When the government embraces chaos and learns to love blockchain
How to solve a problem. Once upon a time, we believed in plans and the proper ordering of everything. Now we believe in prototyping and testing, but quite a few problems refuse to go away. Here is a thought: why not embrace chaos and allow the problem to sort itself?
Apologies for the high-flying introduction, but something quite revolutionary just happened in the state of Norway. A public agency, the Brønnøysund Register Center, is keeping track of company information such as articles of incorporation, accounts, and powers of attorney. All this information is useful to secure a proper tax base. As the fight against financial crime intensifies, the government will need to collect more information about ownership and control. This information exists already in the books of banks, in accounting systems, in the annual reports of the tax authorities and, most importantly, in the various systems our companies use for the purpose of corporate governance. The scene was set for one more public registry to capture duplicates of this information.
Someone, somewhere, got an epiphany. Let’s try a blockchain. We went to work with a private Ethereum solution, employed an ERC 1400 security token to publish company cap tables, introduced an architecture where the Norwegian government can validate the cap tables. Voila, a self-generating public registry.
Now for the interesting part. Because the blockchain keeps claims separate from approved facts, and because the blockchain can capture in code the rules of the game for any given category of stocks, the public infrastructure is in effect an enabler for a wide range of fin-tech innovations. In August, developers from a few innovative firms went to work to utilize and expand on this platform. How can a company secretary, familiar only with his accounting system, use this interface to update the cap table? How can we publish shareholder agreements that are self-fulfilling (if I sell my shares, you may sell yours, etc.?) How can the tax authorities harvest all required information for a tax return using information from a transfer rather than forcing shareholders to submit a form? These are but a few of some 100 ideas on how the registry can reinvigorate equity instruments in small and medium-sized enterprises.
Will all this happen? That actually depends more on intra-agency politics than on technology. Did we catch your attention? Follow the case on www.mir.network and embrace the chaos.