California may soon be forming a working group to examine the potential benefits of blockchain to the state – and how best to update laws to make use of the technology.

California bill 2658, first introduced in February 2018, originally recognized "a record that is secured through blockchain technology is an electronic record," as previously reported. However, the final version as of Monday now directs the Secretary of the Government Operations Agency to create a blockchain working group to study the technology instead.

It also adds that "for the purpose of this chapter, 'blockchain' means a mathematically secured, chronological, and decentralized ledger or database," though this definition is temporary and will expire by January 2022.

The working group, whose chairperson will be designated no later than July 1, 2019, will include members from within the technology industry, as well as representatives from related fields. Stakeholders will be able to provide input to the group, which will then be responsible for recommending changes for the state legislature.

According to the bill, the group will specifically examine how blockchain can be used by the government and local businesses, what risks might come from using blockchain, how blockchain can benefit businesses and the government, how blockchain use can fit into California law and "the best practices for enabling blockchain technology to benefit the State of California, California-based businesses and California residents."

The group has until July 1, 2020 to draft its report, which "shall include recommendations for modifications to the definition of blockchain ... and recommendations for amendments to other code sections that may be impacted by the deployment of blockchain."

Public records show that both the state Senate and the General Assembly have passed the bill after third readings as of Monday, meaning it should now go to Governor Jerry Brown, who has 30 days to allow the bill to become law or veto it.

Public records show that both the state senate and general assembly passed the bill with an overwhelming majority, likely protecting it against any potential veto.

California flag image via Jeffrey M. Frank / Shutterstock