A recent publication by Forbes has revealed that blockchain and cryptocurrency are no longer far-fetched concepts.
Within the US' 116th Parliament, a total of 32 bills have been introduced within the past year. Despite the controversial and dynamic nature of these emerging technologies, regulators in Washington D.C appear to have a growing interest; hence the spike in discussions around them.
Looking back, most of these discussions gained momentum after the announcement of Libra by Facebook. The IT giant is currently leading several entities towards the creation of a digital currency backed by financial assets like a basket of fiat currencies and treasury securities.
However, the project has had its fair share of challenges, especially with the intervention of the U.S senate: which saw Facebook’s CEO, Mark Zuckerberg, summoned back in 2019.
According to the Forbes review, bills that involve blockchain and crypto have since popped up and focus on four main areas:
These include regulation, promoting blockchain use, curbing illegal activities and the possibility of a digital dollar.
Blockchain & Crypto Regulatory Bills
The regulatory framework of blockchain and crypto has been a hot topic not only in the U.S senate but other parts of the world as well. This was inevitable given the threat of disruption in existing financial ecosystems by ‘stablecoins’ like the proposed Libra cryptocurrency. It is quite notable that the project attracted quite a few bills around the regulation of digital assets.
Some of the prominent ones include ‘Managed Securities are Stablecoins Act’ which was pioneered by Congressman Lance Gooden and Congresswoman Sylvia Garcia. This bill was brought forward to ensure that projects with a similar model to Libra are regulated as securities.
Another one is the ‘Keeping big tech out of Finance’ by Rep Jesus Garcia in a bid to prevent large social media platforms like Facebook from engaging in financial activities.
Curbing Illegal Activities in Blockchain and Crypto
Digital currencies have raised global concerns on illegal activities such as money laundering, terrorism and human trafficking. This is mainly because of the anonymous nature of crypto transactions while some projects have gone to the extent of full privacy. As a result, Capitol Hill has seen the introduction of 12 bills within this regulatory scope.
Senator Lindsey Graham introduced a bill dubbed ‘Defending American Security from Kremlin Act’. The initiative is basically meant to protect crypto exchanges from cyber theft with the same level of attention given to financial institutions. There are also three bills focusing on the integration of blockchain and AI to enhance the KYC/AML procedures by banks offering cryptocurrency services.
Spurring Blockchain Adoption by the U.S Government
While there may be some challenges, Capitol Hill is not short of identifying opportunities that lay within the blockchain and crypto industry. The regulators are also looking to spur the growth and adoption of distributed ledgers to enhance efficiency and output within the current processes.
A bill tabled by Senator Todd Young dubbed ‘Blockchain Promotion Act’ is already past the committee stage and should be voted on soon.
This initiative will enable the legal formation of a blockchain working group that will be reporting to Congress on blockchain-related opportunities and their feasibility. Other bills within this niche include the potential use of blockchain for hospital data security in researches done by U.S government agencies.
Digital U.S Dollar
Central Bank Digital Currency (CBDC) has gained popularity in the past year after several central banks showed interest in digital assets. Most of them were motivated by Libra’s threat and therefore a need to create a digital currency that could be managed through monetary policy.
China appears to be ahead in this curve having pioneered a beta test of the much-awaited digital yuan.
In the U.S, two bills were recently introduced based on the possibility of a digital dollar. These are the ‘Automatic Boost Communities Act’ and ‘Banking for All Act’. Going forward, it is likely that more bills within this area of development will pop up in the 117th parliaments as Congress seeks to clarify the oversight of such an asset.