The corporate and tax friendly U.S. state of Delaware signs IBM to build a blockchain filing system prototype, in a $738,000 Contract, which will be based on the Hyperledger Fabric blockchain framework.
IBM was awarded the federal consulting contract on the 18th of June without competitive bidding, this was made possible by creating an extension of an existing contract that the company holds with the State of Delaware.
With more than half of all U.S. publicly traded companies, and two thirds of the fortune 500 incorporated in the state, it is a significant move that aims to provide a good legal and regulatory environment for blockchain technology.
The state does not have a sales tax, instead it earns almost one third of its revenue from franchise taxes, on more than a million corporate entities, accounting for $1.3 billion of its $4.2 billion reserves.
The aim of the contract is to establish the various areas that blockchain technology can assist businesses registered in Delaware, allowing corporations to take advantage of smart contract technology to automatically track stocks and collateral assets in real time.
Kristopher Knight, the deputy secretary of state, likened IBM’s role to that of an architect creating a skyscraper design prior to construction. He stated:
“If we were to move on to that next phase, it’s going to be a significant investment with that technology firm, we need to make sure that from the beginning, we’re all on the same page,”
In the first instance, IBM have only been instructed to develop a prototype of the corporate filing system, with a proof-of-concept planned to be launched in October 2018.
Speaking at a New York City conference in 2016, the then Governor of Delaware explained that blockchain could free up billions of dollars by streamlining asset exchange, removing technical procedures and significantly reducing business risks.
Indeed, the state has many high ranking advocates of blockchain, who believe using the technology to make incorporating in the state more attractive, is a money maker and a competitive advantage against other states.
In April this year, IBM completed the world’s first business registration using blockchain, as part of the ‘Digital Switzerland Initiative‘, together with a group of companies, including Swisscom and blockchain startup Proxeus.
Further to this, IBM appear to be securing several significant contracts with governments around the world, and just this week it signed a AU$1 billion (US $740 million) 5 year contract to develop blockchain for the government of Australia.