Delaware is inching closer to using blockchain as a means to create and manage corporate records.
Though the process is in the early stages, a group within the Delaware State Bar Association’s Corporation Law Section has released a proposed piece of legislation that would establish a legal basis for using the technology for this purpose. Specifically, it would amend the state’s General Corporation Law to account for blockchain use.
The move comes less than a year after Delaware’s government, led by the now-former Delaware Governor Jack Markell, unveiled a new project focused on blockchain applications for corporate record-keeping.
The Delaware Blockchain Initiative is backed in part by smart contract startup Symbiont, and those involved have eyed 2017 as the year in which Delaware-based firms may begin to use the tech to retain corporate records.
The proposed bill states:
“Amendments to Sections 219, 224 and 232 and related provisions are intended to provide specific statutory authority for Delaware corporations to use networks of electronic databases (examples of which are described currently as ‘distributed ledgers’ or a ‘blockchain’) for the creation and maintenance of corporate records, including the corporation’s stock ledger.”
The proposed legislation isn’t a done deal, however.
According to law firm Richards, Layton and Finger, which published details of the proposal, the bill is subject to further approval by the Corporation Law Section. Then, it would need to be formally introduced in the Delaware General Assembly (the state’s legislature), where it could potentially undergo further changes. But if passed in largely existing form, the new rules would come into affect in August of this year.
That the state would move to experiment with the tech in the area of corporate record-keeping is perhaps unsurprising.
Delaware is a popular site for companies to base their headquarters, accounting for more than half of all Fortune 500 companies according to the state’s Economic Development Office.
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This article has been updated.