One industry insider said it’s long overdue.
Rep. Brett Guthrie, R-Ky., recently introduced legislation that would mandate an exhaustive federal government-led examination of the adoption and impacts of blockchain in the U.S. and abroad.
Introduced in a wider legislative package of 15 emerging tech-focused bills from Republicans on the House Energy and Commerce Committee, the Advancing Blockchain Act directs the Federal Trade Commission and the Commerce Secretary to collaboratively investigate the decentralized, distributed ledger technology over the next two years, and subsequently provide a range of recommendations to Congress to help boost American implementations.
“Blockchain technology can be used for cryptocurrency, but it also has many other potential applications,” Guthrie said in a statement. “The Advancing Blockchain Act will allow us to explore these uses to improve our technology.”
The collection of bills Guthrie’s act accompanies was produced to help “ensure American leadership in emerging technology to beat China and other challenges to global competitiveness,” according to an announcement regarding their release. Included in the package are bills centered on the internet of things, gig economy, tech startups, 3D printing, facial recognition, unmanned delivery services, and more. It also incorporates the Advancing Quantum Computing Act, which like Guthrie’s blockchain bill, also calls for a comprehensive probe into a specific advanced technology and its potential.
Lauren Gaydos, a spokeswoman in Guthrie’s office, told Nextgov Friday that the lawmaker’s team worked with the committee as a whole to put together the slew of bills related to U.S. leadership in emerging technologies. “The goal was to have a comprehensive strategy while singling out different types of technologies through individual bills,” she said.
Frequently associated with Bitcoin and other cryptocurrencies it underpins, blockchain is a technological tool that essentially offers a means to record and validate the provenance of transactions without a centralized authority. Though it hasn’t been shared publicly by Congress yet, an up-to-date version of Guthrie’s bill provided to Nextgov calls for a study that encompasses four deep-dive surveys focused on the technology. The first would include assessments of how industry sectors are tapping into it and the advantages and disadvantages of deploying blockchain, as well as an exploration of how it might be used to promote data privacy and security, increase market competition, and more.
The second survey would evaluate all “federal activity related to blockchain technology.” This examination would catalyze the development of a comprehensive list of interagency blockchain-driven activities, layout each federal guideline and policy focused on blockchain and more. Next, the bill would mandate an “international survey of other countries to establish a compendium [of] at least 10 and not more than 15 countries,” which the bill said would consist of “each country’s national strategy on blockchain technology to determine where the United States ranks with respect to the adoption of blockchain technology.” And the fourth and final survey would fully assess the blockchain marketplace and supply chain for emerging and existing risks.
Six months after the study is completed, the FTC and Commerce Secretary would be expected to turn over to Congress not only the results that they uncovered and curated, but also a list of multiple recommendations to address duplicative policies governing the tech, inform a national strategy to advance it and more.
“The ongoing coronavirus pandemic has made it clear that we need to maintain American leadership in technology,” Guthrie said in the announcement. “America is a nation of innovation and enterprise—and we need to keep it that way. We cannot let China beat us.”
Brad Robertson worked for Ronald Reagan before digital currencies were on anyone’s radar, went on to tech startups for 25 years and then founded the incubator and accelerator Polyient Labs, which helps early-stage blockchain businesses navigate the sector and excel. As the founder and CEO, Robertson said he aims to empower entrepreneurs and help expand the rapidly growing technological landscape. More recently, he created Polyient Games, which is a spinoff dedicated to investing in and incubating blockchain gaming startups. Robertson told Nextgov Thursday that though the COVID-19 pandemic is a national tragedy, a positive result of it might be that it’s forcing not only Guthrie—but other lawmakers such as Sen. Sherrod Brown, D-Ohio and Rep. Darren Soto, D-Fla.—to recognize what he called “the gaping inefficiencies in the nation’s federal payment systems and admit there has to be a better way.”
“This has prompted them to have serious discussions about cryptocurrencies and blockchain, which—up until now—have been rare,” Robertson explained.
As an example, he noted that Soto, who last year was named co-chair of the Congressional Blockchain Caucus, recently penned a letter asking Treasury Secretary Steve Mnuchin and his department to harness private-sector blockchain solutions to, as the note states, “support the necessary functions of government to distribute and track [COVID-19] relief programs and direct that all guidance support the use of technology to facilitate delivery of CARES Act benefits.”
Robertson called Soto’s proposal “a great first step,” and added that Guthrie’s Advancing Blockchain Act is “also a great idea.” However, he said the latter legislation and two-year survey it would require would have “been a better idea in 2014.”
“The U.S. is already too far behind the rest of the developed world in blockchain adoption to risk squandering another two years,” he said. “Regulatory foot-dragging over the last decade has put the U.S. sorely behind the adoption and support of blockchain. Sweden, Switzerland, Australia, Canada, Dubai, Japan, Malta are all much farther along in terms of regulations. And China is probably the furthest along of all; China’s national blockchain strategy is scary-aggressive.”
He noted that it’s a good sign that policymakers like Guthrie and Soto see the technology’s potential “and are trying to light fires so” the nation can catch up—but, from his perspective, “we have a lot of catching up to do.”
According to Robertson, Fortune 500 corporations are heavily investing in the tech, and more than 70% of financial institutions and fintech startups are either deploying blockchain or exploring potential cryptocurrency-based payment use cases. “This means our regulatory bodies are way behind that curve,” Robertson said. He added that in his view multiple lawmakers “still cling to an outdated trope where cryptocurrencies are used to underwrite criminal activity” and Mnuchin last year called cryptocurrency a “national security issue.”
To Robertson, “viewpoints such as these stymie U.S. innovation and force entrepreneurs to do business overseas.” And again, he reiterated that “efforts by U.S. lawmakers and policymakers to get us in step with blockchain and cryptocurrencies—circa 2020—are long overdue.”
Still, he highlighted how there have already been several successful federal-level blockchain deployments and applications. The Air Force, for instance, is leveraging the nascent technology to track its supply chain and the Health and Human Services Department invested millions to produce a blockchain platform and ultimately improve efficiencies. But Robertson also noted that “it feels like the states are really taking the lead here.” He pointed to Wyoming, Illinois, Vermont, his own state of Arizona, which have “all passed laws more supportive of blockchain development.”
“The feds should be leading the charge and Guthries’ bill appears to take that into account, but permitting the FTC to spend two years studying blockchain before making any recommendations puts us another two years behind other countries,” Roberson said.
Guthrie’s spokeswoman Gaydos noted that the Congressman, who also introduced the Blockchain Promotion Act last year, “doesn’t think it’s too late yet—but he does think we need to get to work now.” Additionally, she emphasized that the study is meant to complement work being done in the private sector and that Guthrie hopes to work directly with “colleagues on the other side of the aisle to get something done in this space.”
“We also want to be sure we’re gathering information necessary to make smart policy decisions,” Gaydos said. “As with most issues, the government can do much more harm than good when it comes to innovation and adoption. This will help facilitate better coordination and address barriers to adoption.”