The state of Delaware has passed a bill that recognizes into law the trading of stocks on the blockchain technology.
In April it was reported that the Corporation Law Section of the Delaware State Bar Association (DSBA) had approved Delaware Law Amendments with the intention of delivering statutory authority for businesses in the state to use the blockchain to maintain corporate records.
According to the recent passage of Senate Bill 69, it 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.
Passing the House at the end of June, the blockchain bill only received one vote against it out of a total of 41 votes.
Now with the advancement of the bill it means that middlemen between sellers and buyers of stock could, essentially, be cut out of the process, providing faster settlement times.
The origination of the bill was brought about last May when the-then Delaware governor, Jack Markell, announced an initiative to embrace the blockchain and smart contract technology. It was also hoped that it would provide a legal and regulatory environment for the development of the technology in the state in addition to help attract blockchain companies to Delaware.
Championed by blockchain startup Symbiont, who partnered with Hong Kong-based Privatemarket.io, and created with legal guidance from Marco Santorj of Cooley LLP and Symbiont’s Caitlin Long, this could be indicative that Symbiont may be one of the first companies to operate in Delaware in the not-so distant future.
During the partnership announcement with Privatemarket, to provide stock trading through the distributed ledger, Symbiont are reported as saying:
We see blockchain technology having a significant positive impact on the investment world, and it starts with the fact that the foundational document for any investment – the registration of a company – will likely soon by possible to do on a blockchain in Delaware.
The bill is expected to be signed into law by the governor of Delaware, John Carney, by the end of July, effective the 1st August, 2017.