The state of Delaware is looking to avoid prescriptive regulations when it comes to supervising blockhain companies, but instead be mindful of how the industry actually works, Gov. Jack Markell said Monday.
Regulators are often "tempted to get in early," Markell said, but doing so runs the risk of "regulating away the benefits."
The comments were part of Markell's speech at a blockchain conference sponsored by CoinDesk, where he detailed Delaware's blockchain initiative. It follows an early April announcement that
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Model legislation in the works would give state legislatures a template for regulating virtual currency businesses. The Treasury is lobbying against clear exemptions for firms that don't control customer funds.
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The more welcoming European regulatory environment for blockchain developers could take the competitive edge away from U.S. banks unless regulators here start championing fintech innovation.
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The number of startup companies opting out of the State of New York more than a dozen since the financial services department's BitLicense regulation was finalized is troublesome.
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Besides his pledge to take a balanced approach to regulation, Markell said the state's legal community wants to enable the authorization of distributed ledger shares by Delaware corporations through smart contracts. Such a move would be useful in determining ownership for private companies that have had multiple rounds of equity raises when they look to go public. Delaware is the legal home of 85% of the initial public offerings in the United States.
"Smart contracts offer a powerful and innovative way to streamline cumbersome back-office procedures, lower transactional costs for consumers and businesses, and manage and reduce risk," Markell said.
The governor also announced that the state's public archives division has begun exploring use cases for the storage of its records on a distributed ledger with Symbiont, a smart contract startup.
Additionally, the state has named Andrea Tinianow, its director of corporate and internal development, as ombudsman to welcome blockchain companies to Delaware.
