In a time when many people doubt the accuracy or credibility of many fundamental facts – especially online – there are fast-emerging digital technologies that can enhance trust. Technologies known as blockchainpermanently, verifiably, and transparently store and share every economic transaction, legal contract, and virtually any other type of record that must be accessed by businesses and the public.
Blockchain embed in digital code and permanently store in transparent, shared databases all manner of transactions and records, protected from tampering and deletion. Every payment and every work project, anything that requires documentation, is trackable by any computer connected to the blockchain network.Blockchain technology is today most closely associated with digital currency transactions, and yet there are a host of potential applications beyond cryptocurrencies.
For example, both the public and private sector have struggled with the many challenges presented by the COVID-19 pandemic. Blockchain technologies could serve as a real-time data source for public health agencies tracking and tracing the virus spread. It could provide efficient and transparent management of vaccine supply distribution. Blockchain can also be used to distribute and track stimulus relief, reducing the amount of time required for Americans to receive funds from weeks to minutes.
More broadly, blockchain technology holds incredible promise for businesses, governments, and consumers, increasing transparency, speed, security and accountability, and will enable enhanced services to Americans and their communities. Blockchain technology will spur new economic growth and create new opportunities for businesses to become more efficient and competitive in the global economy. With digital assets and blockchain, consumers have access to new services for banking, real-time payments, and money transfers, helping expand financial inclusion and closing the unbanked gap for millions.
Blockchain is already being adopted globally by businesses and consumers alike. Policymakers in China, Russia, the European Union and other countries around the world have quickly surpassed the United States in putting in place policy frameworks to tap into the economic value of this rapidly growing and quickly evolving industry. Falling further behind is not simply a competitive disadvantage, it is a serious and growing national economic and security concern. Should the U.S. fail to compete in this new landscape, we could lose our position as the world’s dominant financial market, as well as forfeit control of crucial intellectual property and standards development for blockchain and cryptocurrency technologies to China and others.
In 1996 a bipartisan Congress passed and the Clinton Administration signed into law the Telecommunications Act of 1996, which along with that administration’s “Framework for Global Electronic Commerce,” set flexible rules of the road for the global internet, broadband, and mobile technologies. These policies supported innovation and economic growth here in the United States that today are foundational to our global economy. It’s time for U.S. policymakers to again put in place similar rules of the road to spur innovation and investment, and adoption of blockchain technology and digital currencies.
The Biden-Harris Administration via an Executive Order should establish a National Action Plan for Blockchain Technology. Such an order would create an Office of Blockchain Technology to coordinate research in blockchain, encourage government pilot projects, and support industry innovation.
The Adminisration already has a “Made in All of America” plan to invest $300 billion in research and development in emerging technologies. Funding pilot programs for the use of blockchain technology could assist government services such as supply chain management, cyber and data security, recordkeeping, and would help nurture the global blockchain industry.
Crucial to encouraging this innovation and adoption of blockchain is a legal and regulatory regime that is both clear and flexible for a nascent but fast-evolving technology. Invovators, investors, buseinesses, and consumers all require certainty that the rules of the road will allow them to develop and adopt new products and services, while also protecting all parties, particularly in the areas of privacy and security.
It’s important for Congress, the Federal Reserve, the U.S. Treasury Department, and agencies such as the Securities and Exchange Commission, and the Office of the Comptroller of the Currency, to engage in shaping this framework. Clear guidance is needed in such areas as digital payments and token-based blockchain platforms that also does not hinder growth and adoption of these innovative tools for businesses and consumer alike.
Such a coordinated and focused effort will put in place policices that create a welcoming regulatory environment for investment and innovation in the in the United States, while spurring job creation and economic growth.
Thirteen years after the 1996 telecom act that helped shape the global platforms so crucial to our lives and economy, those platforms enabled Satoshi Nakamoto to invent Bitcoin, ushering in the new era of digital assets. Today, the total market cap of cryptocurrency is three trillion dollars. The potential for digital assets and blockchain is clear, and the Biden Administration and this Congress can help fully realize that potential with a blockchain policy framework that encourage U.S. innovation and leadership.