The issue of blockchain technology has been fairly nonpartisan on Capitol Hill – until recently. The importance of determining policy on cryptocurrency in the House Financial Services Committee became high when Facebook’s Project Libra appeared to threaten the power of the U.S. dollar. In D.C., when an issue becomes “conflated”, it means that two ideas have been combined into one. When Chairwoman Maxine Waters (D-CA) stated, during the SEC Oversight hearing, about the Libra cryptocurrency, she then asked what the SEC was doing about the whole “blockchain phenomenon”.
The theory goes that if cryptocurrency and blockchain are thought of as the same thing, then regulations on crypto might also apply to the technology. Additionally, were the U.S. to authorize any study or provide a grant for blockchain technology, should this concept be equated to using taxpayer dollars to launch an ICO, might mean that an investment in blockchain technology would be eliminated in the process.
And so, in what might need to be called the “Pre-Libra Era”, Chairwoman Maxine Waters (D-CA) and Ranking Member Patrick McHenry (R-NC), had co-sponsored H.R. 3407, the Export Finance Agency Act of 2019, with a proposal for a survey of U.S. Exporters benefitting from the use of blockchain in their operations, including their management of supply chains, contracts, and payments. In the “Post-Libra Era”, and also as a direct result of the Democrats and Republicans failing to compromise on this bill, Chairwoman Waters introduced a brand new bill, H.R. 4863, also called the Export Finance Agency Act of 2019, with 22 of her fellow Democrats co-signing the bill.
What had been removed from the bill? Besides the sponsorship of Ranking Member McHenry (R-NC), the survey on blockchain is no longer part of the bill. So, why is this important when other more pressing issues such as how the SEC will view tokens are on the minds of entrepreneurs working on the technology? While this appears nuanced, the bill would have required the Export Import Bank to conduct a survey on the impact of blockchain technology for five years in a row.
Similarly, in the current debate on whether a ‘Central Bank Digital Currency’ that is issued by China would end up leaving the U.S. in the dust, if there is not advocacy for the research and development of blockchain technology in the U.S., we will get left behind. And, for the man whose company started all this, Mark Zuckerberg, is the oracle of this possible future as he testified to the Committee that, U.S. dominance in tech is not preordained.
What is unfortunate is that, if this bill makes it way through the Rules Committee at 5pm today and then is addressed on the floor of Congress, the ‘deletion’ of these policy matters due to their inherent dangers – and because Members of Congress have conflated cryptocurrencies and blockchain technology. Let’s hope that soon – and perhaps with one degree greater than hope – take action to ensure our policymakers can differentiate between a cryptocurrency and blockchain technology.