The State parliament in California will soon decide on a bill to that seeks to legally recognize information about a company’s stocks, including ownership, stored on a blockchain.
The bill, Bill-838 was initiated by Senator Robert Hertzberg in January and has scaled through the Banking and Financial Institutions Committee which referred it to the Judiciary Committee last week. From the Judiciary Committee, it is expected to be debated on the Senate floor as soon as it gets approved.
Senator Hertzeberg described the block-chain related bill as a part of broader efforts to keep California ahead in the area of Fintech. “The world around us is changing, and government must adapt to these rapidly evolving times,” He noted. “California needs to continue our legacy of taking on new and developing technologies, especially ones like blockchain, which is being embraced worldwide and presents a strong level of security that is resistant to hacking.”
The bill has been updated, it currently defines that “records administered by or on behalf of the corporation in which the names of all of the corporation’s stockholders of record, the address and number of shares registered in the name of each of those stockholders, and all issuances and transfers of stock of the corporation to be recorded and kept on or by means of blockchain technology or one or more distributed electronic networks.”
The company details to be stored on the blockchain must be backed, however, by information on regular stock certificates. Other clauses in the bill include that the data being put on the blockchain must be “converted into clearly legible paper within a reasonable period of time.”
If passed Bill-838 will put California amongst US States that have successfully passed blockchain friendly laws. Wyoming, Delaware, and Tennessee have all considered favorable regulations towards the emerging blockchain technology.