US state of Vermont to recognize blockchain data in courts

Tuesday, 24 May 2016

The US state of Vermont is close to adopting legislation to recognize blockchain data in the court system. The relevant provision is part of Bill H868 (An act relating to miscellaneous economic development provisions) which is reportedly only awaiting the governor’s signature.


A report by the Vermont legislature published in January this year, acknowledged that "blockchain is a reliable way of confirming the party submitting a record to the blockchain, the time and date of its submission, and the contents of the record at the time of submission". At the time of publication, however, it found that the cost and challenges of using blockchain technology outweighed its benefits but went on to encourage its legal recognition as a way to create a "first mover" advantage for the state.

State senator Becca Balint introduced the bill following consultation as she was "intrigued by the notion of passing legislation that would declare that blockchain technology would be a valid form of verification of a document's authenticity".

What Bill H868 means in practice

In essence, the bill harmonizes blockchain data with Vermont's state law on the kinds of evidence admissible in court. Should the bill be passed, any document notarized using blockchain technology, is to be considered legally admissible in court and have full legal bearing, says DECBrief. According to Coindesk, the bill establishes that a document timestamped on a blockchain "shall be considered a record of regularly conducted business" when considered against the state's rules of evidence. The bill also establishes how the veracity of that certification can be challenged in court.

However, Rep Bill Botzow, Chair of the Vermont House Committee on Commerce and Economic Development has emphasized that the bill is to apply "only to documents as opposed to financial transactions".

What it means for practitioners

This development is important for practitioners and their clients as this technology has reportedly been used to certify physical objects such as artworks, precious stones and metals and even high-value footwear. It is furthermore likely that if it is successful in Vermont, the practice will spread to other states.



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