It is quite reasonable to call 2018, the blockchain year. We
have been observing a wave of crypto and blockchain developments in pretty much
all sectors. Let it be ICO launchings, Venezuela planning to trade its oil for
Petro token, or US states competing with one another to wear the crown for the
most crypto-friendly state, the progress (as a whole) is significant.
What’s more exciting is these measures are not being taken by
one or two organizations. In fact, the governments are urging the residents
(and even providing funds in some cases) to adopt blockchain in order to take a
step into the future and bring efficiency within the markets. For instance,
recently, Ohio announced that for all future tax payments, the government would
consider a crypto-based model.
Regardless of how different states are progressive about the
tech, the federal government seems quite confused when it comes to defining and
regularizing cryptocurrencies. Unfortunately, this ‘chaotic’ approach is
checking an exponential growth that could (have been) achieved in the last
12-18 months.
Due to this behavior, federal authorities are often
criticized by stakeholders, crypto buffs, researchers and professors alike.
Just to make things clearer for you, it is important to discuss an article,
written by Carol Goforth of the University of Arkansas. It is mentioned that as
of yet, there are almost 4 different digital asset regulators in the federal.
Their job description covers an array of aspects, but the primary on makes them
have the ‘veto’ power for issuing any digital asset in the country. The
surprisingly hilarious fact is that none of them shares the same page when it
comes to the interpretation of the nature of digital assets, crypto in
particular.
Talking about the Securities and Exchange Commission, they
regard crypto as securities, while the Internal Revenue Service considers it a
property. Going further, the CFTP perceives it as a commodity and FinCEN wants
to treat it as regular currency.
So that is the problem! Every one of them happens to be a
major stakeholder in running America. Whom would you disapprove? Frankly, none!
It is worth mentioning that Professor Goforth is more
concerned about the consolidation of these ‘powerful’ organizations. Therefore,
she proposes that the government must evaluate and authorize different tokens
on their utility and benefit they could bring to the market, instead of
defining a hardcoded procedure for getting a token registered.
The role of the US Congress
From the recent developments and media appearances of
Congress members, we are hopeful that a couple of members will lead the change
and bring about a reasonable regulatory framework. It should be noted that they
did not only make appearances to testify their support, but they also proposed
some bills in the Congress.
For instance, Darren Soto and Ted Budd rolled out the bills
which demanded the optimization of a regulatory framework in order to prevent
exponential price fluctuations in the crypto industry. Both of these bills
address the CFTC and the first one is all about outlining a variety of options
for controlling price manipulations in the market. However, the second bill
addresses the requirement to conduct a comparative study for exploring
different regulatory policies, as practiced in an array of blockchain use
cases.
Moreover, we have also seen that Warren Davidson,
ex-Congressional Blockchain Caucus member, seems to be quite active throughout
this month. At a Blockland Solution conference, Warren announced that he is in
the middle of crafting and proposing a bipartisan bill. This initiative aims at
creating a distinct class for the token and as a result, the government would
be able to legalize ICOs efficiently. Moreover, he also proposed a solution
that could be attractive to the Trump administration. Warren said in an
interview that the government could think about crowdfunding the wall (on
blockchain) between US and Mexico. If it happens, a token would be created for
the investors and as a result, the usage of cryptocurrencies might increase.
What about the use of mere ‘blockchain’?
It seems like the sane stakeholders of the government got an
answer to that question a long time ago. Since the federal authorities seem
disarrayed, it is not wise to wait for them. Therefore, a handful of federal
agencies have initiated their ‘in-house’ blockchain-based projects to make the
procedures traceable and efficient at the same time. In fact, the usage of
blockchain has turned out to be a routine matter for them.
It has also been observed that the DHS took a keen interest
in two blockchain use cases relevant to its scope. The first one allowed them
to conduct forensic analysis. Basically, the aim was to facilitate the
authorities in tracking ‘privacy’ coins, such as Zcash and Monero. As of yet,
only a limited scale of scrutiny is available for crypto transactions and the
DHS wants to ensure that these privacy coins do not enable criminals to carry
out any illegal activity and get away in the dark.
The division is also willing to extend the blockchain usage
to its subsidiaries, including the customs, immigration services, and
transportation administration. This solution is aimed at developing a product
to detect any fraud or forgery in licensing and certification.
The military is also working on different blockchain use cases quite keenly and of course, they are more attracted to the
Featured image via BigStock.
