Defining Blockchain: Blockchain Promotion Act
This Monday, October 1, it was announced that members of the Energy and Commerce Subcommittees introduced the Blockchain Promotion Act of 2018 bill (H.R. 6913) to direct the Secretary of Commerce to establish a Blockchain working group. Congresswoman Doris Matsui and Congressman Brett Guthrie of the House of Representatives and members of the committees on Communications and Technology and Digital Commerce and Consumer Protection introduced the bill on September 26, 2018. The Blockchain working group would advise Congress with a common definition for blockchain’s distributed ledger technology, among other purposes. This implies a federal definition for blockchain technologies, something federal and state regulatory agencies have yet to agree on.
Blockchain Working Group
Within 90 days after Blockchain Promotion Act is passed, the Secretary of Commerce would establish a Blockchain working group similar to those created by individual government agencies. It should be composed of representatives of all federal agencies that could benefit from the use of blockchain technologies, as well as nongovernmental stakeholders, including,
- Information and communications technology manufacturers, suppliers, software providers, service providers, and vendors.
- Subject matter experts representing industrial sectors other than the technology sector that the Secretary determines can benefit from blockchain technology.
- Small, medium, and large businesses.
- Individuals and institutions engaged in academic research relating to blockchain technology.
- Nonprofit organizations and consumer advocacy groups engaged in activities relating to blockchain technology.
- Rural and urban stakeholders.
Within a year of passing the Blockchain Promotion Act, this Blockchain Working Group should submit to Congress a recommended definition for the common acceptance of what distributed ledger technology is, which has been a conflict point for regulators. Further more, the report should contain,
(i) a study to be conducted by the Assistant Secretary of Commerce for Communications and Information, in coordination with the Federal Communications Commission, on the impact of blockchain technology on electromagnetic spectrum policy;
(ii) a study that examines a range of potential applications, including non-financial applications, for blockchain technology; and
(iii) opportunities within Federal agencies to use blockchain technology.
Federal agencies such as the Commodity Futures and Trade Commission (CFTC) have already developed their own working groups dubbed, LabCFTC for understanding on how to regulate novel Financial Technology, including Blockchain. More recently the both the Federal Trade Commission and Bureau of Consumer Financial Protection have both launched their own Blockchain Working Group for FinTech regulation. The Blockchain Promotion Act is a congressional attempt to clarify exactly what this novel technology is and how it can be applied, and regulated, by these government agencies.
In a press release by her office, Congresswoman Matsui stated,
Blockchain technology could transform the global digital economy. Opportunities to deploy blockchain technology ranges from greatly increased transparency, efficiencies and security in supply chains to more-opportunistically managing access to spectrum. This bipartisan bill will bring a broad group of stakeholders together to develop a common definition of blockchain, and, perhaps even more importantly, recommend opportunities to leverage the technology to promote new innovations. I am pleased to work with Congressman Brett Guthrie on this effort.
The full text of bill H.R. 6913 may be found here.
Felix Shipkevich is a principal of Shipkevich PLLC.PLLC. His practice focuses on providing counsel to FinTech and financial services firms, including financial technology, payments and emerging digital currency space. He has spoken at national panels in the money transmitter space and payments industry. Mr. Shipkevich’s payments practice has brought him into contact with money transmitter registration requirements in all fifty U.S. States.
To read his full profile, click here.