When one hears the state of Delaware mentioned, the 1992 Mike Myers comedy Wayne’s World may be the first thing that comes to mind. In the film, Myers is enthusiastically promoting tourism using stereotypes associated with several locations. When he gets to Delaware, he is unable to think of anything the state is known for and thus simply states, “Hi. I’m in Delaware.”
However, little did Wayne Campbell (the character portrayed by Myers) know, the second smallest and sixth least populous state is known for doing business. Delaware, due to its business-friendly laws and legal precedence, is quite the hub for big corporations. In fact, over 1 million corporations, including roughly two-thirds of Fortune 500 companies, are incorporated in the state. With a population of around 960,000 residents, there is actually more corporation registered in Delaware then people living there.
If they ever decided to do a Wayne’s World remake, Campbell might be better served to say, “Hi. I’m in Delaware. Let’s get down to business!”
These businesses are particularly important to the local government because the franchise taxes they pay accounts for roughly one-third ($1.3 billion) of the state’s income.
How will Delaware Use Blockchain Tech?
While the first state to ratify the US constitution (yep, that was Delaware) already has a reputation for being business friendly, they don’t appear to be content to rest on their laurels. To make the location even more enticing to corporations, Delaware is looking to upgrade their filing system by utilizing blockchain technology.
The goal is to create two proof of concepts. The first will focus on creating notifications of changes to commercial code filings, while the second will look at ways to streamline management records related to incorporations and stocks.
As reported by Computerworld’s Lucas Mearian, the state “plans to launch a proof-of-concept for a blockchain-based business filing system that will allow corporations to take advantage of smart contract technology to automatically track stocks and collateral assets in real time; being able to do so will give lenders and borrowers a more efficient and accurate record with which to transact business and meet state and federal regulations.”
The state recently awarded the International Business Machines Corporation (IBM) a $738,000 contract to design the electronic distrusted ledger associated with the project.
The man in charge of the operation is Mark Fisk. Fisk is the public service blockchain leader for IBM, who when discussing his goals for this endeavor stated: “We are looking at these distributed systems where none of this information has [been] kept together and seeking to create a permission blockchain where we can selectively share information.”
Prototype Coming Soon!
The blockchain-based filing system prototype is expected to launch in October of 2018. If all goes well, the proof of concepts could be further developed.
As Delaware Deputy Secretary of State Kristopher Knight put it, “ We have been working to see what we can do … related to blockchain that will add value to the community and create an ecosystem that is related to corporate governance. We are taking a progressive step-by-step approach to develop these proofs of concept and determine whether it is worth developing them into full-blown applications down the road.”
If things go well and a full-blown application is indeed developed, blockchain tech could potentially save the state and the companies that do business there both time and money.