News Maryland Creates New Law To Allow Blockchain Record Keeping...

Maryland Creates New Law To Allow Blockchain Record Keeping by Corporations

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On April 30, Maryland’s Governor signed into law a bill that amended the state’s General Corporation Law to enable the use of blockchain technology by private corporations in their record keeping.

The law explicitly mentions the use of “distributed electronic network or database” to record various types of data including:

  • Stock ledgers (to include the name, address, and number of shares of each stockholder)
  • Records of issuances, transfers, and cancellations of shares of stock
  • Voting trust agreements
  • Bylaws
  • Minutes of the proceedings of the stockholders
  • Annual statements of affairs

Another major aspect of the bill is that it allows corporations to either “maintain, or cause to be maintained on its behalf”, while the previous law required corporations to each maintain their own records and data. The law specifies that the corporation must still “convert a record maintained in a certain manner [including a distributed electronic network or database] into a clearly legible written form on request of a certain person”.

Blockchain technology receiving more considerations to improve corporate governance

This favorable blockchain law recalls other similar laws and bills going through other states such as Wyoming which recently passed a resolution that makes the “law recognizes property rights in the direct ownership of digital assets”, blockchain-based stock certificates, and improving blockchain-based banking laws. Another U.S. state, Arizona, has also been pushing cryptocurrency and blockchain friendly bills and laws. Even Rhode Island is pushing bills that would exempt cryptocurrencies from security laws and regulations, which would better allow cryptocurrencies to be used as currency.

More state legislators are advocating for laws that would allow blockchains and cryptocurrencies to be more easily used as currency by consumers and merchants, as well as better record keeping mechanisms because of the immutability attributes. One major problem that blockchains can help solve is corporate stock accounting. There have recently been issues of more investors truthfully claiming stocks than what was listed as outstanding. The problem arises from stock ownership being recorded in multiple private databases that do not easily communicate with one another. Immutable blockchains can not only mitigate improper accounting by harmonizing data storage and recording, but the data can also be verified and viewed publicly, which also improves transparency. Additionally, mixing services like Dash PrivateSend enable the data to be stored in the public ledger while also still maintaining investors’ privacy and/or corporate secrets.

Dash working to provide decentralized databases to users

The Dash Core Group as been working on Dash Drive as a part of the wider Dash Evolution to provide a decentralized database system. The main goal is to provide a backend for decentralize apps (DApps), but it can also be used for a variety of purposes. Medicinal Genomics, for example, has been using the Dash blockchain and IPFS to record their cannabis genetic data as a way to prevent pharmaceutical companies from avoiding prior art counterarguments when attempting to get patents on various strains of cannabis plants. Once Dash Drive is complete, it will offer users, including Medicinal Genomics, a place to store their data in a decentralized location using the same reliable, affordable, and secure network that node operators are incentivized to maintain for the economic rewards of consumers and merchants using Dash as digital cash around the world.

 

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