Blockchain experts eager for more input from the government warned of unintended consequences that could occur if that regulatory engagement doesn’t include a roadmap for facilitating growth.
“In order to truly recognize the true potential of blockchain technology we must have increased regulatory clarity and coordination,” said Perianne Boring, president of the Chamber of Digital Commerce, speaking at the 4th annual DC Blockchain Summit in Washington, D.C.
Blockchain technology has gaining significant attention on Capitol Hill over the last three years, Boring said, pointing out that there were 47 pieces of blockchain-related legislation introduced in 2017-2018, with 17 bills already introduced in the new Congress that began this year. Lawmakers held 33 hearings in 2018 involving blockchain, and the Congressional Blockchain Caucus doubled the number of co-chairs, and currently has 17 members.
However, there were also 27 different bills introduced calling for a study to combat the potential illicit use of digital currency. In addition, while the U.S. Securities and Exchange Commission brought 30 enforcement actions related to digital assets over the last two years, “it has not issued one piece of guidance that’s both clear and binding on this same topic,” Boring said. “This is a big contributor of why companies are choosing not to do business here, and are taking their companies and their business overseas.”
Compounding the problem, according to Amy Davine Kim, the Digital Chamber’s Chief Policy Officer, is that in the United States four separate agencies are jostling for regulatory oversight of digital assets – the U.S. Treasury Department, the Securities and Exchange Commission, the Commodity Futures Trading Commission and the Financial Crimes Enforcement Network.
“So we have a complex financial structure here in the U.S. that presents a challenge that many other countries don’t have,” Kim said.
Blockchain regulatory oversight concerns come as transportation supply chains into and out of the United States begin incorporating the technology into their business processes.
Maersk’s blockchain partnership with IBM, called TradeLens, grew quickly from its initiation in early 2018 into a platform that allows shippers, terminal operators, freight forwarders, and customs authorities to establish a single shared view of a transaction without compromising details or confidentiality. Despite those safeguards, wider adoption in the transportation industry is being held back by trust issues among participants, according to a recent study by PwC.
To help build that trust while providing investment confidence to industry, the chamber rolled out a National Action Plan for Blockchain. “It calls on the U.S. government to do two things: demonstrate leadership through strong public support at the highest levels of government; and adopt a national action plan to coordinate all the stakeholders,” Boring said.
The plan lays out eight “Guiding Principles for Government,” which include encouraging development in the private sector, adopting a “light touch” regulatory approach while bringing enforcement actions against clear violations and preventing a “regulatory patchwork” among U.S. state agencies.