The California legislature has passed Assembly Bill 2658 (AB 2658), a measure designed to update state law and provide clearer legal footing for blockchain-related technologies. The bill amends several existing statutes to recognize the use of blockchain-secured data, smart contracts, electronic records, and electronic signatures in local, interstate, and foreign commerce.
Legal definitions added for blockchain and smart contracts
Introduced by Assembly member Ian Calderon and co-sponsored by Senator Bob Hertzberg, the bill’s most significant contribution is the formal addition of legal definitions for key distributed ledger terms. Under the proposed language, blockchain technology is described as a distributed, decentralized, shared, and replicated ledger that may be public or private, permissioned or permissionless, and may rely on tokenized crypto-economics or operate without tokens.
The text also says that data on such a ledger is protected through cryptography, is immutable and auditable, and “provides an uncensored truth.” The bill separately defines a smart contract as an event-driven program running on a distributed, decentralized, shared, and replicated ledger that can hold custody of assets and instruct their transfer on that ledger. It further clarifies that, for legal purposes, the term “contract” includes smart contracts.
Blockchain records and signatures gain clearer recognition
AB 2658 also updates provisions tied to California’s Uniform Electronic Transactions Act. Existing law already states that a record or signature cannot be denied legal effect solely because it is electronic, and that a contract cannot be denied enforceability solely because an electronic record was used in its formation. If a law requires a record to be in writing or a signature to be provided, an electronic record or signature can satisfy that requirement.
The new bill extends that logic by explicitly stating that a record secured through blockchain technology is an electronic record, and a signature secured through blockchain technology is an electronic signature. In practical terms, this gives businesses and institutions more clarity when using distributed ledger systems for documentation, recordkeeping, and agreement execution.
Multiple state codes revised, governor’s signature still needed
Rather than creating a standalone blockchain statute, AB 2658 works by amending several existing California codes. The bill revises parts of the Civil Code, Government Code, Corporations Code, and Insurance Code, including Sections 1624.5 and 1633.2 of the Civil Code, while adding a new Section 1633.75. It also modifies Section 25612.5 of the Corporations Code, Section 16.5 of the Government Code, and Section 38.6 of the Insurance Code.
The measure further states that a person using blockchain technology to secure information related to interstate or foreign commerce retains the same ownership and usage rights over that information as before it was secured on a distributed ledger.
In the legislative process, the bill passed the California Senate on August 23 and the Assembly on August 27, after undergoing amendments in both chambers. To become law, it still requires the signature of Governor Jerry Brown. If signed, the measure would mark a meaningful step in California’s effort to integrate blockchain-based systems into established legal and commercial frameworks.