A key piece of legislation designed to lay the regulatory framework for blockchain technology and to see how the government could benefit from its use has made it out of a key Senate committee on its way to becoming law.
The Senate Commerce, Science and Transportation Committee on Tuesday passed the Blockchain Promotion Act, bi-partisan legislation that directs the Department of Commerce to come up with a the accounting ledger technology that underlies bitcoin and other cryptocurrencies. Blockchain distributes copies of the ledger across multiple computers so everyone in a network is working off a single record of all transactions, which is resistant to tampering and easy to audit.
“Blockchain is an exciting new technology with great potential and promise,” Senator Ed Markey, a Democrat from Mass. and co-sponsor of the bill said in a statement. Markey noted that the technology is already being used in the private sector to expand access to renewable energy, enhance health care delivery systems, and improve supply chain efficiency.
“This legislation will help further understand applications for this technology and explore opportunities for its use within the federal government,” he added
The bill, which was reintroduced in February, has bipartisan sponsors in both the Senate and House of Representatives. The legislation is meant to prevent a patchwork of blockchain definitions at the state level and to set the framework for future regulation of the technology. There are already several bills that have been introduced around blockchain technology.
Lawmakers also see opportunity to leverage the technology to make many governmental functions more efficient. The working group described in the legislation will help do that. Many experts consider blockchain to be a major innovation in double-ledger accounting that could be very useful to government agencies to help deliver services, prevent tax fraud, eliminate bureaucracy, and reduce waste. For instance, it could be used to keep track of healthcare benefits, social security benefit distribution or improve document management and storage. Another potential use is helping agencies, such as the FCC better allocate and manage wireless spectrum licenses.
“This bipartisan, bicameral 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,” Rep. Doris Matsui, a Democrat from California, in a statement.
Specifically, the working group would provide recommendations to other government agencies, including the National Telecommunications and Information Administration and Federal Communications Commission to study using the technology to help manage wireless spectrum and provide other efficiencies within the federal government.
Rep. Matsui is sponsoring an identical bill in the House along with Rep. Brett Guthrie, a Republican from Kentucky. The bill’s sponsors in the Senate are Sens. Markey and Todd Young, a Republican from Indiana.