Blockchain reduces paper processes, speeds up transaction times, increases efficiencies and builds trust among participants to a transaction, according to Sept. 23 IBM report on how distributed ledger technology (DLT) can improve how the federal government does business. The report was authored by Thomas Hardjono, director of the MIT Trust: Data Consortium. It's titled "The Impact of Blockchain for Government: Insights on Identity, Payments, and Supply Chain."
Hardjono explores several areas where blockchain can benefit government agencies and how regulators and policymakers can lead the way to mass adoption of the tech that drives economic vitality.
The author, writing on behalf of IBM Center for The Business of Government, stated that it's important for regulators to work with industry experts to ensure that the regulatory framework governing blockchain is appropriate and compatible with the innovation.
"It is imperative that government and industry work together to continue and strengthen technological and market leadership in this new area, and to address potential policy and regulatory incompatibility that may constrain growth of the emerging digital-blockchain economy," writes Hardjono.
His view is similar to those of a group of cryptocurrency and finance experts
who last week warned the U.S. Securities and Exchange Commission (SEC) and policymakers to avoid enacting and implementing bad regulation that are incongruent with the unique features of crypto and blockchain tech. The group, which consists of a Bitcoin Core developer, Morgan Stanley veteran, and "Big Four" accounting executive, said that doing so would harm the industry and investors.
Members of the Congressional Blockchain Caucus have been holding roundtable discussions on blockchain tech. According to the author (who has been consulting with Congress on the matter), the goal has been for policymakers to understand use cases of blockchain technology. Other objectives include identifying areas of common interest; accelerating adoption and deployments; identifying existing gaps that impede implementations; identifying components being assessed across industries, businesses and government agencies.
However, Congress could have a difficult time reconciling potential differences in policy vision with the executive branch. For example, the congressional caucus identified digital identity as a key theme that impacts government. But bureaucracies are likely to resist change that leads to less power for their departments and more transparency and accountability when it comes to data privacy and security.
The caucus also identified payments as well as supply chains as ripe for disruption by digital ledger technologies (DLT).
Aside from close collaboration between industry and government, Hardjono mentions the need for leadership and vision from government officials in order for America to reap the benefits of blockchain technology.
"There is a need for greater vision and leadership across government regarding the development of technology for a digital-blockchain economy, and the U.S. role in this future economy. Industry leaders believe this technology will be core to the future of the economy as a whole, just as the Internet has become. This foundational economic impact may range from supply-chain logistics management, to finance and insurance, to identity, to government services, and more."
The author also mentions the need for more research and test deployments.
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