U.S. Representative Tom Emmer. Credit: John Gallagher/FreightWaves
On the first day of this year's DC Blockchain Summit in Washington, D.C., concern that a heavy-handed approach from the federal government could stifle blockchain innovation in the United States was lessened by the regulators themselves, who told attendees that they generally support allowing the technology to flourish.
That message was reinforced on day two of the conference, when U.S. Representative Tom Emmer (R-Minnesota), a lawmaker who has taken on blockchain as an issue on Capitol Hill. Emmer, who co-chairs the Congressional Blockchain Caucus, predicted that 2019 "stands to be the year of blockchain, the year we separate hype from reality, and begin harnessing blockchain in the right-use cases to lower costs and increase efficiency," he told attendees on March 7.
But he also emphasized the need for coordinated government oversight. "Congress has a clear role: we must insure that regulation is simple and precise," Emmer said. "If a patchwork of regulations emerges, the industry will suffer, and prove government to be ineffective. This confusion will undoubtedly lead to more regulation, which will only stifle the innovation and potential application of the technology."
The financial stakes were highlighted during the conference when it was noted that there's $130 billion in value currently being stored in public blockchain networks, and that 10 percent of the world's GDP is expected to be stored by 2025.
Emmer commended the Chamber of Digital Commerce for releasing its National Action Plan for Blockchain, which calls for a pro-growth regulatory approach to developing blockchain technology in the U.S. The document specifically mentions how the technology is already being applied in supply chain networks for tracking food safety.
"The National Action Plan also provides a needed call for clear regulation before enforcement. Although regulators of blockchain and cryptocurrency have been significantly restrained and have allowed innovation in this space to flourish, we're currently operating under ‘regulation by enforcement.' Regulators must provide clear rules of the road to ensure that even the smallest start-up with a brilliant idea can become a major enterprise."
Emmer said he's doing his part to speed the growth of blockchain in the U.S. through his Blockchain Regulatory Certainty Act, a bill he introduced in January. The legislation ensures that blockchain developers that never take control of consumer funds do not need to register as a money transmitter in the states in which they operate.
"Money transmitter laws were enacted to ensure the protection of the consumer entrusting another entity with their funds in order to transmit them. If no funds are being entrusted to another, it should be certain that these regulations do not apply," he said.
Emmer also gave a favorable outlook for cryptocurrencies – the existence of which is enabled by blockchain technology – despite the surge, and then plunge, of bitcoin value over the past two years.
"Many, including those in this town, would like to focus only on blockchain and ignore or criticize cryptocurrency," he said. "They will tell us the bitcoin is used by criminals, and the blockchain is the real innovation. It's true there are illicit transactions. But that should not be reason to totally dismiss cryptocurrency."
He pointed out that bitcoins represented the first use of a network open to the public and capable of letting two participants interact with no middleman.
"This is the revolutionary aspect of this technology, the idea that we can develop an open network in which we control our own data, while freely interacting with each other, and without having to trust gatekeepers. That idea could be one of the major breakthroughs of our lifetime."
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