The stock market on the chain: the potential impact of Delaware


nnnThe Law Amendment, which was passed last week in Delaware, USA, once incorporated into the law at the end of this month will allow the company incorporated this week to have the right to issue and trade shares on the chain chain. And the number of companies registered in the United States to make the number of its initiatives is particularly important to prove that the block chain technology applications will gradually develop its advantages will gradually appear.n
nnTranslation: Annie_Xun
nLast week, the state law passed by Delaware in the United States, once incorporated into the law at the end of this month, will allow the company incorporated this week to have the right to issue and trade shares on the chain chain.n
nAlthough on the surface like a small change, but a big impact. Global companies and exchanges have been exploring how distributed book technology can help stock issuance, execution and settlement (some even issue stocks in the chain chain). But has been in the supervision of uncertainty under the cloud, do not know the shareholders, including the relevant management agencies will let the innovator control.n
nIn this way, the enterprise can try the new process for the first time, and the law escort.n
nThis may pave the way for the entire cycle of stock transfers to the chain chain, including distribution, hosting, trading, shareholder exchange and redemption. The result is the innovation of the global securities network, laying the cornerstone of the modern economy.n
nThe stock structure used in most markets revolves around paper documents, consistent with the core concepts of the seventeenth century. Process complex, more steps, more costs. The single point of failure caused by centralized liquidation leads to systemic risk. In most jurisdictions, legal ownership depends on the transferor, and real ownership may be confused, which may violate the rules governing the holding of shares.n
nAnd paper systems, and even digital systems, are hard to resist fraud, the centralized database may have security vulnerabilities.n
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nAccept the lossn
nBlock chain system allows investors and distributors to interact directly, theoretically can eliminate intermediaries, trustees and clearing houses, thereby reducing transaction costs. Billing can be completed in a few hours, rather than a few days, which can release funds, reduce the cost of holding.n
nLegal ownership can be returned to investors and companies, and thus more transparent. Dividends and stock splits are done automatically, reducing costs and errors.n
nDistributed account platform can eliminate the risk of single point of failure, so that proxy voting more transparent and accurate, so that the ownership structure and guarantee more easily managed.n
nThere are also flaws. Transparency is on the one hand. Not all investors want their holdings to be transparent. Error correction is on the other hand, in the event of an error, can not tamper with the books how to modify it?n
nMoreover, the opponent’s risk will not go away, just transfer. However, as the services and solutions work are subject to regulatory permission, the development of the solution will be licensed.n
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nBenefit sharingn
nDelaware’s milestone is of great importance.n
nThe state has 49 seats in the United States, the population ranked 45, there are 2/3 of the US listed companies and 85% of the IPO. There are more legal persons than residents. This is because of its relatively flexible regulatory and tax system as well as standard corporate law holders.n
nMoreover, the recent amendments are part of simplifying corporate and government processes. The Delaware Blockchain Initiative, launched a year ago, promises the state government to integrate block-chain technology into government document processes such as land title, birth and death certificates, professional licenses, corporate documents.n
nThe state’s largest registered company has always supported innovation, providing enterprises with the opportunity to test new financing and management practices.n
nAlthough the technology application will be very slow, at least with the benefits of the show and continue to accelerate. Other areas of jurisdiction can be followed to avoid losing registered companies. The structure of the financial market may also gradually but completely change.n
nAlthough the state’s amendment does not instantly bring about market changes, but can let people think about the systemic height of this move: 10 years after the traditional stock market will exist?n

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