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BLOCKCHAIN TECHNOLOGY ACT

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2019 GENERAL SESSION

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STATE OF UTAH

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Chief Sponsor: Daniel Hemmert

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House Sponsor: Michael K. McKell

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7     LONG TITLE
8     General Description:
9          This bill enacts provisions related to blockchain technology.
10     Highlighted Provisions:
11          This bill:
12          ▸     defines and clarifies terms related to blockchain technology;
13          ▸     exempts a person who facilitates the creation, exchange, or sale of certain
14     blockchain technology-related products from Title 7, Chapter 25, Money
15     Transmitter Act; and
16          ▸     makes technical changes.
17     Money Appropriated in this Bill:
18          None
19     Other Special Clauses:
20          None
21     Utah Code Sections Affected:
22     AMENDS:
23          7-25-102, as enacted by Laws of Utah 2015, Chapter 284
24     

25     Be it enacted by the Legislature of the state of Utah:
26          Section 1. Section 7-25-102 is amended to read:
27          7-25-102. Definitions.
28          As used in this chapter:
29          (1) "Applicant" means a person filing an application for a license under this chapter.
30          (2) "Authorized agent" means a person designated by the licensee under this chapter to
31     sell or issue payment instruments or engage in the business of transmitting money on behalf of
32     a licensee.
33          (3) "Blockchain" or "blockchain technology" means an electronic method of storing
34     data that is:
35          (a) maintained by consensus of multiple unaffiliated parties;
36          (b) distributed across multiple locations; and
37          (c) mathematically verified.
38          (4) "Blockchain token" means an electronic record that is:
39          (a) recorded on a blockchain; and
40          (b) capable of being traded between persons without an intermediary.
41          [(3)] (5) "Executive officer" means the licensee's president, chair of the executive
42     committee, executive vice president, treasurer, chief financial officer, or any other person who
43     performs similar functions.
44          [(4)] (6) "Key shareholder" means a person, or group of persons acting in concert, who
45     is the owner of 20% or more of a class of an applicant's stock.
46          [(5)] (7) "Licensee" means a person licensed under this chapter.
47          [(6)] (8) "Material litigation" means litigation that, according to generally accepted
48     accounting principles, is considered significant to a person's financial health and would be
49     required to be referenced in an annual audited financial statement, report to shareholders, or
50     similar document.
51          [(7)] (9) (a) "Money transmission" means the sale or issuance of a payment instrument
52     or engaging in the business of receiving money for transmission or transmitting money within
53     the United States or to locations abroad by any and all means, including payment instrument,
54     wire, facsimile, or electronic transfer.
55          (b) "Money transmission" does not include a blockchain token.
56          [(8)] (10) "Nationwide database" means the Nationwide Mortgage Licensing System
57     and Registry, authorized under 12 U.S.C. Sec. 5101 for federal licensing of mortgage loan
58     originators.
59          [(9)] (11) "Outstanding payment instrument" means a payment instrument issued by
60     the licensee that has been sold in the United States directly by the licensee or a payment
61     instrument issued by the licensee that has been sold and reported to the licensee as having been
62     sold by an authorized agent of the licensee in the United States, and that has not yet been paid
63     by or for the licensee.
64          [(10)] (12) (a) "Payment instrument" means a check, draft, money order, travelers
65     check, or other instrument or written order for the transmission or payment of money, sold or
66     issued to one or more persons, whether or not the instrument is negotiable.
67          (b) "Payment instrument" does not include a credit card voucher, letter of credit, or
68     instrument that is redeemable by the issuer in goods or services.
69          [(11)] (13) "Remit" means either to make direct payment of the money to the licensee
70     or its representatives authorized to receive the money, or to deposit the money in a depository
71     institution in an account in the name of the licensee.