Colorado lawmakers introduce groundbreaking blockchain bill

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A bipartisan group of lawmakers introduced legislation this week that would make Colorado one of just a handful of states working to adopt blockchain technology in government systems and programs.

The senate bill, sponsored by Sen. Kent Lambert with Sen. Angela Williams, Rep. Joann Ginal and Rep. Bob Rankin, aims to spur research into uses for blockchain in the state government and make Colorado an early adopter of the revolutionary technology that underpins Bitcoin.

Blockchain is a distributed database that verifies transactions in chronological order, using a unique cryptographic signature for each record, to form a permanent ledger that is openly distributed among multiple parties in a peer-to-peer network. The blockchain is immutable: Once information is stored, no one can revise it or tamper with it.

In 2016, Lambert co-sponsored the Colorado Cybersecurity Initiative (HB 16-1453) which created the Governor’s Cybersecurity Council and the National Cybersecurity Center. With this new bill, he said, blockchain could be used to reduce fraud and cybercrime, secure data and public records, and boost accountability.

“We have a lot of government processes that have vulnerable data, both in transmitting the data, … making sure we’re guarding against fraud, and the storage of data according to a strict protocol,” Lambert told the Business Journal.

The bill gives the chief information security officer in the Office of Information Technology, under the governance structure of the Governor’s Cybersecurity Council, “more specific authority and encouragement to go into all state agencies and collect information, which we’re hoping will lead to a pretty comprehensive look at security risks and those opportunities where we can use some blockchain technologies for a variety of purposes,” he said.

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The bill, SB 18-086 Cyber Coding Cryptology for State Records, doesn’t focus on any one specific use case, Lambert said. “We’re guessing there may be at least 100 different use cases, just off the top of our heads.”

New York, Delaware, Arizona and Illinois currently have bills or laws relating to blockchain or distributed ledger technology, “but probably nothing as comprehensive as what we’re trying to do here,” Lambert said.

The bill “strongly encourages” OIT, the Department of State and the Department of Regulatory Agencies, to review use cases for blockchain and encryption technologies throughout the state, he said, and encourages higher education institutions and the NCC to include blockchain and distributed ledger technologies in their curricula.

NCC interim CEO Vance Brown is a strong proponent of blockchain technology, describing it as “transformative” and “a revolution not just economically but in everything — in terms of the way government could work, our medical systems, every system out there.”

Read more about blockchain in the Jan. 12 edition of the Business Journal.