Delaware, the state that incorporates most companies, is exploring the use of blockchain technology to make its paperwork cheaper and more efficient, The Wall Street Journal reports . The effort, while still in its early stages, could change some of the most basic back-office functions for private and public companies alike.
“This is something we’re very interested in,” said Delaware Gov. Jack Markell. “We think the benefits could really be tremendous.” Markell’s office has already begun working with the state’s powerful bar association to determine how best to incorporate the technology into state law and will start a pilot program to move state archival records onto an open distributed ledger.
Symbiont, a smart securities company created in 2015 to interface traditional financial markets and cryptographic blockchain technology, is participating in the Delaware blockchain initiative. After securing $1.25 million of seed funding from influential financial market leaders including Duncan Niederauer, former CEO of the New York Stock Exchange (NYSE), soon after launch, Symbiont closed a $7 million funding round in January, valuing the company at $70 million.
The blockchain system will be faster and cheaper than the existing process since it automates a number of processes, including share registry, capital-table management and shareholder communications, said Symbiont CEO Mark Smith. The system likely will benefit private companies that incorporate in the state by making it easier to keep track of all the equity issued and the different shareholder rights after multiple financing rounds.
More than 1 million companies are incorporated in Delaware, including half of all publicly traded companies in the U.S. and 65 percent of the Fortune 500. Incorporation services have been an important part of Delaware’s economy, but the state seems to be losing its competitive advantages to other business-friendly jurisdictions in the U.S. and abroad, which are making efforts to attract new […]
