The state plans to engage technology vendors to help businesses and state agencies use blockchain technology to distribute, share, and save ledgers and contracts.
When it comes to making its state a welcoming environment for businesses, Delaware has been around the “block” more than once. The corporate haven is stepping up what it offers corporations with an initiative that will use blockchain technology to make back-office operations more efficient.
More than six out of 10 Fortune 500 companies are legally headquartered in Delaware. Through its Delaware Block Initiative, launched in April by Gov. Jack Markell, the state plans to engage technology vendors to help businesses and state agencies use blockchain technology to distribute, share, and save ledgers and contracts. Blockchain technology -- which famously underpins the infrastructure of the popular Bitcoin online currency -- enables a network of users to make and verify transactions automatically, without intermediaries, encrypting data as network users share information from a digital ledger.
Andrea Tinianow, the director of Global Delaware, a state initiative aimed at building and supporting business ventures in the state, said the plan began more than a year ago, when she and her team reached out to leaders in the blockchain community. “We understood it could be very helpful if [corporate documents] could be issued on blockchain through its distributed ledger technology,” she said.
First up, the Delaware initiatives will work on using blockchain technology to store contracts and other essential corporate data on a distributed ledger, which will allow companies and agencies to store their documents in more than one location, keep them more secure and automate access by constituents, shareholders and employees. Other benefits include lower costs and longer documents retention, according to Caitlin Long, chairman and president for Symbiont, a technology provider working with the state on “smart contracts.”
“Typically, when documents are stored manually, the document is destroyed once the mandatory retention period passes,” Long said. “This will solve a big problem… and could be very useful to government and public archives as well.”
Indeed, the Delaware Public Archives will be among the first to use the distributed technology to archive and encrypt government archives later this year. Long pointed out that the use of blockchain means the documents are can be replicated in multiple locations, providing better disaster recovery and saving the cost of off-site physical storage.
Earlier this year, Gov. Markell outlined a number of legal and regulatory reviews the state would be undergoing in order to license blockchain technology and ensure it was legal and within compliance for its businesses and agencies alike.
Since news of Delaware’s work with blockchain technology broke, Long and Tinianow both said they have fielded numerous requests about their work from companies, associations and government agencies in the United States and Europe that are interested in launching their own efforts. “From a corporate perspective, issuing shares [and] securities via blockchain could also reduce costs and hassle… and make the process more automated,” Long said, adding that it could also make communication with shareholders easier and less costly.
“Everyone is pretty thrilled about the potential to create efficiencies,” Tinianow said. “We keep on finding potential opportunities for this technology. This a whole new world.”
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