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A governor’s commission said it is an “important technological innovation,” and recommended the state play a robust regulatory role to support its growth.
New Hampshire should play a “leading role” in promoting blockchain and cryptocurrency and encouraging their use, but said lawmakers must be “proactive” in regulating the technology, according to a report issued last week.
The final report by the Governor’s Commission on Cryptocurrencies and Digital Assets said blockchain “appears to be an important technical innovation” that could be used across society and the economy. The report noted that the decentralized nature of blockchain and crypto is one of its benefits, although that still has a downside compared to more centralized operations, including the slow execution of transactions and operating systems that are not transparent.
In a bid to help New Hampshire capitalize on blockchain, the report recommended the state establish a task force to investigate how the technology can be used to improve systems for filing and storing official government records. The commission said blockchain could make government processes more effective and efficient, while the technology could better protect data and reduce the risk of fraud and abuse.
The report said record processes like financial statement filings under the state’s Uniform Commercial Code, real estate deeds, registrations and other titling documents could all benefit from blockchain, but since they are central to the functioning of government and private markets, any changes should be undertaken after careful investigation and with the buy-in of the relevant agencies. Commissioners recommended that the governor and state legislature direct state agencies to undertake reviews of how blockchain could “reform and improve current processes.”
The potential for blockchain-based records management echoes a report late last year from the Texas Work Group on Blockchain Matters, which said the technology could help usher in an era of smart contracts and help preserve real estate records at the local level, among other uses.
But to fully embrace blockchain and other emerging technologies, the New Hampshire report recommended the state should be “proactive” in regulating the space, especially as current state and federal rules are unclear. That “lack of clarity,” the report said, is “an obstacle to the development and growth of Blockchain technologies, products and services, and therefore is harming the development of new economic activities that could benefit citizens through new products, services and jobs.”
In response, state laws and policies should play a “robust role” in regulating blockchain and crypto, the report said, and it called on New Hampshire to establish a better legal system for the technologies. That included a call for the state to clarify the legal status of decentralized autonomous organizations, establish what the report described as a “Blockchain Dispute Docket” in the New Hampshire Superior Court to help resolve specialized issues, and enact updates to the Uniform Commercial Code to better regulate transactions.
The report also called for the establishment of a legislative standing committee to examine any issues that arise under current state securities law, and under any federal laws that may develop in the future.
In a statement, Gov. Chris Sununu said the report’s recommendations “would establish New Hampshire as a leading jurisdiction for the development of sound and effective applications of blockchain technologies.”