Delaware’s revisiting policy on how it regulates digital records –called blockchains–which could bear fruit to new legislation related to finance, banking, and cryptocurrency as early as next year.
A newly established Blockchain & Digital Innovation Task Force had its first meeting Friday. The task force consists of advocates for digital currency, blockchain legal experts, elected officials, and security specialists. It’s led by State Senator Darius Brown (D- New Castle).
He said the meetings will, “examine appropriate regulatory frameworks, examine the appropriate risk, assess the impact of cryptocurrency, and then solicit input.”
The task force will meet over the next year to evaluate Delaware’s current policies on blockchain and digital money. It will come up with recommendations on possible pilot programs, goals, and legislation. It will present its findings to the General Assembly by July 2027.
But Brown said he doesn’t anticipate Delaware will need the full thirteen to fourteen months. Other states have covered ground on these issues, which Delaware will be able to adapt for itself.
More than 50 percent of publicly traded companies are incorporated in Delaware, and these companies’ investments in digital currency are growing.
Updating block chain rules stands to carry weight for the First State’s revenue generation, and ability to advertise itself as a "the gold standard" for incorporation.
According to Stanford University, blockchains are blocks of data connected to an “uneditable,” digital trail. Proponents say its “decentralized storage” is appealing for increased speed of business and transparency.
Delaware was an early adopter of a blockchain framework, with rules in 2016 and 2017 under then-Gov. Jack Markell. These accounted for Delaware companies tracking and issuing shares of stock using blockchain.
Greg Strong, a public member of the task force, said efforts slowed for Delaware during the pandemic. He’s a lawyer who specializes in cryptocurrency and blockchain issues.
And since then, multiple states have adopted policies and frameworks for digital currency and blockchain technology.
He said Wyoming, in particular, “kind of picked up where Delaware left off.”
The state adopted its own state-backed digital currency among other initiatives.
“A lot of competition emerged across states,” Strong said. “Many other states also aggressively pursued legislation in this area.”
Blockchain stands to be used across a variety of spaces now, ranging from healthcare, digital IDs, or tracking services accessed by people experiencing homelessness.
But the Delaware task force’s most immediate goals pertain to the state’s corporate environment. Strong said not everything other states have done will be right for Delaware.
“I think we have now a renewed focus on digital assets...,” he said. “Delaware has a really great opportunity to take back this leadership position that it had at the outset.”
The renewed effort in the First State comes on the heels of increased federal interest in cryptocurrency and blockchain structures, with forward motion on the Clarity Act in the US Senate this week. The act outlines federal oversight over cryptocurrency. It cleared the Senate Banking Committee largely along party lines.
Anastasia Delaccio, another public member of the group, works with The Digital Chamber, a consulting group in DC. It promotes acceptance and use of digital assets and blockchain.
Delaccio said after years of pushing acceptance at a federal level, The Genius Act was signed into law last year. It focuses on oversight of stablecoins.
And following the Clarity Act’s “momentum,” she said, “the rules of the road are really being paved in the states....There's a lot of federal momentum, but also uncertainty.”
Her organization wants states to have cohesive laws. She said several areas are naturally coming to the surface as focuses on for now laws and revisions: stable coins and payment infrastructure, digital asset custody and reserves, Uniform Commercial Code modernization and property rights, and tokenization and real-world assets.
Senator Spiros Mantzavinos (D-Elsmere), a lawmaker on the task force, introduced three bills that update Delaware’s laws related to stablecoin, out of state money transmission, and blending The Genius Act into state code.
Mantzavinos’s proposals have passed the Senate and are in House committee for review. Strong called them,“a really good start in terms of some of the things that we can achieve in Delaware by facilitating the use of (blockchain) technology.”
