Officials more and more are beginning to utilize blockchain to improve government services.
When Nevada leaped into the world of distributed ledgers and cryptocurrencies following the passage of SB398 (commonly referred to as Nevada’s blockchain bill) by the 2017 Nevada Legislature, it was unclear how exactly, and how quickly, it would impact Nevada’s economy and its citizens.
Now 15 months following passage we are beginning to see some of its fruits come to bear — startups are locating here by the dozens from across the country, and officials are beginning to utilize blockchains to improve government services.
Public Services
A crucial section within the legislation amended Nevada’s electronic records laws to specify that those kept on a blockchain have the same legal effect as any other electronic record.
This allowed the Washoe County Recorder’s office to enter into a first-in-the-nation pilot program, which allows anyone to receive a certified copy of their marriage license within minutes via email.
To make this possible, the Recorder’s office has partnered with blockchain startup Titan Seal, which recently relocated to Nevada; a decision driven in large part by the passage of SB398.
When a customer requests a copy of their marriage license, Titan Seal puts a secure, cryptographic hash of it on the Ethereum blockchain, which is then displayed on the certificate.
The hash is a unique number that can only be generated from a certified copy of a marriage certificate, allowing a certificate holder to cross-reference it with the one on the blockchain to ensure its validity and that it is unmodified.
With the legacy system of printing a certificate, stamping, and applying a wet signature from the Recorder, customers routinely waited up to two weeks for the copy to arrive via snail-mail.
Given Washoe County’s history with ‘quick access’ weddings (and divorces), the Recorder’s office has many more records stored per capita than many other offices across the country, and therefore processes a high number of requests across the country on a daily basis.
Of course, marriage licenses are a small part of records stored by local governments and, if this project proves successful, we expect to see more partnerships between state and local governments and private industry in the months and years ahead.
Cannabis
Two Nevada candidates running for state office (Kate Marshall – Lt. Governor, Zach Conine – Treasurer) have jointly proposed an idea to help the state’s budding cannabis industry’s biggest problem — cash handling.
For those unfamiliar, the cannabis industry across the country is largely “unbanked”because marijuana is still illegal at the federal level; FDIC backed banks are strictly prohibited from providing financial services to cannabis businesses.
Wages, taxes, rent and utility bills from the cannabis industry are all paid for in cash, requiring the hiring of armed security for nearly all steps along the supply chain. This is not just a nuisance for the industry, but indeed a safety issue along with increased financial burden.
The Marshall and Conine proposal would be to create a state-backed digital credit system, on a blockchain, allowing cannabis customers and businesses to make intrastate transactions using a chit or a token.
A customer would be able to purchase digital tokens through an ATM-like machine at a dispensary, and then use those tokens via a secure gift-card or digital wallet to purchase their cannabis products.
Once in possession of these tokens, businesses could then elect to pay vendors, taxes and employees using the token system, with each token guaranteed by the state to be convertible back into cash.
The value of the token would be necessarily tied to the value of a U.S. dollar, thereby alleviating concerns of cryptocurrency volatility.
While the proposal is still in development, and perhaps contingent upon the election results for these two offices, should it come to fruition it would make Nevada the first jurisdiction on the planet to not only digitize intrastate commerce for the cannabis industry, but the first to create a state-backed digital token of any kind.
Moving Forward – The Nevada Tech Caucus
Recognizing the importance of this legislation and its impact on the state as a whole, a bi-partisan and bi-cameral group of legislators have joined together to form a ‘Tech Caucus’ within the Nevada Legislature.
One of the group’s initial eight members, Assemblyman Steve Yeager, explained that he envisions the members of the caucus as the ‘go-to’ legislators when it comes to blockchain and other technology issues, and one that will work with the industry to figure out how to integrate emerging tech into government services.
The eight members of the new caucus so far are Senators Ben Kieckhefer (sponsor of SB398 from the 2017 session), Heidi Gansert, Mo Denis, and Nicole Cannizzaro, and Assemblymembers Jill Tolles, Ellen Spiegel, Leslie Cohen, and Steve Yeager.
Tyson Falk is a member of the Government Affairs & Advocacy Group at the Reno-based law firm McDonald Carano. Visit www.mcdonaldcarano.com to learn more.
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