Delaware Governor Jack Markell has announced an initiative aimed at driving the use of the distributed ledgers by Delaware-based public and private enterprises. The technology will help companies to reduce transactional costs, minimize the risk of fraud and automate manual processes.
Markell uncovered the plan at the bitcoin industry meet-up during the Consensus 2016 conference in New York. Delaware, he said, is proud to develop infrastructure that will serve the needs of the blockchain sector. Moreover, the state is a legal home to many innovative startups in the United States.
According to the program, the state will work on creating a welcoming regulatory environment and establishing blockchain legal infrastructure to urge the development of the technology.
“The next logical step in this process is the development of a new category of corporate shares: distributed ledger shares,” Markell noted. “Right now the state is in the planning stages; we believe this project has great potential but we also must be prudent. Our aim as is always is to harness benefits of new technologies while minimizing the risk for businesses.”
By using the distributed ledger and smart contract apps, companies will be able to significantly increase efficiency and speed of commercial transactions.
“Distributed ledger shares hold the promise of immediate clearance, immediate settlement and bring with them dramatic increases in efficiency and speed in the sophisticated commercial transactions for which Delaware is known,” he also added.
The legal issues of the initiative will be handled by the New York-based law company Pillsbury Winthrop Shaw Pittman, whose blockchain legal team is now creating the program’s legal infrastructure. Meantime, the smart contracts platform Symbiont will manage technical aspects of the project.
“I think we are good fit for Delaware because we have a very flexible and extensible system. So our platform is really designed around smart contracts and being neutral to the underlying ledger layer,” said Mark Smith, CEO of Symbiont.
“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 Pillsbury’s Digital Currency & Blockchain legal team.
Delaware’s Governor has also uncovered that the state began investigating its own distributed ledger applications. Symbiont is now working with the Delaware Public Archives to store state archival records using blockchain. The technology could enable the state to cryptographically secure and archive government records held by state and local agencies.
“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 Smith. “In a few years’ time, we’ll look back and see this as an historic moment in the adoption of distributed ledger technology.”
Blockchain’s potential is being recognized by the world’s leading financial institutions. The R3 CEV, a blockchain consortium of more than 40 banks, is currently investigating the perspectives of the technology. It has already conducted the second and the largest test of online distributed ledger systems to see how it can be used for financial transactions.
However, there are still some concerns regarding the spread of blockchain in the years to come. According to Morgan Stanley analysts, the technology faces serious issues, including governance, security and regulatory problems, which could impede its further adoption by financial companies.