TRENTON, N.J. – The state Assembly passed legislation Thursday to legalize cryptocurrencies and crypto exchanges in New Jersey.
The bill (A1178), sponsored by Assemblyman Christopher DePhillips, clarifies that New Jersey corporations may use so-called “blockchain” technology to simplify recordkeeping requirements.
“We need to use the technology at our disposal to ensure our information is safe,” said DePhillips (R-Bergen). “Permitting companies to use blockchain not only helps protect the company’s data but allows for full transparency of that data. Large companies like Microsoft and Walmart have embraced this technology and we need to make this available to all companies, not just big box stores.”
Blockchain is a ledger where transactions of cybercurrencies, such as Bitcoin, are recorded. It works like a chain of digital blocks that contain records of transactions. Each block is connected to those before and behind it, making it difficult to tamper with because a hacker would need to change the block containing that record and all those linked to it to avoid detection.
Blockchains are kept in peer-to-peer networks that are continually updated and kept in synchronization. Records are secured through cryptography and participants have their own private keys that act as personal digital signatures. Each bitcoin is digitally signed each time it travels from one owner to the next.
Lawmakers formed a task force last session to study how blockchain can be used for government recordkeeping and service delivery.