently signed into law Assembly Bill No. 2658 for the purpose of further studying blockchain’s application to Californians. In doing so, California joins a growing list of states officially exploring distributed ledger technology.

Specifically, the law requires the Secretary of the Government Operations Agency to convene a blockchain working group prior to July 1, 2019. Under the new law, “blockchain” means “a mathematically secured, chronological and decentralized ledger or database.” In addition to including various representatives from state government, the working group is required to include appointees from the technology industry and non-technology industries, as well as appointees with backgrounds in law, privacy and consumer protection.

Under the new law, which has a sunset date of January 1, 2022, the working group is required to evaluate:

• the uses of blockchain in state government and California-based businesses;
• the risks, including privacy risks, associated with the use of blockchain by state government and California-based businesses;
• the benefits associated with the use of blockchain by state government and California-based businesses;
• the legal implications associated with the use of blockchain by state government and California-based businesses; and
• the best practices for enabling blockchain technology to benefit the State of California, California-based businesses and California residents.

In doing so, the working group is required to seek “input from a broad range of stakeholders with a diverse range of interests affected by state policies governing emerging technologies, privacy, business, the courts, the legal community and state government.”

The working group is also tasked with delivering a report to the California Legislature by January 1, 2020, on the potential uses, risks and benefits of blockchain technology by state government and California businesses. Moreover, the report is required to include recommendations for amending relevant provisions of California law that may be impacted by the deployment of blockchain technology.