The U.S. Congress Suggests 4 Blockchain Policy Possibilities

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Congress, federal agencies, state and local governments will benefit from GAO’s blockchain deployment monitoring services. The U.S. Government Accountability Office (GAO) presented four blockchain policy recommendations to Congress. The recommendations aim to assist policymakers and utilize blockchain technology. As a result, it will increase benefits and reduce difficulties. In addition, GAO was requested by Congress.

A technical evaluation provided by the GAO recognized the potential of blockchain technology. One of these potentials is to improve a wide range of financial and non-financial applications. As stated in the report, by making title registration easier and more reliable, a blockchain may speed up a title registry system and cut the cost of title insurance. Moreover, the report highlights unknown benefits, data dependability, and regulatory compliance problems.

Flowchart of Blockchain Benefits
Flowchart Showing the Utility of Blockchain. Source: GAO

The flowchart above is created by GAO researchers. Through this flowchart, they aim to assist policymakers in determining the appropriate level of blockchain adoption. 

Additionally, as stated in this GAO study, blockchain technology may be used for various non-financial purposes.

US Congress With Potential Blockchain Use Cases
Potential Blockchain Use Cases. Source: GAO

GAO’s Recommendations

The GAO advocated four policy choices to simplify the decision-making process of blockchain implementation. This process includes standards, supervision, educational materials, and authorized uses. These are GAO’s suggestions, although policymakers have the authority to retain the status quo. GAO intends to develop industry standards to address interoperability and data security issues. In addition, standards and consensus methods that are globally accepted should be implemented.

Diving into the GAO’s report, it states an oversight strategy. Accordingly, this strategy may help resolve difficulties with legal and regulatory doubt and regulatory arbitrage. Also, GAO recommends additional educational materials. The main reason is to address issues of low comprehension and undetermined benefits and costs.

Furthermore, the fourth policy option is referred to as the suitable uses. In addition, it involves mitigating financial system risks and unspecified benefits and costs. The study points out that the Commodity Futures Trading Commission (CFTC) lacks the power to engage with non-governmental organizations. In particular, the study notes that some prospective blockchain users may not profit from the technology because of legal or regulatory ambiguity.

As of March 5, traditional banks in Virginia can now offer virtual currency custody services. This is possible after a bill amendment request has been approved by the Senate. Respectively, the bill was first proposed by Christopher T. Head, a member of the House of Delegates, in January 2022. Head made a statement regarding this issue.

He said that a bank may provide cryptocurrency/digital currency custody services to its customers. But, to do so, the bank must have 26 good procedures in place to manage risks and follow the law. The bill passed in the Senate. There was a resounding 39-0 majority in the Senate. Now the bill is in the hands of Virginia Governor Glenn Youngkin, who is expected to sign it into law.

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