At the request of the U.S. Congress, the U.S. Government Accountability Office (GAO) has unveiled four policy options to help decision makers adopt blockchain technologies while maximizing the benefits and minimizing the hassles.
A technology assessment presented by the Government Accountability Office recognized the potential of blockchain technology to improve a number of financial and non-financial applications, despite concerns expressed about creating new problems when trying to solve problems associated with traditional systems:
“Blockchain can increase the speed of the property registration system and reduce the cost of protecting property by making property registration easier and more reliable.”
However, some of the issues identified in the study include uncertain benefits, data reliability, and compliance.
A flowchart to determine if a blockchain can be useful. Source: GAO
Using the flowchart above, the Government Accountability Office aims to help decision makers including Congress, federal agencies, state and local governments, academia, research institutions, and industry define blockchain implementation.
The GAO assessment highlights the many non-financial applications of blockchain technology, as shown below.
Examples of potential use cases for blockchain technology. Source: GAO
While decision makers have the right to maintain the status quo, the Government Accountability Office has recommended four policy options to facilitate decision making related to mainstream blockchain implementation: standards, oversight, training materials, and appropriate use.
By setting standards, the GAO aims to address interoperability and data security issues. Some of the considerations include the introduction of consensus mechanisms and the development of internationally recognized standards.
According to the Government Accountability Office, supervisory policies can “help address issues of legal and regulatory uncertainty and regulatory arbitrage.” In addition, the Government Accountability Office recommends the release of educational materials to address limited understanding and uncertain benefits and costs.
The fourth policy alternative, and its appropriate use, is to reduce concerns about risks to financial systems and unspecified benefits and costs. The assessment highlights the CFTC’s lack of authority to cooperate with non-governmental organizations, and the assessment states that:
“Legal or regulatory uncertainty may prevent some potential users from taking advantage of blockchain.”
Related Topics: Virginia Senate Allows State Banks to Offer Cryptocurrency Services
On March 5, the Virginia Senate unanimously approved a proposal to amend a bill that would now allow traditional banks in the region to offer virtual currency deposit services.
As Cointelegraph reported, the bill was again introduced by Delegate Christopher T. Head in January 2022, stating:
“A bank can provide virtual currency deposit services to its customers if the bank has 26 relevant protocols in place to effectively manage risk and comply with applicable laws.”
The bill passed the Senate by a vote of 39 to 0 and is expected to be signed into law by Virginia Gov. Glenn Youngkin.