American Governor Jack Markell has rolled out a groundbreaking initiative by the State of Delaware to embrace the emerging Blockchain and smart contract technology industry, which can help the public and enterprises lower their transactional costs, speed up and automate manual processes, and reduce fraud.
“Smart contracts offer a powerful and innovative way to streamline cumbersome back-office procedures, lower transactional costs for consumers and businesses, and manage and reduce risk,” said Governor Markell. “We’re delighted that Delaware has this opportunity to help lead the way in promoting Blockchain technology and its growing role in digital commerce.”
He unveiled the plan during a keynote address at Consensus 2016, a technology conference in New York focused on Blockchain innovation. The Delaware Blockchain Initiative is a comprehensive program to provide an enabling regulatory and legal environment for the development of Blockchain technology and to welcome Blockchain companies to locate in the state.
Governor Markell announced efforts by the State’s corporate legal community to explore the need for any clarifications to the Delaware corporate law to address and enable the authorization of “distributed ledger shares” by Delaware corporations.
This move is especially significant given the State’s role as the legal home of 66% of Fortune 500 companies, 85% of U.S. initial public offerings, and many startup and venture capital backed businesses around the world.
Blockchain-based smart contracts will digitize records to autonomously update, delete, share or be acted upon when specific conditions are met, like expirations. The State anticipates the technology will bring tremendous efficiencies and speed to the sophisticated commercial transactions for which Delaware has long set the standard.
The Governor also announced that the State has begun exploring its own use cases for Blockchain technology. Symbiont, a distributed ledger and smart securities startup that focuses on smart contracts and is a leader in the Blockchain industry, is working with the Delaware Public Archives to store state archival records on a distributed ledger. This effort will demonstrate the opportunity for the State to use this technology to help archive, catalog and cryptographically secure government records that are held by scores of state and local agencies and that were produced and exist only in digital form.
“Autonomous record-keeping is an important use case for how smart contracts can deliver a more transparent, efficient and level playing field to the public and private sectors,” said Mark Smith, CEO of Symbiont, the technology ambassadors to the State of Delaware. “In a few years’ time, we’ll look back and see this as an historic moment in the adoption of distributed ledger technology.”
“Blockchain technology in general, and smart contracts in particular, have the potential to transform the way that business is done – in the capital markets and beyond,” said Marco Santori, Leader of the Blockchain Technology legal team at Pillsbury law. “We are honored to be recognized by the Governor asDelaware’s Legal Ambassadors to the Blockchain industry, and to have a seat at the table helping to craft this framework.”
During his remarks, the Governor highlighted four key facets of the state initiative:
- Ensuring that Delaware’s regulatory environment is welcoming and enabling by observing the industry as it develops further, rather than immediately enacting laws and regulations regarding licensing of Blockchain companies, while working with the industry and consumer groups to determine best practices.
- Creating an appropriate legal infrastructure for distributed ledger shares in cooperation with the Delaware State Bar Association’s Corporation Law Council. Distributed ledger shares hold the promise of dramatic increases in efficiency and speed particularly for multifaceted transactions like incorporation services.
- Naming an Ombudsperson, Andrea Tinianow, the State Director of Corporate and International Development, to welcome companies in the industry to Delaware; and
- Committing State government to the use of the technology, beginning with the Public Archives project.