The Corporate Council of the Corporation Law Section of the Delaware State Bar Association has proposed amendments to the Delaware General Corporation Law (DGCL) to allow corporations to issue “Distributed Ledger Shares.” It’s a new innovative method of recording corporate share ownership by using the same technology that supports the virtual currency Bitcoin.
These amendments are a part of the Delaware Blockchain Initiative, the program supported by the Delaware Governor to accommodate blockchain businesses. Distributed ledger is a blockchain-based share registration. It’s when each network user maintains a complete copy of the ledger (hence, the ledger is “distributed”). All users collectively participate in recording and validating the transactions. A major benefit to this method over traditional ledger is that the former does not require a clearinghouse intermediary to settle transactions. That’s why the distributed ledger can be cheaper, faster and more efficient. It cuts out the middleman.
Bitcoin was the first major application of blockchain technology. However, that technology can be applied to record and validate pretty much any digital asset, such as securities, commodities, property titles, derivatives, etc.