California could become the next U.S. state that allows companies to store data – including information about stockholders – on a blockchain.
Bill 838 was first introduced by Senator Robert Hertzberg in January, but public filings show that the measure has picked up steam in recent days. The State Senate's Banking and Financial Institutions Committee referred the measure to the Judiciary Committee on April 18 after advancing it with a "do pass" recommendation.
If approved by that committee, the full Senate will vote on the measure, which would legally recognize information about a company's stocks, including ownership, stored on a blockchain.
The latest version of the bill would allow "records administered by or on behalf of the corporation in which the names of all of the corporation's stockholders of record, the address and number of shares registered in the name of each of those stockholders, and all issuances and transfers of stock of the corporation to be recorded and kept on or by means of blockchain technology or one or more distributed electronic networks."
In a statement, Hertzberg said the bill is part of a move to help his state keep up with evolving financial technology, explaining:
"The world around us is changing, and government must adapt with these rapidly evolving times. California needs to continue our legacy of taking on new and developing technologies, especially ones like blockchain, which is being embraced worldwide and presents a strong level of security that is resistant to hacking."
California's proposed law includes several stipulations, declaring that the data must be capable of being "converted into clearly legible paper within a reasonable period of time," and that the records can be used to store information stock certificates already contain, according to the text
The data would have to be "recorded and kept on or by means of blockchain technology or one or more distributed electronic networks," according to the legislation.
Calfornia State House image via Shutterstock