By Peter Brath
On July 23, Delaware Governor John Carney (D) signed a trio of bills aimed at keeping Delaware in step with blockchain technology. Each bill passed through both chambers without a single no vote. The initiative is part of an effort to ensure Delaware maintains its business-friendly reputation where more than half of all Fortune 500 companies are incorporated.
Blockchain is the technology that supports digital currencies, like Bitcoin, Litecoin and Ethereum, allowing transactions and records to get distributed without being copied.
Senate Bill 182 deals with limited partnerships in the state, while SB 183 deals with limited liability companies. Both bills allow LP’s and LLC’s to secure records using the blockchain. The third bill, SB 194, updates the Delaware Statutory Trust Act to include language on blockchain technology and allows trustees to have votes recorded through blockchain.
Before these bills were passed, courts had no obligation to consider records or contracts stored on a blockchain legally binding. Now, corporations in Delaware will be able to use digitally signed contracts and other documents created and stored in the blockchain without violating the law.
This legislation comes after Delaware awarded IBM with a $738,000 deal in July to design a blockchain filing system for the state.
Critics argue that holes will need filled with future legislation. Others worry the statute’s definition of “trustworthy” in reference to the blockchains used to store data is too loose. In the meantime, any conflicts that arise will likely have to be dealt with by the courts before more legislation is passed.
The law went into effect on August 1.