O’Toole Weighs in on Pending Blockchain Legislation
Partner Matt O’Toole, chair of the Council of the Corporation Law Section of the Delaware State Bar Association, talked to Global Delaware about proposed Delaware legislation that would permit companies to use blockchain technology to register share and manage transfers and proxies.
Global Delaware offers a concierge service to assist businesses interested in setting up operations in Delaware. Below is an excerpt from Global Delaware’s writeup.
Which are the key innovations introduced into Delaware’s corporate law implementing blockchain technology?
O’Toole: The amendments provide explicit statutory authority for Delaware corporations to use blockchain technology in creating and keeping internal corporate records (including most importantly the corporation’s stock ledger) and in communicating with stockholders. So Delaware law will provide clarity and certainty that blockchain records, including specifically a stock ledger maintained on a blockchain, are valid. The corporate statute also now will provide explicit requirements for the content of the stock ledger, again promoting clarity and certainty. The amendments effectively allow for the creation of so-called “blockchain shares.”
How do you expect the changes to Delaware’s corporate law to strengthen Delaware’s position in the U.S. and foreign corporate legal markets?
O’Toole: At a high level, the changes reinforce the forward-looking posture of Delaware’s state government when it comes to business matters, including technological innovation and our corporation law. Business people can remain confident that Delaware law will continue to evolve in response to business needs and market developments. More specifically, Delaware should be recognized as a jurisdiction that enables and fosters the issuance and trading of blockchain shares. These general and particular results serve to further solidify Delaware’s preeminence as a corporate domicile.