BLOCKCHAIN TECHNOLOGY - U.S.

Focus States
o Connecticut
o Maine
o Mississippi
o Missouri
o New York
o Oklahoma
o Wyoming

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Contents

Title ….................................................................................................................. Page 1

Contents …........................................................................................................... Page 2
Overview ….......................................................................................................... Page 3
Blockchain Technology in Public Services U.S. …................................................. Page 9
Legislations - 7 Focused states …........................................................................ Page 10
Strategy/IT Roadmap …...................................................................................... Page 20
Conclusion …....................................................................................................... Page 31
Keywords …......................................................................................................... Page 32
References …....................................................................................................... Page 33

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OVERVIEW
1.Blockchain:

Definition:

A blockchain is a digital distributed ledger that does the following:

• Records any transaction or information chronologically, permanently and unalterably.
• Uses one-way hash cryptography that is computationally impractical to break.
• Is visible to all permissioned users.
• Uses Peer-to-Peer transmission, with each node forwarding new transactional information to all others.
• Can trigger transactions automatically, based on business logic and custom algorithms.
• Verifies transactions through node (network of computers) consensus with no reliance on third-party
intermediaries.

Benefits:
• All records are Public, which increases transparency and reduces redundant work.
• Eliminates Intermediary fees (Banks, Government, Any other 3rd Party).
• No hacking/fraud due to use of Hash algorithm, makes a blockchain network immutable.
• Transaction is very fast, ranging from few seconds to few minutes which (Quicker turnaround time).

Technology used:

Blockchain is a combination of 3 technologies:

(1) Cryptography (Concept from Communications Security)
(2) Peer to Peer (P2P) networking (Concept from Computer Networking)
(3) Game Theory (Concept from Operational Research)

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Note - Distributed ledger in blockchain are time stamped/created using consent mechanism.

Types of Blockchain:
(1) Public - E.g. Cryptocurrencies like Bitcoin, Ethereum, Litecoin, Tether.

 It is decentralized and works on Proof of Work (POW) and Proof of stake (POS) mechanism.
 Open source and transparent, anyone can access (Permission less).
 Anyone can participate in decision making.

(2) Private - E.g.- Multichain.

 Not decentralized but still distributed and creation of own cryptocurrencies.

 Selective access (Permissioned) to read/write.
 Autonomous decision making

(3) Consortium/Hybrid/Federated - E.g. - R3 Corda.

 Partially decentralized.
 Selective access (permissioned) to read/write.
 Group of members involved in decision making.

Frameworks (important):
(1) Ethereum
• Cryptocurrency used is Ether and transactions are public.
• It is world’s 1st Smart Contract Platform (Open source distributed cloud).
• Along with tracking the transactions, it also programs the transaction.

(2) Hyperledger

• Developed by Linux foundation.

• It has open source, modular architecture targeted at businesses that aims to streamline their processes,
leveraging blockchain technology.

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• Hyperledger Fabric V1 is intended as a foundation for developing applications or solutions with a modular
architecture.

(3) R3 Corda

• Corda is open source platform.

• Data is shared among only genuine participants.

Smart Contracts:

• It is a digital contract which was introduced in 1997.

• Software that controls movement of digital assets among parties, based on certain rules of negotiation.
• It is Immutable and distributed.
• Solidity is the Programming language used in Etherium smart contract.
• Elimination of 3rd party intervention.
• Tracable, irreversible, self-enforcing and self-executing transactions.
Hyperledger Fabric v1:

• It is a modular, scalable and secure blockchain platform.

• It gives flexibility to hide transactions from third parties who don’t need to know some information.
• It is a permissioned blockchain network.
Corda:

• It is an open source platform.

• It is a Distributed Ledger Technology (DLT), with a difference.
• It can best leverage Financial Service Industry.
• Tailors smart contracts.

Impact on top 20 industries:

Finance Supply chain Banking Forecasting

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 IOT & Networking Insurance Private Transport Agriculture
Cloud storage Charity Voting Government
Healthcare Energy Online music Retail
Public Benefits Real Estate Crowdfunding Aerospace & Defense
2.Blockchain in U.S.

Timeline:

• In 2016, Blockchain disrupted U.S Post office services. Office of Inspector General, US Postal Service
published a report. In that report it was mentioned that Mainstream banks, governments, and other
companies started experimenting on blockchain technology that year. These entities were focusing on, how to
use Blockchain technology in financial applications and in new application areas such as property transfers,
authentication services, and records management.

• In 2017 at Federal level, U.S. Food and Drug Administration (FDA) and the U.S. Department of Defense (DOD)
Transportation have shown interest in Blockchain technology.

• In 2018 Several States of United States advanced towards legalization of Bitcoins. Various crypto-friendly
bills have been introduced with the approval of state legislatures.

• In 2019, ITIF (Information technology & Innovative Foundation) released “Policymakers Guide” better help
stem confusion and inform future implementations of blockchain technology. The report recommends the use
of blockchain technology at all levels of government, namely for functions that require an immutable record,
high levels of transparency, and decentralized authority. While blockchain may not be a panacea, there are
numerous uses in applications for which it is well-suited, such as supply chain management, identity
management, and voting.

• In 2020 during pandemic in March, U.S. Department of Homeland Security (DHS) listed Blockchain as “Covid
19 Critical service”, because it can accurately track and trace the movement of goods in a supply chain .

Market:

• Global market size of Blockchain in 2020 is 3 Billion USD and is expected to grow to 39.7 Billion USD by 2025
with a CAGR of 67.3 % during 2020-2025. (Source - markets&markets.com)

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• Today Coinbase is the biggest and most respected Bitcoin platform in the United States. It offers both an
exchange and wallet in one, making it one of the easiest places to start with Bitcoin. Coinbase also supports
Bitcoin Cash, Ethereum, and Litecoin.

• Major Growth drivers of blockchain in U.S. are:

(1) Growing adoption of distributed ledger among banking and financial institutes.

(2) Rising market capitalization of cryptocurrencies.

(3) Increasing venture capital investment in Blockchain and ICOs.
(4) Benefits offered by the technology.

Classification of Blockchain Applications:

(1) Cryptocurrency
(2) Blockchain ledgers
(3) Creation of marketplace for goods or services
(4) Establishment the authenticity of goods or data
(5) Services to give users more control over data or services
(6) Action Automation, e.g. Smart contracts

Source Policymaker’s guide 2019

• Ensure technology neutrality.

• Actively support blockchain adoption and deployment in the public sector.

• Support blockchain research and development.

• Promote legal certainty for blockchain applications.
• Set rules for blockchains at the national, not subnational, level.
• Create a flexible regulatory environment that enables experimentation.
• Use targeted regulatory enforcement to incentivize companies to protect consumers.
• Avoid laws and regulations that prevent the use of blockchain technology.

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• Promote data interoperability for blockchain applications.
• Work to set up international harmonization of blockchain regulations across section.

Source - itif.org

Blockchain Technology in Public Services U.S.

1.Introduction:

• The management of public services is an area where blockchain can help lessen paper-based processes,
minimize fraud, and increase accountability between authorities and those they serve.

• Vermont was the first state to pass a bill for Blockchain Technology opportunities and risk assessment in
2015.

• Some U.S. states took it upon themselves to realize the benefits of blockchain: the Delaware Blockchain
Initiative, launched in 2016, aimed to create a proper legal infrastructure for distributed ledger shares, to
increase efficiency and speed of incorporation services.

•Later in 2016 Illinois, Vermont, and few other states announced similar initiatives.

• Startups like BitFury Group started working with the Georgian government to secure and track government
records.

2. States Currently using Blockchain Technology -Examples

Vermont - The first government-sanctioned, blockchain recorded real estate deal in U.S. took place in
Vermont, due to its proactive stance on distributed ledger technology.

Delaware - Blockchain Initiative launched in 2018. The same year, Delaware officials began exploring
incorporating blockchain into different components of corporate filing processes. Now, Delaware uses
blockchain technology to streamline business registry. The Uniform Commercial Code (UCC) blockchain
automates the release and renewal of UCC filings and associated collateral.

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Wyoming - Legislature passed legislation (SF0125) that amended Article 9 of the Wyoming Uniform
Commercial Code to define digital assets that utilize blockchain and distributed ledger technology.

Illinois - Blockchain Initiative tested a blockchain-based birth registry pilot, to investigate a secure, self-
sovereign identity for Illinois citizens. Then it investigated five blockchain projects, including property deed
recording, academic credentialing, health provider registries, an energy credit marketplace, and securing vital
records.

Arizona - Enacted a law (HB - 2417) explicitly granting smart contracts the same legal effect, validity, and
enforceability as their standard contract counterparts.

Georgia - Using blockchain to register land titles and validate property related government transactions.

3.Advantage in Public Services

Government:
Systems are slow, opaque and prone to corruption. Thus, advantage of blockchain technology are:
• Reduction in Bureaucracy.
• Increase in security, efficiency and transparency of the transactions.

Public Benefits:
• Blockchain Technology can help, verify and distribute benefits faster and securely.

4.Challenges faced by states:

(1) The key factor that is restraining the market growth is the lack of technical skill.

(2) The legacy system in the United States hinders the entry of fund needed to finance Blockchain innovation
and utilization of the technology.

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Legislations - 7 Focused States

(1) State: Connecticut

Sl.No. Bill no. Date Bill Summary

 Establishes the Connecticut blockchain working group.

Signed by  Develops a master plan for fostering the expansion and
1 S.B. 443 governor on growth of the blockchain industry in the state.
6/6/18, Special  Recommends policies and state investments to make
Act 18-8 Connecticut the world leader in blockchain technology.

2 S.B. 513 Introduced on  Studies the impact that digital currency, blockchain and
04/17/18 smart contracts have on state law and businesses.

 Develop a plan to incorporate blockchain technology –

3 SB 1032 Introduced on Distributed Ledger Technology to make a state
04/03/19 administrative function more efficient by Oct. 1, 2020.

 Establishes a task force to study on blockchain technology

4 HB 5417 Passed House on for use in managing elector registration, including for the
5/22/19 purpose of reducing duplicate registrations within the
ledger upon which elector information is stored.

Signed by  Adds a definition for "virtual currency" and purports to

5 HB 5490 governor bring virtual currencies under the purview of Connecticut
06/14/18 money transmission laws.

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 Introduced on  An act concerning Noncompete agreement in the
6 HB 5210 02/20/20. Bill is Blockchain technology Industry.
Pending.

Sl.No. Bill no. Date Bill Summary

Introduced on  Establishes a sandbox program that shall enable a person

7 03/09/20. Bill has to obtain limited access to the market in this state to test
HB 5489 been assigned to innovative financial products or services without obtaining
Joint Committee a license or other authorization that otherwise might be
on Commerce. required.

S.B. 443 - Provision Summary

Master plan to:
(1) Identify the economic growth and development opportunities presented by blockchain technology.
(2) assess the existing blockchain industry in the state.
(3) review workforce needs and academic programs required to build blockchain expertise across all relevant
industries.
(4) make legislative recommendations that will help promote innovation and economic growth by reducing
barriers to and expediting the expansion of the state's blockchain industry.

S.B. 513 - Provision Summary

Study for the examination of:
(1) The current application of state statutes and regulations to digital currency and whether any further
regulation of the use and regulation of digital currency is desirable in the state.
(2) Economic growth and development opportunities presented by new digital currency, blockchain and smart
contract technologies through the establishment of digital currency limited liability companies, particularly
those that operate their own networks.

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(3) The potential use and adoption of new policies by state and municipal governments to adopt and integrate
digital currency, blockchain and smart contract technologies.
(4) Revisions to state statutes and regulations that will help promote innovation and economic growth through
the use and adoption of digital currency, blockchain and smart contract technologies.

S.B. 1032 - Provision Summary

(1) This bill requires the Office of Policy and Management (OPM) secretary to develop a plan to incorporate
blockchain technology to make a state administrative function more efficient by Oct. 1, 2020, and in
consultation with the Department of Administrative Service’s Division of Information Technology’s chief
information officer.
(2) By Oct. 1, 2021, the OPM secretary must submit the plan to the Commerce and Government
Administration and Elections committees.

H.B. 5417 - Provision Summary

There is established a task force to study the feasibility of using blockchain technology to manage elector
information. Such study shall include:
(1) An examination of the feasibility of implementing such technology in the state.
(2) Which current election administration processes would need to be changed in order to use such
technology.
(3) Any potential costs and benefits.
(4) Including any potential issues such as security concerns.
(5) Related to implementing such technology to manage elector information for state or municipal elections.

H.B. 5490 Provision Summary

(1) Virtual currency shall be construed to include digital units of exchange that:
(A) have a centralized repository or administrator.
(B) are decentralized and have no centralized repository or administrator.
(C) may be created or obtained by computing or manufacturing effort.

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(2) Virtual currency shall not be construed to include digital units that are used.
(i) solely within online gaming platforms with no market or application outside such gaming platforms
(ii) exclusively as part of a consumer affinity or rewards program.
(iii) can be applied solely as payment for purchases with the issuer or other designated merchants but cannot
be converted into or redeemed for fiat currency.

H.B 5210 - Provision Summary

Any Blockchain technology employee:
(1) Refrain from obtaining employment in a specified geographical area for a specified period after
termination of employment with such blockchain technology industry employer.
(2) Disclose the terms or conditions of an offer of employment, or the existence of any such offer, from any
other blockchain technology industry employer following the expiration of the term of the employment
contract.
(3) Agree to enter a subsequent employment contract with the blockchain technology industry employer, or
extend or renew the existing employment contract, upon the same terms and conditions offered by a
prospective employer.
(4) Applicable for Employees who entered, renewed or extended contract on or after July 1, 2020.

H.B. 5489 - Provision Summary

A description of the innovative product or service to be tested, including statements regarding the following:
(1) How the innovative product or service is subject to licensing or other authorization requirements outside
of the regulatory sandbox.
(2) how the innovative product or service would benefit consumers.
(3) how the innovative product or service is different from other products or services available in this state.
(4) what risks may confront consumers that use or purchase the innovative product or service.
(5) how participating in the regulatory sandbox would enable a successful test of the innovative product or
service.

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(6) a description of the proposed testing plan, including estimated time periods for beginning the test, ending
the test and obtaining licensure or authorizations after the testing is complete.
(7) a description of how the applicant will end the test and protect consumers if the test fails.
(8) how the applicant will employ cybersecurity measures to avoid breaches and protect consumer and
transaction data.

Note - Smart contract related bills in legislation fail to pass or die in committee till now.

(2) State: Maine

Sl.No. Bill no. Date Bill Summary

 This resolve establishes the Commission to Study Using

1 L.D. 950 Introduced Blockchain Technology in Conjunction with Paper Ballots in
03/09/17 Maine Elections.

 Directs the commissioner of Economic and Community

2 L.D. 909 Introduced Development to establish a blockchain technology working
02/19/19 group.

L.D. 950 - Provision Summary

(1) That the commission shall study the potential uses for blockchain technology to support and enhance
Maine's current paper ballot election system for the purpose of improving paper ballot security, increasing
election transparency and reducing costs.

L.D. 909 - Provision Summary

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The commissioner shall establish a working group to develop a master plan for fostering the expansion of the
blockchain technology industry in the State and recommend policies and investments to make the State a
leader in blockchain technology. Master plan includes:
(1) Working group to study about digital ledger which uses cryptography.
(2) Identification of the economic growth and development opportunities presented by blockchain technology.
(3) Assessing existing blockchain technology in the State.
(4) Reviewing workforce needs, and academic programs required to build blockchain technology expertise
across all relevant industries.
(5) Making recommendations of policies and investments that will help promote innovation and economic
growth by reducing barriers to and expediting the expansion of the State's blockchain technology industry.
(6) Commissioner to submit the master plan to the joint standing committee of the Legislature having
jurisdiction over innovation, development, economic advancement and business matters by December 2,
2020.

(3) State: Mississippi

(1) There is No blockchain related legislation placed or pending in Mississippi as of July 2020.

(2) The State's Money Transmitter laws do not explicitly include "virtual currencies," but does include the
concept of "monetary value" as a medium of exchange.
(3) The State requires a license for the transmission of monetary value, but the Mississippi Department of
Banking and Consumer Finance has not published guidance as to its applicability on virtual currencies.

(4) State: Missouri

Sl.No. Bill no. Date Bill Summary

 Establishes regulations for financial institutions providing

Introduced services for digital assets.
1 H.B.1109 02/07/17  The proposed statutory changes include ownership
representation via use of a blockchain, certificate tokens,
network signatures.

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H.B. 1109 - Provision Summary

(1) Relates to certificate tokens, defined as a representation of shares that are stored in an electronic format
and contains information entered into a blockchain or other secure, auditable database, linked to or
associated with the certificate token, and able to be transmitted electronically to the issuing corporation, the
person to whom the certificate token was issued, and any transferee.
(2) The bill requires each certificate to state on its face the name of the person to whom it is issued.
(3) Any reference to a certificate being duly endorsed shall be construed to mean that the transaction
authorizing transfer of control of the certificate token was signed by the lawful holder of the token with the
network signature corresponding to the lawful holder's data address.

(5) State: New York:

Sl.No. Bill no. Date Bill Summary

 Creates the digital currency task force to provide the

1 AB 8783 Signed by governor and the legislature with information on the
SB 9013 governor on potential effects of the widespread implementation of
12/21/18 digital currencies on financial markets in the state.

 Relates to allowing signatures, records and contracts

secured through blockchain technology to be considered in
2 AB 1683 Passed Senate an electronic form and to be an electronic record and
SB 4142 4/9/19 signature
 allows smart contracts to exist in commerce.

 Relates to the development and creation of distributed

ledger technology, which is a mathematically secured,
chronological, and decentralized consensus ledger or
database.
3 AB 1398 Passed Senate  DLT maintained via internet interaction, peer-to-peer
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 SB 6037 6/17/19 network, or others.
 DLT use to authenticate, record, share and synchronize
transactions in their respective electronic ledgers or
databases, and business entities that develop distributed
ledger technology.

 Directs the state board of elections to study and evaluate

4 AB 1351 Passed Senate the use of blockchain technology to protect voter records
SB 6036 6/18/19 and election results.

AB 8783/ SB 9013 - Provision Summary

(1) Establishes the New York State digital currency task force.
(2) States who the task force shall be comprised of.
(3) lists the responsibilities and roles of the taskforce.
(4) Act shall take effect immediately and shall be deemed repealed on December 15, 2020.

AB 1683/ SB 4142 - Provision Summary

(1) Adds a new section 310 to the state technology law allowing:
(a) A signature secured through blockchain technology to be accepted as an electronic signature.
(b) A record or contract through blockchain technology to be accepted as an electronic record.
(c) Provision of smart contracts and it’s enforceability.
(2) Maintains a person's right to ownership and use of information secured using blockchain technology for
interstate or foreign commerce.

AB 1398/ SB 6037 - Provision Summary

(1) This bill would amend the Economic Development Law to add "digital ledger technology" into the
definitions of businesses engaged in "financial services data centers or financial services customer back office
operations" and "software development" with in the Excelsior Jobs Program.
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(2) During the application and approval commissioner of the Department of Economic Development strive for
broad regional geographic representation within the program.
(3) The Commissioner would also be directed to promote diverse ownership and workforces of participating
businesses through outreach to businesses owned by people with disabilities, minority- and women-owned
businesses and veteran-owned businesses.

AB 1351/ SB 6036 - Provision Summary

(1) Authorizes the State Board of elections to study the use of blockchain technology to protect vote records
and results.
(2) States that exactly one year after the effective date, the board shall submit a report to the governor and
the legislature of their findings.
(3) Lists the fields in which they evaluate with the help of experts.

(4) Act shall take place immediately.

(6) State: Oklahoma:

Sl.No. Bill no. Date Bill Summary

 Relates to electronic records.

1 SB 700 Signed by  Relates to the Uniform Electronics Transactions Act.
governor 4/25/19,  Modifies certain definitions.
Chap 177

S.B. 700 - Provision Summary

Amendment in definition of:
(1) "Automated transaction " means a transaction conducted or performed, in whole or in part, by electronic
means or electronic records, in which the acts or records of one or both parties are not reviewed by an
individual in the ordinary course in forming a contract, performing under an existing contract, or fulfilling an
obligation required by the transaction.
(2) "Certification authority" means a person who issues a certificate for a digital signature.

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(3) "Digital signature" means a type of electronic signature consisting of a transformation of an electronic
message using an asymmetric crypto system such that a person having the initial message and the signer's
public key can accurately determine whether:
(A) The transformation was created using the private key that corresponds to the signer's public key.
(B) The initial message has not been altered since the transformation was made.
(4) "Electronic record" means a record created, generated, sent, communicated, received, or stored by
electronic means. A record or contract that is secured through blockchain technology is considered to be, in an
electronic form and to be an electronic record.

(7) State: Wyoming:

Sl.No. Bill no. Date Bill Summary

Signed by  Creates a blockchain task force to identify governance

H.B. 1 governor 3/14/18 issues related to blockchain technology and develop
2018 with line item veto appropriate legislation to be recommended to one or more
3/14/18, Chap appropriate legislative committees for consideration.
1 134.  In 2019 taskforce members list changed. Three members of
H.B. 1 the senate, three members of the house of
2019 Signed by representatives, and four of the legislative members of the
governor with line task force shall be from the same political party.
item vetoes
2/26/19, Chap 80.

 Relates to the Wyoming Business Corporations Act

 Authorizes corporations to use electronic networks or
databases for the creation or maintenance of corporate
records.
 Authorizes the use of a network address to identify a
corporation's shareholder
2 H.B. 101 Signed by  Authorizes corporations to accept shareholder votes if
governor 3/10/18, signed by a network signature that corresponds to a
Chap 47. network address.
 Specifies requirements for use of electronic networks or
databases.

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  Requires the secretary of state to review its rules for
consistency with this act.

 Create a "new type of Wyoming financial institution that

has expertise with customer identification, anti-money
laundering and beneficial ownership requirements could
seamlessly integrate these requirements into its operating
H.B 70 Signed by model.
3 governor 2/26/19,  Authorizes special purpose depository institutions to be
Chap 94 chartered in Wyoming that will provide a necessary and
valuable service to blockchain innovators
 Emphasizes Wyoming's partnership with the technology
and financial industry and to safely grow this state's
developing financial sector.
 Supports Utility Tokens Bills.

 Relates to banking
 Makes legislative findings
 Creates special purpose depository banks as a new
4 HB 74 Signed by financial institution
governor 2/26/19,  Provides that special purpose depository banks shall be
Chapter 92 corporations
 Requires that depositors be business entities
 Specifies compliance with applicable federal laws
 Establishes procedures for the incorporation, chartering
and operation of special purpose depository bank.

 Relates to corporate shares and distributions

5 HB 185 Signed by  Authorizes corporations to issue certificate tokens in lieu of
governor 2/26/19, stock certificates as specified
Chap 93  Makes conforming amendments.

H.B. 1 - Provision Summary

(1) Created the blockchain task force consisting of 10 members.

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(2) The task force shall identify governance issues related to blockchain technology and develop appropriate
legislation to be recommended.
(3) The task force shall be staffed by the legislative service office.
(4) The task force shall terminate on January 1, 2020.
(d) There is appropriated twenty thousand dollars ($20,000.00) from the general fund to the legislative service
office for the period beginning with the effective date and ending June 30, 2020.

H.B. 101 - Provision Summary

(1) If the name or network signature signed on a vote, consent, waiver, or proxy appointment corresponds to
the name or data address of a shareholder, the corporation if acting in good faith is entitled to accept the
vote, consent, waiver, or proxy appointment and give it effect as the act of the shareholder.
(2) One or more shareholders may create a voting trust, conferring on a trustee the right to vote or otherwise
act for them, by signing an agreement setting out the provisions of the trust.
(3) When a voting trust agreement is signed, the trustee shall prepare a list of the names and addresses
identities of all owners of beneficial interests in the trust, together with the number and class of shares each
transferred to the trust.

H.B. 70 - Provision Summary

(1) Not later than December 31, 2021, the secretary of state may develop and implement an industry leading
filing system through which all required filings.
(2)The secretary of state shall endeavor to use blockchain technology and include an application programming
interface as components of the filing system, as well as robust security measures and other components
determined by the secretary of state to be best practices or which are likely to increase the effective and
efficient administration of the laws of this state.
(3) The secretary of state may create a blockchain for the purposes of this section or contract for the use of a
privately created blockchain.
(4) The secretary of state may consult with all interested parties before developing the filing system including
businesses, registered agents, attorneys, law enforcement and other interested persons and If possible,
partner with technology innovators and private companies to develop necessary components of the system.

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H.B. 74 - Provision Summary
(1) Provision Relates to the secretary of state.
(2) Authorizes the secretary of state to develop and implement a blockchain commercial filing system.
(3) Authorizes a report.
(4) Makes an appropriation.

H.B. 185 - Provision Summary

(1) Share certificate, share, stock, share of stock or words of similar import shall be construed to include a
certificate token.
(2) A requirement to print information on a share certificate or words of similar import shall be construed to
be satisfied if the information satisfies the requirements set forth.
(3) Certificated shares or words of similar import shall be construed to include shares represented by
certificate tokens, and any reference to the delivery or deposit of these shares to the corporation shall be
construed to refer to any method of granting control of the tokens to the corporation.
(4) A certificate being duly endorsed or words of similar import shall be construed to mean that the
transaction authorizing transfer of control of the certificate token was signed by the lawful holder of the token
with the network signature corresponding to the lawful holder's data address.

Analysis:
State to focus with respect to legislature findings above, could be in order of:

(1) Wyoming (2) Connecticut (3) New York (4) Oklahoma (5) Maine (6) Missouri (7) Mississippi

Note
(1) No. of active bills in New York > Connecticut. The above ranking is based on number of bills passed.
(2) No legislation bills related to Blockchain have been placed/pending in Mississippi yet.

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Strategy/IT Roadmap

Connecticut:

 House Bill 7141 became law on October 1, 2017 and requires that anybody engaged in a financial
services industry be licensed by the state. "Each licensee that engages in the business of money
transmission in this state by receiving, transmitting, storing or maintaining custody or control of virtual
currency on behalf of another person shall at all times hold virtual currency of the same type and
amount owed or obligated to such other person". The bill defines virtual currency as "any type of
digital unit that is used as a medium of exchange or a form of digitally stored value or that is
incorporated into payment system technology." H.B. 7141, 2017 Leg., 2017 Jan. Reg. Sess. Gen. Ass.
(Conn. 2017).

 House Bill 5490 was signed into law on June 14, 2018. It adds a definition for "virtual currency" and
purports to bring virtual currencies under the purview of Connecticut money transmission laws. H.B.
5490, 2018 Leg., 2018 Feb. Sess. Gen. Ass.

 The state legislature signed SB 443 into law, which is entitled, "An Act Establishing the Connecticut
Working Group." The goal of this bill is to "(1) Identify the economic growth and development
opportunities presented by blockchain technology; (2) assess the existing blockchain industry in the
state; (3) review workforce needs and academic programs required to build blockchain expertise
across all relevant industries; and (4) make legislative recommendations that will help promote
innovation and economic growth by reducing barriers to and expediting the expansion of the state's
blockchain industry."

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  The Connecticut House introduced a bill to "(1) make shared appreciation agreements subject to the
same licensing and regulatory compliance requirements as residential mortgage loans, and (2) permit a
start-up company engaged in the activity of a money transmission to provide a statement of condition
as part of licensure application in lieu of certain financial statements." Such statement must describe
"the type of money transmission business that will be conducted by the applicant in this state and
whether such money transmission will include the transmission of monetary value in the form of
virtual currency." 2019 CT H.B. 6995 (NS).

 Other notable blockchain-focused proposals from Connecticut's legislature include:

(1) An act stating that, "on or before October 1, 2019, the Department of Administrative Services shall
develop and issue a request for proposals to incorporate blockchain technology to make the
administration of a department function more efficient." 2019 CT S.B. 1032 (NS) March 7, 2019.
(2) An act "to study the use of blockchain technology in managing elector information." 2019 CT H.B. 5417
(NS) January 16, 2019.
(3) An act "requiring the secretary of the office of policy and management to develop a plan to incorporate
blockchain technology in the administration of a state function." 2019 CT S.B. 1032 (NS).

(4) In February 2020, the state legislature introduced House Bill 5210 which would "prohibit the use of
noncompete agreements in the blockchain technology industry." H.B. 5210, 2020 Leg., 2020 Feb. Reg.
Sess. Gen. Ass. (Conn. 2020).

Maine:

 The senate introduced a bill that would amend the state Money Transmitter Act to include digital
currencies in the definition of money transmission. This would allow the bureau of Consumer Credit
Protection the ability to regulate transmission of digital currencies. S.P. 599, 129 Leg., 1st Reg. Sess.
(Me. 2019). The State Office of Consumer Credit Protection has not published any guidance.

 In February 2019, the Maine House introduced as resolution, H.P. 673, which "directs the
Commissioner of Economic and Community Development to establish a working group to develop a
master plan for fostering the expansion of the blockchain technology industry in the State and
recommend policies and investments to make the State a leader in blockchain technology." H.P. 673,
129th Leg., 1st Reg. Sess. (Me. 2019). However, the resolution did not pass.

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Mississippi:

 The State's Money Transmitter laws do not explicitly include "virtual currencies," but does include the
concept of "monetary value" as a medium of exchange. The State requires a license for the
transmission of monetary value, but the Mississippi Department of Banking and Consumer Finance has
not published guidance as to its applicability on virtual currencies.

Missouri:

 The State's consumer credit laws do not explicitly include "virtual currencies" or "monetary value" and
the State's Division of Finance has not published guidance on virtual currency regulations.

 A bill filed in the Missouri House of Representatives would make it illegal to use blockchain to store
firearm owner data in the state. See H.R. 1256, 99th Gen. Assembly, 2d Reg. Sess. (Mo. 2017).
However, the bill died in March 2018.

 In a letter ruling, the Missouri Department of Revenue determined that an ATM provider "is not
required to collect and remit sales or use tax upon transfer of Bitcoins through their ATM," because
sales and use taxes are imposed solely on items of tangible personal property. Missouri Department of
Revenue, LR 7411, Collection of Sales Tax on Bitcoin Transfers Through an Automated Teller Machine
(ATM), (September 12, 2014), Further, in a cease and desist order issued by the Office of the Secretary
of State in June 2014, the Commissioner of Securities determined that offering and/or selling shares of
stock in Bitcoin constituted "transacting business as an agent" in the state of Missouri.

 In February 2019, the Missouri House introduced H.B. 1159, which "establishes regulations for financial
institutions providing services for digital assets." The proposed statutory amendments include the
addition of definitions for "automated transaction," "digital asset," "digital consumer asset," "digital
security," and "open Blockchain token." H.B. 1159, 100th Gen.

 Assembly, 1st Reg. Sess. (Mo. 2019). During this same month, the House also introduced a bill that
"changes the law regarding the issuance of stock by corporations." The proposed statutory changes
include ownership representation via use of a blockchain, certificate tokens, and network signatures.
H.B. 1109, 100th Gen. Assembly, 1st Reg. Sess. (Mo. 2019).

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  In March 2019, the Missouri House introduced H.B. 1247, which "requires the state and political
subdivisions thereof to accept virtual currency as legal tender." H.B. 1247, 100th Gen. Assembly, 1st
Reg. Sess. (Mo. 2019).

 A variety of tax bills are also proposing that the "providing a virtual currency that purchasers are
allowed or required to use to purchase products from the marketplace seller" qualifies a person or
business as a "marketplace facilitator" for state tax collection and remittance purposes. E.g., H.B. 1207,
100th Gen. Assembly, 1st Reg. Sess. (Mo. 2019); H.B. 548, 100th Gen. Assembly, 1st Reg. Sess. (Mo.
2019); H.B. 479, 100th Gen. Assembly, 1st Reg. Sess. (Mo. 2019); H.B. 2172, 100th Gen. Assembly, 2nd
Reg. Sess. (Mo. 2020); S.B. 872, 100th Gen. Assembly, 2nd Reg. Sess. (Mo. 2020); H.B. 1967, 100th Gen.
Assembly, 2nd Reg. Sess. (Mo. 2020).

New York:

 The New York State Department of Financial Services established a comprehensive regulatory
framework for virtual currency businesses called "BitLicense" that requires operations related to
transactions involving any form of virtual currency to obtain a license from the state. 23 NYCRR 200.
Before being granted a license, the state requires applicants to have strict compliance and supervisory
policies and procedures in place, including, among other things, anti-money laundering/know-your-
customer and cybersecurity programs in place.

 Since its enactment in 2015, the regulatory scheme has been the subject of much criticism and has
resulted in an exodus of businesses fleeing the state because of the costs and regulatory hurdles
associated with the BitLicense.

 In late 2016, Theo Chino, a well-known Bitcoin entrepreneur filed a petition to the Supreme Court of
New York challenging the authority of the state's Department of Financial Services to use the Bitcoin
community as guinea pigs to test new banking regulations, arguing that under Article 78 of the State of
New York regulations must be preceded by a law enacted by the Legislature.

 In response to critics, on June 24, 2020, the New York State Department of Financial Services ("NYDFS")
proposed a conditional licensing framework for virtual currency business entities so that these entities
can participate in the coin listing process for licensed exchanges while their Bit License is being
evaluated.

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 The regulator plans to release new guidance and documentation to assist applicants, letting applicants
receive conditional licenses if they partner with already-licensed entities to conduct licensed
exchanges. NYDFS also announced NYDFS signed a Memorandum of Understanding ("MoU") with the
State University of New York, allowing crypto startups to visit any of the university's 64 campuses to
seek assistance in writing their application or starting their business. See.

 A.B. 8783 was adopted in 2018, which creates a digital currency task force to determine the impact of
cryptocurrencies on New York financial markets. A.B. 8783, 240th Leg., Reg. Sess. (N.Y. 2018).

 In January 2019, the Senate introduced a bill that would increase the members of the task force from 9
to 13. S.B. 1194, 242nd Leg., Reg. Sess. (N.Y. 2019).

 Another bill regarding task force creation was introduced in January 2019, which would require the
task force to study the following: (1) the steps New York "must take to produce and release a state-
issued cryptocurrency and how such will affect" the SEC and CFTC's jurisdiction over economic
transactions; (2) "the implications of issuing such cryptocurrency on monetary policy and financial
stability; (3) how local, state, and federal taxation would be affected by such; and "the measures other
jurisdictions, central banks, international governing bodies, states, or countries, have taken to
potentially issue cryptocurrency." S.B. 4562, 242nd Leg., Reg. Sess. (N.Y. 2019).

 Relevant to the financial market, another bill was introduced to establish a financial technology
regulatory sandbox program to test financial technology products, including "cryptocurrency business
activity." A.B. 2213, 242nd Leg., Reg. Sess. (N.Y. 2019). A.B. 1351, if adopted, will direct the study of the
use of blockchain technology to protect voter records and election results. A.B. 1351, 242nd Leg. (N.Y.
2019).

 A bill was introduced in January 2019, which would allow "New York state agencies to accept
cryptocurrencies as a form of payment." A.B. 1500, 242nd Leg., 2019 Reg. Sess. (N.Y. 2019).

 Another bill introduced in June 2019 would recognize electronic contact by an owner as written
contact and include unclaimed virtual currency within the definition of abandoned property. A.B. 8314,
242nd Leg. (N.Y. 2019).

 With respect to blockchain technology and applications, several bills were introduced in the first
quarter of 2019 which includes:
(1) Allowing signatures, records and contracts secured through blockchain technology to be considered in
an electronic form and to be an electronic record and signature" and "allowing smart contracts to exist in
commerce." S.B. 4142, 242nd Leg. (N.Y. 2019).

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(2) The creation of an "office of financial resilience" of which one responsibility would be "to advocate on
behalf of blockchain startups and companies focused on building and supporting local economies." A.B.
2239, 242nd Leg., Reg. Sess. (N.Y. 2019).

(3) The establishment of a task force "to study and report on the potential implementation of blockchain
technology in state record keeping, information storage, and service delivery." A.B. 1371, 242nd Leg., Reg.
Sess. (N.Y. 2019).

(4) The creation of a task force "to study the potential designation of economic empowerment zones for
the mining of cryptocurrencies in the state of New York." A.B. 1502, 242nd Leg., Reg. Sess. (N.Y. 2019).

Oklahoma:

 Oklahoma's Money Transmitter Act does not explicitly include "virtual currencies" or "monetary value"
and the State's Financial Regulation has not published guidance on virtual currency regulations.

 Bitcoin transferees are not afforded the same protections as those afforded to the transferees of
money. Okla. Stat. Ann. § 1-9-332. The Oklahoma legislature determined that a seller who accepts
bitcoin does not take the cryptocurrency free of an existing security interest. Okla. Stat. Ann. § 1-9-332.

 Multiple bills have set to amend or add definitions with respect to digital currencies and blockchain. In
April 2019, a Senate Bill was adopted, which amends the definitions for electronic records and
signatures to be valid if secured via blockchain technology. S.B. 700, 57th Leg., 1st Reg. Sess. (Okla.
2019).

 Additionally, "virtual currency" was proposed to be included within the definition of "contribution" for
purposes of campaign finance. S.B. 809 57th Leg., 1st Reg. Sess. (Okla. 2019).

 In February 2019, a bill was introduced SB 822 defines "virtual currency" as a medium of exchange, unit
of account or store of value and "is not recognized as legal tender by the United States." S.B. 822, 57th
Leg., 1st Reg. Sess. (Okla. 2019).

 The Senate also introduced a bill "clarifying status of open blockchain tokens under certain conditions."
The proposal delineates when a person is not considered a broker-dealer and posits ways to comply
with exemptions. S.B. 843, 57th Leg., 1st Reg. Sess. (Okla. 2019).

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 The House also proposed a bill to create "the Uniform Regulation of Virtual-Currency Businesses Act
and the Uniform Supplemental Commercial Law for the Uniform Regulation of Virtual-Currency
Businesses Act." H.B. 1954, 57th Leg., 1st Reg. Sess. (Okla. 2019).

 The Oklahoma Senate introduced a bill authorizing cryptocurrency to be used, offered, sold, exchanged
and accepted as an instrument of monetary value within its governmental agencies, the governmental
agencies within the its political subdivisions, and by marketplace sellers; provided such governmental
agencies and marketplace sellers have entered into a written contractual agreement with a money
services business to use cryptocurrency as payment. The bill is currently in the Business, Commerce
and Tourism Senate Committee. S.B. 1667, 57th Leg., 2nd Reg. Sess. (Okla. 2020).

Wyoming:

 Wyoming has emerged as one of the most crypto-friendly jurisdictions in the United States and has
enacted more than a dozen bespoke pieces of legislation aimed at attracting blockchain and
cryptocurrency businesses to the State.

 Most recently, the State enacted rules that would allow "special purpose depository institutions" that
enable companies to offer banking services for businesses unable to secure FDIC-insured banking
services due to their dealings with cryptocurrencies and a slate of bills on the State's 2020 legislative
agenda.

 Among the legislation enacted by the State enacted to make it easier to operate a blockchain or
cryptocurrency business is H.B. 70, known as the "Utility Token Bill" was signed into law. The Bill
exempts "Utility Tokens" from the state's securities laws provided the issued token and its issuer meet
the following requirements:

(1) The developer or seller of the token, or the registered agent of the developer or seller, files a notice of
intent with the secretary of state.
(2) The purpose of the token is for a consumptive purpose, which shall only be exchangeable for, or
provided for the receipt of, goods, services or content, including rights of access to goods, services or
content.
(3) The developer or seller of the token did not sell the token to the initial buyer as a financial investment.

 H.B. 70's liberal approach is facially at-odds with recent statements from the Federal Securities and
Exchange Commission which, at least informally, has stated a belief that all tokens are likely securities.
Accordingly, because of federal supremacy, Wyoming's statute does not give complete safe harbor to
issuers of "Utility Tokens."
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 In attempting to build the Nation's most crypto-friendly state, Wyoming also:

(1) Passed legislation authorizing corporations to create Blockchains to store records. B. 101, 64th Leg.,
Budget Sess. (Wyo. 2018).
(2) Amended its Wyoming Money Transmitter Act to provide an exemption for virtual currency. B. 19, 64th
Leg., Budget Sess. (Wyo. 2018).
(3) Exempted virtual currencies from state property taxes. F. 111, 64th Leg., Budget Sess. (Wyo. 2018).

 The Wyoming House, in its latest appropriations bill, created a blockchain task force meant to identify
governance issues related to blockchain technology. H.B. 1, 65th Leg., Gen. Sess. (Wyo. 2019).

 In Feb 2019, a bill focused on digital assets was approved S.F. 125, 65th Leg., Gen. Sess. (Wyo. 2019,
(1) Classifying digital assets within existing laws.
(2) Specifying that digital assets are property within the Uniform Commercial Code.
(3) Authorizing security interests in digital assets.
(4) Establishing an opt-in framework for banks to provide custodial services for digital asset property as
custodians.
(5) Specifying standards and procedures for custodial services under this act.
(6) Clarifying the jurisdiction of Wyoming courts relating to digital assets.

 Another bill was approved on February 28, 2019 focused on open blockchain tokens:
(1) Establishing that open blockchain tokens with specified consumptive characteristics are intangible
personal property and not subject to a security exemption H.B. 62, 65th Leg., Gen. Sess. (Wyo. 2019.
(2) Requiring developers and sellers of open blockchain tokens to file notices of intent and fees with the
secretary of state.
(3) Authorizing specified enforcement actions.
(4) Making specified violations unlawful trade practices.
(5) Repealing provisions granting open blockchain tokens a securities exemption.

 Finally, other bills that were approved include:

(1) The authorization of "the secretary of state to develop and implement a blockchain filing system." H.B.
70, 65th Leg., Gen. Sess. (Wyo. 2019).
(2) The authorization of "corporations to issue certificate tokens in lieu of stock certificates as specified."
H.B. 185, 65th Leg., Gen. Sess. (Wyo. 2019).

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 (3) The idea to create a "new type of Wyoming financial institution that has expertise with customer
identification, anti-money laundering and beneficial ownership requirements, emphasizing Wyoming's
partnership with the technology & financial industry and to safely grow this state's developing financial
sector." H.B. 74, 65th Leg., Gen. Sess. (Wyo. 2019).

 The creation if the "Financial Technology Sandbox Act," whereas the adopted bill states that "Wyoming
currently offers one of the best business environments in the United States for blockchain and financial
technology innovators, and should offer a regulatory sandbox for these innovators to develop the next
generation of financial technology products and services in Wyoming." B. 57, 65th Leg., Gen. Sess.
(Wyo. 2019).

 Wyoming passed H.B. 27, which established a Committee on Blockchain, Financial Technology and
Digital Innovation Technology. On May 17, 2020, The Wyoming Legislature announced the formation of
"A Select Committee on Blockchain," and the committee had its first meeting on May 22, 2020 via
video conference. H.B. 27, 65th Leg., Gen. Sess. (Wyo. 2020).

 The Wyoming Legislature also passed SB 72, known as the Revisor's Bill, which is an omnibus bill that in
part approved the appointment of liaisons from Wyoming's executive branch to develop and introduce
legislation as necessary to promote blockchain, financial technology and digital innovation in Wyoming.
S.B. 72, 65th Leg, Gen. Sess. (Wyo. 2020).

 The Wyoming House filed a bill to classify open blockchain tokens as not real or personal property. The
bill failed introduction. H.B. 43, 65th Leg. Gen. Sess. (Wyo. 2020).

Conclusion

 Wyoming is most Blockchain friendly state in U.S.A, with 5 bills passed in the Legislation. There are few
active bills which are currently under discussion in the committee.

 New York is preparing itself to be the second state in U.S.A having equipped with the Blockchain
Technology is with around 6 active bills in the Legislation.

 Connecticut has already passed 2 bills related to blockchain technology and is being highly
experimental in the field of Crypto currency.

 States like Oklahoma, Missouri and Maine are in budding stage in the field of Blockchain.

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  Mississippi has no bills placed/pending in the legislation yet. The state may introduce regulations and
bills related to Blockchain 2020. Smart contracts are under scientific study in University of Mississippi

Keywords

Digital Ledger - Records/Collection of Transactions electronically.

Hash - An Encryption technique function to secure the information.

Intermediaries - Banks, Government and other thirds\ parties.

Immutable - Fully protected from Fraud/hacking/corruption.

POW - Proof of work describes a system that requires a significant but feasible amount of effort in order to
deter frivolous or malicious uses of computing power.

POS - Proof of stake is a type of consensus algorithm by which a cryptocurrency blockchain network aims to
achieve distributed consensus.

Smart Contract - smart contract is a computer protocol intended to digitally facilitate, verify, or enforce the
negotiation or performance of a contract. Smart contracts allow the performance of credible transactions
without third parties.

Hyperledger Fabric - Blockchain Framework

Corda - Blockchain Framework

Cryptocurrency - A digital asset designed to work as a medium of exchange wherein individual coin ownership
records are stored in a ledger existing in a form of computerized database using strong cryptography to secure
transaction records, to control the creation of additional coins, and to verify the transfer of coin ownership.

Bitlicense - A common name for the license issued by New York State to cryptocurrency businesses.

TCS Internal | 32
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