Colorado Legislative Tech Caucus Delves into Blockchain Technology
This week, the Colorado Tech Caucus in cooperation with Colorado Technology Association convened to learn more about blockchain technology. There is a strong movement behind the use and expansion of blockchain, and with that comes the need to educate policy makers on how the technology works and how regulations may impact the industry.
Two blockchain related bills have already been introduced in the Colorado Legislature this session. Colorado Senate Bill 86 encourages the state of Colorado to utilize blockchain technologies to secure information. Colorado House Bill 1220 originally defined cryptocurrency and fiat currency and regulates persons who deal in cryptocurrency. However, this bill is currently being worked on in collaboration with stakeholders in the blockchain community and will differ from the introduced language.
Filament is a blockchain technology startup based in Reno, Nevada, with its second largest office in Colorado. In 2017, Filament worked with the Nevada Legislature to write and pass SB 398, a pro-innovation blockchain technology bill that served as the model for parts of SB 86 in Colorado. Wendy Stolyarov, Legislative Liaison for Filament, has been working with Colorado's legislators on 2018 blockchain policy and will be sharing fundamentals of blockchain and how it can help Colorado stay at the forefront of technology innovation.
Wendy gave an overview of what blockchain technology is and the benefits it has, such as creating new value, the ability to optimize ecosystems and to reduce risk. She also provided private use cases for blockchain such as fintech and energy sharing while public use cases include health records, infrastructure security and remote notarization. Wendy also posed the question, “What does good blockchain policy look like?” She said it should encourage both state and private use, provide a welcome mat for tech companies and reassure innovators of a business-friendly environment.
DATA was recently formed by a group of entrepreneurs to advocate for distributed ledger technology. They help shape public policy issues to support the growth of digital assets, digital identity, smart-contracts and digital currencies. DATA has recently helped pass several bills in the Wyoming legislature to try to make that state the blockchain hub of the U.S. Ally Medina with DATA gave the Tech Caucus an overview of how blockchain is being regulated and what states are doing regarding policy, noting that 10+ states are considering blockchain and cryptocurrency legislation in 2018, including Colorado.
Ally provided an analysis of states where regulations have been prohibitive for blockchain technology, including New York and Hawaii, as well as states that have had positive policies such as Delaware in passing SB 69 codifying the right to trade stocks on blockchain, as well as committing to using distributed ledger technology for state record keeping, and Nevada in passing SB 398.
The other state that is receiving a lot of attention and is now being called the blockchain hub of the U.S. is Wyoming. Wyoming has recently passed a slate of blockchain bills to encourage growth of the industry in the state. This legislation includes HB 70, which defines a utility token, or open blockchain token, as neither traditional money nor a security if it meets certain conditions; HB 19 exempts cryptocurrency from the Wyoming Money Transmitter Act; HB 101 allows for the recording and storage on a blockchain of common corporate records, filings, voting and accommodates the use of data addresses and electronic signatures; HB 126 allows the creation of series-LLCs compartmentalized within the general designation to isolate and allocate certain assets and or liabilities to specific members and SB 111 provides that virtual currency is not subject to taxation as property in Wyoming.
With two bills focused on blockchain technology already this legislative session and doubtless more to come, it is more important than ever to educate our policy makers on what this technology is, the possibilities of its uses and the need to structure policies carefully and with input from the industry. Colorado Technology Association assisted in facilitating this Tech Caucus discussion to do just that and will continue to engage on this and on issues impacting the tech community in Colorado.