Delaware's blockchain initiative to streamline private company filings

Rage Review : Delaware has always been at the forefront of blockchain technology exploration in the United States. Governor Jack Markell reviewed the government's exploration process and introduced future development plans at the 2016 Consensus Conference in New York. In order to maintain Delaware's long-term advantages in corporate registration, it has cooperated with Symbiont and the blockchain legal team Pillsbury Winthrop Shaw Pittman LLP to jointly simplify corporate registration procedures and paperwork. The initiative is expected to use blockchain technology to assist companies in tracking complex equity changes.

Translation: Annie_Xu

The Wall Street Journal reported that Delaware, where most companies are registered, has begun exploring the use of blockchain technology to improve the efficiency of company registration and reduce the cost of paperwork. Although the project has just begun, it will definitely change the most basic back-end functions of private and public companies.

Delaware Governor Jack Markell said:

"We are very interested in this. I think the benefits will be huge."

Markell’s office has begun working with the powerful Delaware Bar Association to explore the best ways to integrate blockchain technology into state law and will begin a pilot project to move state corporate filings to a distributed ledger.

Symbiont, an intelligent securities company founded in 2015, is committed to connecting traditional financial markets and encrypted blockchain technology. It also participated in the Delaware blockchain initiative. After receiving $1.25 million in seed round financing from Duncan Niederauer, former CEO of the New York Stock Exchange (NYSE), a leader in the financial market, Symbiont raised another $7 million in January, bringing the company's market value to $70 million.

Symbiont CEO Mark Smith said the blockchain system will be faster and cheaper than the current system because it automates many processes, including shareholder communications, share registration, capital management, etc. The system may benefit private companies registered in Delaware because it can simplify tracking all equity and changes in shareholder interests after multiple rounds of financing.

There are more than 1 million companies registered in Delaware, including half of the listed companies in the United States and 65% of the Fortune 500. Business registration services are an important part of Delaware's economy, but better legal environments in other states and abroad seem to have taken away its competitive advantage. Therefore, Delaware needs to work hard to maintain these companies and attract more companies, and a simpler and more efficient filing process seems to help it regain this advantage.

Markell said through the media, "Delaware's judicial environment has always been the choice of innovative companies around the world, and Delaware's blockchain initiative shows its efforts to safeguard its position in the blockchain field. By creating opportunities for more companies to use smart contracts and distributed ledger technology, we lay the foundation for a modern, secure and transparent corporate environment in the future."

The Governor’s Press Office confirmed that it is working closely with Symbiont on the technical development of the blockchain initiative. Pillsbury Winthrop Shaw Pittman LLP, a leading blockchain technology legal team, is building the legal infrastructure for the project.

Mark Smith

Smith said:

“Our mission is to work with market-leading institutions, and we are pleased to do so with the State of Delaware. Delaware’s dominance in corporate registration services makes it an ideal place to validate smart contracts.”

Markell revealed details of Delaware’s blockchain initiative during his keynote address at the Consensus 2016 conference on May 2.

According to news reports, Markell reviewed Delaware’s history of timely deployment of blockchain technology in government affairs at the 2016 Consensus Conference, including electronic corporate record transmission, electronic director voting, and virtual shareholder meetings; and then spoke about the government’s blockchain technology development and regulatory direction.

The governor stressed that the initiative is intended to help private companies track changes in shareholder equity after multiple rounds of financing.

“We’ve seen companies go to great lengths to correct and verify stock authorization and issuance errors that could have been easily fixed at the outset. Shares on a distributed ledger can ensure timely clearing and settlement and can greatly improve transaction efficiency and speed, and Delaware has long been known worldwide for its good performance in complex commercial transactions.”

Smith said:

“I think we are a good fit for Delaware because our system is very scalable and resilient. So my platform is built around smart contracts and is neutral to the underlying ledger. What matters is not what the underlying ledger means to us, but the intelligence of the smart contract.”

Smith also mentioned Smart Loans, which will soon be registered in Delaware.