marco-santori-delaware-initiative

Preliminary notes:

Marco Santori

Delaware initiative

It's good to see so many friendly audiences in the audience. I am at Pillsbury Wintrhop Shaw Pittman. We are focusing on distinct areas of law as it applies to blockchain tech. We have been in the space as early as 2011 so we were trying to do the land grab. My team has been asked by the State of Delaware to serve as legal ambassadors to the blockchain industry. We couldn't be more honored to serve in this role.

When Delaware approached me to setup their strategy, they were way out ahead of this issue. They weren't coming to me asking who is the CEO of Bitcoin. They weren't asking me "how does mining work?". Their questions were far more sophisticated. They wanted to know if proof-of-work could be supplanted reliably. They wanted to know could private and public databases act together to serve the same transaction? They even paid us for a long time, they have been looking at this closely, so far in the brief history of blockchain tech, it has been highly theoretical except for Bitcoin. Evangelists have been giving us the promise of democracy incorrectly; advocates of blockchain tech have pitched blockchain as a panacea for every capital market imaginable. In fact, there has been so much talk on the potential of database tech, that those turning those energy into something more kinetic, are too few and too far between.

The subtitle of this conference is "make bitcoin great again". I have the distinct honor of introducing someone to make this very real. I am introducing the governor of Delaware, a man who has a long history of taking ideas and turning them into refined reality. He was employee 13 at Nextel. He coined the name Nextel. Once he entered politics, he was one of the state governors to welcome tech and globalization and recognizing it the economic juggernaught it has turned out to be. He served his constituents well. Delaware has a AAA rating since the governor was treasurer. He served as treasurer of Delaware too. He was elected to public office not just as governor but also treasurer. He was elected 5 times. He has never lost an election. It is my distinct honor to introduce Governor of Delaware, Jack Markell.

Good morning everyone. I am here to announce the Delaware Blockchain Initiative. I am also here to announce that I am Satoshi. It is great to be here today. Marco, I want to say it has been a pleasure to work with you and your team over the last few months. What I would like to share wit hthis conference is what we've been working on together. But first, an observation. Which is that this monring I had the opportunity to talk with a few companies here about the blockchain database tech. The thing that struck me the most deeply was the diversity of applications, it seems like it could do everything- it's really amazing. It's similar to the diversity of our state. For sure, Delaware is the state of incorporation for the majority of Fortune 500s. We are 85% of the home for all new U.S. IPOs, and also large venture-backed tech firms. Increasingly we are bringing tech firms to locate their operations in our state as well. In every industry from banking, finance, tech, Delaware has long been the gold standard for company formation. I believe we have maintained this superior position by ddistinguishing trends from genuine paradigm shifts in the ways that corporations do business.

Blockchain database tech has been maturing over the past few years. At larger enterprises, it's a perfect demonstration of the brain powre and resources behind this revolution. For enterprise, blockchain can eliminate layers of outdated costly middlemen and back-office settlement and clearing procedures, they can eliminate counterparty risks and rfree up billions of dollars of capital. They can speed the exchange of any asset that can be digitized for faster real-time settlement. For the public, blockchain tech can help people move assets from one party to another's pocket more inexpensively. Finance tech can be an on-ramp to the financial system for Delaware and the world's underbanked populations. As Marco said, I served as treasurer. I have worked hard to ensure that underserved communities have access to financial literacy but also affordable financial services. The most vulnerable of our fellow citizens often cannot afford basic financial services. For members of the public with bad credit, no credit, or no bank accounts, only with smartphones, blockchain database tech can offer access to finance at an affordable price. We think both pblic and private benefits are a perfect fit for our state which has a history of embracing innovation. Having embraced the sharing economy, throwing our own arms open wide, but also making sure we have a welcoming regulatory and business environment. The enthusiasm for these new ways to do business is an indication of a larger vision that recognizes today's world is changing rapidly and globalization and tech revolutionary have permanently transformed our economy. There is no going back. Bitcoin is here to stay. Employers have more choices about where to locate and where to hire. As a result of tech, many employers need relatively fewer people because of automation. Those who believe we can significantly address our economic challenges simply by punishing the big banks or raising minimum wage, although raised a national increase would make sense, those are the only solutions that other states and other countries surpass us. We know that winning the future is only possible when we foster innovation, when we train the workforce to support the growing economy, when we engage with the world to attract foreign investment. As a part of that approach, we want to be a leader in exploring the potential of bitcoin and blockchain database tech that are changing our world. Today I continue our tradition of embracing change, by announcing the official public launch of our database blockchain initiative, a commitment to the growth.

There are four parts of our initiative. The first is regulations. Now, it's a topic on mind that every blockchain CEO these days, regulation is always in favor of enabling statues and avoiding one-size fits all solutions for companies. This approach is embodied in our delaware incorporation law, which is considered the most flexible modern corporate statue in the country and probably the world. This approach is reflected in a regulatory reform limit that we launched in 2012 which removed and eliminated many hundreds of outdated regulations. This was something I signed last year called the regulatory flexibility and transparency act, requires our state agencies to consider our regulations every 4 years and consider flexible methods of regulations.

We don't believe governments should be prescriptive about regulating new industries. It's tempting to jump in early and regulate risks as soon as possible, but in doing so, we regulate away some of the benefits as well. So instead, we believe the right approach is a descriptive one, we shouldn't sit back and wait, we should actively observe, we should monitor, we should learn about bitcoin and blockchain database technology, so that when the time comes to create even more regulations, we can describe in law already the things we have seen work in the industry. This is in fact how Delaware became the dominant corporate domicile in the United States. We were not the first state to have corporate law. We actively observed, we learned from mistakes from other jurisdictions, we adopted best practices, adn we emerged with a system admired around the world. With the bitcoin space, we're taking a similar approach. Our bank commissioner is taking an observational role for other jurisdictions. He wants to take a balanced approach for economic development, protecting residents in their transactions involving virtual currencies. The state has no immediate plans to issue laws regarding licensing for virtual currency businesses. We want to actively observe, and if an appropriate time comes, we will work with the industry and consumer groups to describe the best practices.

The second apsect is that we have always been a frontrunner in addressing practical needs for businesses getting efficiencies from new processes. In 1983, our corporate law endorsed the concept of uncertificated corporate shares, which clarified companies that they don't need to have traditional paper stock certificates. As the internet and electronic transmission tech gathered steam in the 90s, we embraced the cyber revolution and had a comprehensive amendment to allow for electronic director votes, virtual stockholder meetings, taken together this has brought greater efficiency in how corporations conduct business. Today I would like to announce our office's support for the next logical step, which is a new corporate share category called distributed ledger shares. This is in the planning stage, we think bitcoin has great potential but we must also be prudent. We must harness the benefits while minimizing the risk. Like any new tech, integration can have growing pains. We believe the benefits could be tremendous. Settlement and clearing can take days, there's no tech reason for that to be true, distributed ledger shares hold the promise of immediate clearance and immediate settlement. This can bring speed, and this can increase the sophistication of Delaware. One way is the programmatic management of captable, like Allrounds. Many companies are staying private longer and longer. Keeping track of captable rights, each with different terms and conditions can be like solving a logic puzzle. Companies are feeling this frustration every day. Our legal community sees this as companies alloocating ssignificant financial resources to correct and valiadate.... can be correctly and semalessly handled from the outset. Manage the entire process on a distributed ledger could be a great answer.

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The tech is already being envisioned for use in hundreds of other business-to-government applications, like the management of tracking business and profesional licensing records, secure filings, court filings, probate records, and the maturity has to start somewhere. I am pleased to announce plans a State of Delaware blockchain database. We are launching this with smart contracts that can be used for internal and external use cases. We have a plan to dip our toes in the water for managing and validation ..... public service commission. .... we want to replace our public archives at the forefront of electronic records amangement. I want to thakn our partners for developing the Delaware initiative, like Marco Santori, his law firm, they have been helpful to us. Also the team at Symbiont. The test case is already up and running. Symbiont is a distributed ledger smart security startup focusing on smart cotracts both tech and commercial experience.