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California State Senator Bob Hertzberg has introduced legislation to enable the use of blockchain technology for certain business practices in California. The “Blockchain Bill” SB 838 would allow companies to store data on the blockchain and create more secure methods for corporations to issue and transfer share certificates.

“The world around us is changing, and government must adapt with these rapidly evolving times,” said Senator Hertzberg. “California needs to continue our legacy of taking on new and developing technologies, especially ones like blockchain, which is being embraced worldwide and presents a strong level of security that is resistant to hacking.”

SB 838 just passed the Senate’s Banking and Financial Institutions Committee and is expected to be heard in the Senate Judiciary Committee in early May. It represents a big step forward by the state to “explore the unharnessed potential of blockchain technology” and tap into tech labs at public research giants UCLA and Berkeley.

Leading the race to become the world’s first “smart” government on the blockchain is Dubai, which aims to shred all bureaucratic paperwork by the year 2020, with the digitization of bill payments, license renewals, real estate transactions, visa applications and more.

It will require radical legislation to see just how far blockchain can go in transforming California’s government. It has the power to become the single most effective tool for overhauling bureaucratic processes that generate mountains of redundancy, burdensome government paperwork and slow, broken or erroneous tracking systems. In addition to the fintech revolution that is quietly reshaping global remittances and merchant payments, blockchain is rewriting societal views on the creation of money and how we store value.

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Hertzberg sees merit in blockchain applications for voting technologies, land titles, government contracts, stock certificates and more.

The bill would permit the use of “tokenized crypto economics” to align the government with the state’s legacy as a bastion of bleeding edge technology. (12) (A) A provision authorizing records administered by or on behalf of the corporation in which the names of all of the corporation’s stockholders of record, the address and number of shares registered in the name of each of those stockholders, and all issuances and transfers of stock of the corporation to be recorded and kept on or by means of blockchain technology or one or more distributed electronic networks, provided that all of the following requirements are met: (i) The records can be converted into clearly legible paper within a reasonable period of time. (ii) The records can be used to prepare the list of shareholders. (iii) The records can be used to record information required to be included on stock certificates pursuant to this code. (iv) The records can be used to record transfers of stock required pursuant to this code. (B) For purposes of this paragraph, “blockchain technology or a distributed electronic network” means a distributed ledger technology that uses a distributed, decentralized, shared, and reciprocal ledger that may be public or private, permissioned or permissionless, or driven by tokenized crypto economics or tokenless. The data on the ledger is protected with cryptography, is immutable, is auditable, and provides an uncensored truth.

Home to Google, YouTube, Facebook and Apple, California is an economic powerhouse with a gross domestic product of $2.443 trillion, making it the sixth largest economy in the world after the United States, China, Japan, Germany and the United Kingdom. It counts 53 companies within its borders that ranked on the Fortune 500 list. Apple ranked #3 on the list by total revenue in the US.

Fortune 500 California Companies

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3 – Apple

5 – McKesson

19 – Chevron

25 – Wells Fargo

27 – Alphabet

47 – Intel

52 – Disney

59 – Hewlett Packard Enterprise

60 – Cisco Systems

61 – HP

81 – Oracle

92 – Gilead Sciences

98 – Facebook

119 – Qualcomm

123 – Amgen

156 – Molina Healthcare

157 – PG&E

161 – Aecom

178 – Gap

187 – Visa

198 – Synnex

214 – CBRE Group

217 – Western Digital

219 – Ross Stores

222 – Farmers Insurance Exchange

235 – Edison International

247 – Core-Mark Holding

264 – PayPal Holdings

265 – Applied Materials

280 – Sempra Energy

302 – Pacific Life

310 – EBay

314 – Netflix

320 – Reliance Steel & Aluminum

326 – Salesforce.com

330 – Live Nation Entertainment

357 – Charles Schwab

383 – Tesla

387 – Nvidia

395 – A-Mark Precious Metals

405 – Franklin Resources

406 – Activision Blizzard

414 – Sanmina

430 – Avery Dennison

440 – Lam Research

443 – Adobe Systems

453 – Clorox

464 – First American Financial

465 – Symantec

468 – NetApp

474 – Mattel

493 – Robert Half International

498 – Yahoo

At the same, California has one of the highest poverty rates in the nation with sprawling tent cities throughout Los Angeles, despite political stump speeches and real estate development dollars to address the problem.

As more bureaucratic processes are converted to digital ledgers, the use of blockchain technology can evolve to help track public funds, monitor disbursements for public programs and enforce accountability for every taxpayer dollar that gets spent.

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