Vermont Secretary of State Jim Condos and Department of Financial Regulation Commissioner Michael Pieciak on Wednesday signed a memorandum of understanding outlining collaborative efforts to explore the use of blockchain technology in the digital record-keeping practices of the captive insurance industry.
The pilot program will help the state identify areas where the use of blockchain technology in regulatory and other government business may increase data security and reduce costs for residents and those doing business in Vermont, the DFR said Thursday in a statement.
“Developments in technology provide opportunities for government to improve efficiency and transparency, cut red tape, and improve services for Vermonters,” Mr. Condos said in the statement. “This pilot will allow us to examine whether or not the application of blockchain technology for digital recordkeeping can improve aspects of the state regulatory process.”
The Vermont Secretary of State’s Office and Department of Financial Regulation jointly issued a request for information on Wednesday to identify vendors to work with the state to launch a pilot program allowing new captive insurance companies to register with the secretary of state using blockchain technology, the statement said.
“Financial services firms are innovating at lightning speed and regulators have an obligation to keep up,” Mr. Pieciak said in the statement. “This partnership with the Secretary of State provides a great opportunity for our teams to become better acquainted with distributed ledger technology and understand how the state and Vermont businesses might benefit.”
The pilot program, designed to test the functionality of the emerging technology in state regulatory processes, will also include a review and revision of relevant statutes, rules, regulations, and bulletins to ease blockchain implementation, the statement said.
“Vermont has long been known as an international leader in the captive insurance industry with a robust regulatory and professional community and a willingness to embrace innovation,” Captive Insurance Deputy Commissioner David Provost said in the statement. “This makes Vermont’s captive insurance industry the ideal place to pilot this blockchain program.”