Tag: policy

Around The Block Member Viewpoints: Anoop Nannra, Cisco

by Chamber

As Head of Blockchain at Cisco, Anoop Nannra emphasizes the importance of blockchain as a tool to benefit global supply chains and describes being a part of dialogue with regulators worldwide as a motivator for joining the Chamber. Anoop portrays this work as advocating and encouraging “policymaker decisions in a manner that is enabling of innovation.” He previously spoke at DC Blockchain Summit 2018 (video) and will once again return to keynote this year in Washington, DC.

View the latest Around The Block: Member Viewpoints video featuring Anoop, and come to see his keynote at DC Blockchain Summit 2019, March 6-7.

Technological Innovation and Economic Growth – A Legislative Toolkit for State Legislators

by Chamber

Technological Innovation and Economic Growth – A Legislative Toolkit for State Legislators

Technological Innovation and Economic Growth – A Legislative Toolkit for State Legislators

The year 2018 saw legislators in many states introduce legislation relating to blockchain, smart contracts, and distributed ledgertechnologies (DLT) in an effort to promote their use and encourage businesses related to these technologies to locate in their state.  This is an important development – policy makers at high levels of government are recognizing the potential of this technology and sorting out ways to promote it.  Some efforts, such as legislation coming from Wyoming, were quite progressive.  Others were very well-intentioned, but could have benefitted from additional guidance from the industry.

We have prepared this Toolkit as a resource for state legislators as they explore ways to encourage these industries to grow and bring economic benefits to states. In it, we explain the importance of blockchain and DLT and the economic and social benefits they provide; give an overview of legislative developments; explain legislative principles and options available to legislators; explore how blockchain technology can be used in various industries; provide an overview of smart contracts; and make available additional technical resources in our appendix and glossary.

Blockchain and DLT offer immense possibilities for business, government, and consumers.  These include the opportunity to spur economic growth and optimize cost efficiencies. It’s no wonder that policymakers are starting to realize the importance of blockchain technology, the commercial potential it brings, and the need to support its responsible growth.

Countries around the world are taking this opportunity to pass legislation and develop regulatory frameworks to encourage blockchain companies to relocate to their jurisdictions. 

While the United States has grown accustomed to technological progress, it does not automatically follow that America will maintain its preeminence in the blockchain sector. The United States needs to foster the same interest and energy it had for the development of the Internet and harness it for blockchain to ensure that it remains a leader in technological advancement.

This Toolkit serves as a resource to those policymakers who seek to encourage growth of the blockchain industry to ensure state economies and consumers can benefit from this transformative opportunity.  Thus, the principles and proposals offered in this Toolkit will assist legislators in fostering U.S. competitiveness through a balance of light-touch regulation and proactive laws enabling use of this important technology.

The Future of Voting Is Blockchain

by Chamber

The Future of Voting Is Blockchain

The Future of Voting Is Blockchain

By Perianne Boring

The U.S. has suffered its share of challenges when it comes to collecting and counting votes – from long lines at the polls, to ensuring citizens are registered (and motivated) to vote, to questions surrounding whether a chad was left “hanging” during the 2000 Presidential election, to a myriad of other concerns. No matter what side of the political aisle you fall, we can all agree that the process of casting a ballot could use some improvement.

Despite having evolved over time from the physical tokens used in ancient Athenian democracy to medieval little balls (“ballots”) to paper slips to mechanical voting machines to punch cards to optical scanners — the process of voting continues to be vexed with potential vulnerabilities and shortcomings.

Today, with the midterm elections upon us, the public is eagerly awaiting details on the progress made in the voting process. Could blockchain offer the solution?

How it Works: Blockchain Creates a Tamper-Free Electronic Record

One of the reasons that electoral officials have been slow to migrate voting online is fear that election integrity could be compromised by hackers. It seems the headlines are riddled with concerns regarding cybersecurity, so it’s no wonder. But that’s where blockchain comes in, which promises to combine much-needed ballot security with voting convenience.

Blockchain integrates cryptography into software in a unique way.  It creates a tamper-free record that can easily be checked to ensure votes are accurately recorded.

Due to the secure and immutable nature of blockchain, votes may be cast by computer or mobile device instead of having voters show up at a local polling place or cast a mail-in-ballot to be processed manually by election officials. Votes tracked through a blockchain provide for a quicker, tamper-proof way of counting votes, which could lead to greater voter participation, better ballot security, and at lower cost.

Blockchain’s Bolstered Security is Being Put to Practice Today

West Virginia, for example, is piloting a program to allow its military workers to vote remotely and securely via a blockchain-enabled platform from abroad. This November, all overseas workers from West Virginia will be offered the opportunity to vote via the blockchain network which will distribute and store the votes in 16 different locations – meaning hackers would need to hack into multiple locations in order to tamper with the results. In the nonpolitical voting zone, the Rock and Roll Hall of Fame used Chamber member Votem’s blockchain voting system to register 1.8 million votes. That 2017 Hall of Fame inductee process proved that blockchain voting could be effectively and efficiently used by millions, without fraud compromise or attacks.

Votem is introducing a token which will enable citizens to easily vote online, including from their mobile devices with an unprecedented level of verifiability, accessibility, security, and transparency.

Pete Martin, Votem Founder and CEO, sees the public’s leeriness of electronic voting and recent voting scandals as “both an opportunity and an issue.”

“It just requires more education on our part. People are fearful, and I get it. But we’re not going to shirk our responsibilities to make sure we can engender the trust with elections officials and people buying the system,” said Martin.

The implications for developing countries which do not yet have the voting infrastructure that the United States has are even more dramatic and could prove a powerful instrument for the continuing spread of representative democracy.

Voting should be as easy as hopping online from home to pay bills from your checking account. In today’s digital age, we can do better. By using blockchain to make voting more convenient and secure, we will encourage more people to vote.

Voting began, in ancient Athens, by the “casting” of clay or metal tokens.  Now, in the 21st century, we are observing the emergence of 21st century tokenization of voting: casting our ballots via blockchain technology.

Welcome to blockchain: the 21st century way of voting.

 

Supporting a Coordinated Approach Among Industry and Regulators Globally

by Chamber

Chamber Supports Coordinated Approach Among Industry and Regulators Globally

Chamber Supports Coordinated Approach Among Industry and Regulators Globally

Recently, almost a dozen global regulators came together to support regulatory harmonization across national borders. The creation of the Global Financial Innovation Network (GFIN) was designed to do just that, to: (i) establish a network of regulators; (ii) facilitate collaboration on policy work and regulatory trials; and (iii) support B2B and B2C cross-border trials. The creation of this new body with a global reach is an important signal that regulators worldwide are both understanding the significant potential of blockchain technology and actively establishing ways to support it. Challenges remain, however, in working out the details of such a collaboration.

The Chamber of Digital Commerce recently submitted comments to the GFIN’s Consultation Document, issued in August, to let the regulators know, in a unified voice, of the critical need for support as well as the regulatory lessons learned of the blockchain ecosystem.

After consultation with interested members, we stressed that adopting best regulatory practices in harmony will allow regulators around the world to better protect consumers without imposing excessive, onerous, gratuitous, or duplicative compliance requirements on the industry. Concepts such as regulatory sandboxes and harmonized policy objectives are exactly what this industry needs to rethink and revamp its oversight of growing technologies.

The Chamber supports the initiation of the GFIN as a mechanism for harmonization of best regulatory practices. Nevertheless, a problem noted in many digital environments is the concept of inconsistent and sometimes duplicative regulatory regimes across the globe. Ill-considered requirements will have the undesired consequence of crushing innovation and economic growth. Such a development would be inimical to national and global welfare and to the mission of the regulators themselves.
To this end, we cautioned that the GFIN should not serve as a mechanism to proliferate such regulations, which would neither serve the safety of consumers nor the growth of a new high-tech sector.

Among specific concerns the Chamber expressed in its comments are the large number of agencies in the United States engaged in the exercise of regulatory authority in addition to the GFIN’s primary U.S. counterpart, the Bureau of Consumer Financial Protection. We support the Bureau’s foresight and innovation in joining such a group. That said, other U.S. regulatory agencies – including the CFTC and SEC – are entirely autonomous from the Bureau. The GFIN must consider how it will cover U.S. businesses within its regulatory sandbox if its U.S. participants are subject to rules maintained outside its borders. Further, any new regulatory harmonization should simplify regulations, not create duplicate or overlapping regimes. These are challenges that are difficult to solve, but we are excited to work with the GFIN to find innovative ways to solve them.

Overall, the Chamber views the formation of the GFIN as an important signal that regulators worldwide are understanding the important potential of blockchain technology and are actively establishing ways to support it. We encourage thoughtful and meaningful steps such as these to help businesses gain a foothold, grow, and scale in this digital, global industry.

The Chamber is grateful to its members for providing their time and experience to develop this important proactive response. We look forward to providing significant ongoing support to the GFIN in making its recommended protocols optimally constructive, both in protecting consumers and fostering the development of the invaluable emerging technology of distributed ledgers and blockchain.

To review the Chamber’s comment letter to the GFIN, please click here.

Recommended Reading: Life After Google

by Chamber

Recommended Reading:
Life After Google

There have been many books written about the blockchain. The pace of publication is quickening as the technology matures. The Foundation of the Chamber of Digital Commerce shares some of the most interesting books and publications of interest to the blockchain and digital asset community. View recommendations here.

Life After Google: The Fall of Big Data and the Rise of the Blockchain Economy

by George Gilder

Published:  July 17, 2018

From Amazon.com:

“The Age of Google, built on big data and machine intelligence, has been an awesome era. But it’s coming to an end. In Life after Google, George Gilder—the peerless visionary of technology and culture—explains why Silicon Valley is suffering a nervous breakdown and what to expect as the post-Google age dawns.

Google’s astonishing ability to “search and sort” attracts the entire world to its search engine and countless other goodies—videos, maps, email, calendars….And everything it offers is free, or so it seems. Instead of paying directly, users submit to advertising. The system of “aggregate and advertise” works—for a while—if you control an empire of data centers, but a market without prices strangles entrepreneurship and turns the Internet into a wasteland of ads.

The crisis is not just economic. Even as advances in artificial intelligence induce delusions of omnipotence and transcendence, Silicon Valley has pretty much given up on security. The Internet firewalls supposedly protecting all those passwords and personal information have proved hopelessly permeable.

The crisis cannot be solved within the current computer and network architecture. The future lies with the “cryptocosm”—the new architecture of the blockchain and its derivatives. Enabling cryptocurrencies such as bitcoin and ether, NEO and Hashgraph, it will provide the Internet a secure global payments system, ending the aggregate-and-advertise Age of Google.

Silicon Valley, long dominated by a few giants, faces a “great unbundling,” which will disperse computer power and commerce and transform the economy and the Internet. Life after Google is almost here.”

“Google’s algorithms assume the world’s future is nothing more than the next moment in a random process. George Gilder shows how deep this assumption goes, what motivates people to make it, and why it’s wrong: the future depends on human action.” — Peter Thiel, founder of PayPal and Palantir Technologies and author of Zero to One: Notes on Startups, or How to Build the Future

“If you want to be clued in to the unfolding future, then you have come to the right place. For decades, George Gilder has been the undisputed oracle of technology’s future. Are giant companies like Google, Amazon, and Facebook the unstoppable monopolistic juggernauts that they seem, or are they dysfunctional giants about to be toppled by tech-savvy, entrepreneurial college dropouts?” — Nick Tredennick, Ph.D., Chief Scientist, QuickSilver Technology

Big News for Blockchain Policy: U.S. Congressmen Support Blockchain Innovation & Regulatory Clarity

by Chamber

Big News for Blockchain Policy:
U.S. Congressmen Support Blockchain Innovation & Regulatory Clarity

October 3, 2018

Big News for Blockchain Policy: U.S. Congressmen Support Blockchain Innovation & Regulatory Clarity

By Chamber of Digital Commerce

Last week garnered unprecedented support for blockchain technology in the U.S. Congress, with significant progress in growing the Blockchain Caucus leadership and in taking steps to clarify the laws impacting use of the technology. Specifically, two resolutions were introduced to foster broad support for light touch regulation of blockchain and digital currency activity. Three bills were proposed to help alleviate uncertainty surrounding application of certain tax treatment, exclusions from money transmitter registration and licensing, and clarification around smart contracts.  Finally, 15 Members of Congress wrote to SEC Chairman Jay Clayton requesting further clarification on the treatment of digital tokens under securities laws.

These Congressional efforts (below) demonstrate that education and advocacy is creating true blockchain champions in government and is broadening the understanding and determination of more Members of Congress to promote real policy solutions for our industry. But, more needs to be done. We continue to advocate in Washington, DC and beyond to ensure that this momentum translates into the implementation of blockchain-friendly policies for industry.

The Latest Blockchain Developments from Capitol Hill:

 

    • The leadership of the Congressional Blockchain Caucus is growing. Bill Foster (D-IL) and Rep. Tom Emmer (R-MN) have joined Rep. David Schweikert (R-AZ) and Rep. Jared Polis (D-CO) as co-chairs of the Caucus.  We look forward to more visionary support from these leaders in the coming months.
      • Tom Emmer introduced three pieces of legislation: (1) H. Res. 1102, a resolution that supports blockchain and digital currencies; (2) H.R. 6974, a bill clarifying that certain non-controlling service providers are exempt from federal money transmitter licensing and registration requirements; and (3) H.R. 6973, a bill protecting taxpayers who have received forked convertible virtual currency from IRS penalties until the IRS can provide clearer guidance on these types of gains. Congressman Emmer is clearly making strides in his new role as a co-chair of the Congressional Blockchain Caucus. In case you missed it, he gave an inspiring speech calling for a light touch to regulation at our DC Blockchain Summit earlier this year.
        • David Schweikert introduced two pieces of legislation. H. Res. 1108, a resolution recognizing blockchain as a technology with “incredible potential that must be nurtured through support for research and development, and a thoughtful and innovation-friendly regulatory approach.” It summarizes the potential promise of blockchain to government, businesses, and consumers and outlines the industries and areas that stand to benefit from it, including education, identity, and cybersecurity. H.R. 7002 seeks to amend the E-SIGN Act to confirm the applicability of blockchain and smart contracts within laws governing electronic records and signatures. It pursues remedying the problem of a developing patchwork of state legislation addressing the use of blockchain and smart contract technology in electronic signatures and records. We have been vocal on this issue for quite some time. (Our most recent white paper, “Smart Contracts: Is the Law Ready?,” discusses our position in greater detail and was also published last week.) Congressman Schweikert has been a steadfast leader in Congress on these issues (watch him talk about the amazing potential of blockchain technology at our DC Blockchain Summit!), and we look forward to further collaboration to support industry-related topics.
          • Over the past year, the Congressional Blockchain Caucus convened a series of the roundtables with industry leaders covering: (1) digital identity; (2) payments; and (3) supply chain. The series resulted in a reportentitled, “Understanding Blockchain’s Promise for Government,” published in consultation with the Caucus outlining the findings made during the roundtables.
            • Ted Budd (R-NC), along with 14 other members of Congress, sent a letter to SEC Chairman Clayton asking for more regulatory clarity for the token industry. The letter requests that the SEC elaborate on the criteria used to determine when offers and sales of digital tokens should properly be considered “investment contracts,” and to confirm that digital tokens originally sold as investment contracts can become non-securities. The letter also requests confirmation regarding statements made in SEC Director of Corporation Finance Bill Hinman’s June 2018 speech “When Howey Met Gary (Plastic)” (and expresses appreciation for statements made by SEC Commissioner Hester Peirce in her speech Motherhood and Humble Pie). Finally, the letter seeks more information about the various tools the SEC has to provide further guidance to innovators.
              • Warren Davidson (R-OH) hosted a forum on the regulation of digital currencies and initial coin offerings (ICOs). During the event, he discussed the legislation that he has been developing, which may include preemption provisions for state licensing requirements for entities such as token trading platforms. During the forum, Paul Atkins, former SEC Commissioner, CEO of Patomak Global Partners, and Co-Chair of the Chamber’s Token Alliance, while discussing the state licensing preemption provisions said, “[w]e have 50 states here, and those states have many different people who have interests in securities markets.”

Crypto For Congress Op-Ed

by Chamber

Why Every Member of Congress Just Received Bitcoin

Op-Ed by Perianne Boring, Founder & President, Chamber of Digital Commerce

Learning by doing is the most effective way to learn something new, especially when it comes to technology. Our brains respond and adapt through experiential learning. Think of the first time you sent an instant message, made your first call on a mobile phone, downloaded your first app on a smart phone, or set up your first social media account. Receiving your first cryptocurrency is a teachable moment. 

Many Americans have already experienced their first digital currency transaction and are rapidly embracing the technology.  According to a study by Coin Metrics, 15% of all American adults – and 27% of Millennials – own some form of cryptocurrency. In addition, more than 33%. of small and medium-size businesses in America are now accepting cryptocurrencies as payment for goods and services.

Since Bitcoin’s inception in 2009, the idea and promise of blockchain technology has seized the imagination of engineers, scientists and technologists around the world. These nascent and evolving innovations offer immense possibilities for business, government, and consumers. The United States has a unique opportunity to catalyze rapid economic growth, while fostering and encouraging innovation towards a new digital economy for the whole world to use.

Elected officials alike must understand that the United States’ technical preeminence is at risk if we fail to acknowledge the role blockchain technology will play in the global economy for many generations to come, similar to the Internet. Technology providers estimate that 10 percent of global GDP will likely be stored on blockchain technology by 2025 to 2027.     

Education is the first step we must take to bring policymakers together to gain widespread support for a successful path forward for digital assets and ensure the benefits of blockchain technology are realized in the United States.   The Chamber of Digital Commerce exists in part to offer education and hands-on learning to Members of Congress that will empower them to receive and send cryptocurrencies and use blockchain technology.

While cryptocurrency is another way to pay for something digitally, there  is much, much more going on beneath the surface. Blockchain technology, the technology underpinning cryptocurrencies, doesn’t just keep track of financial transactions, it can also serve as a timestamping method akin to a digital notary, enabling new forms of corporate and social organization, and improving the way we transact digitally.  

Additionally, blockchain’s open, public ledger technology enables transactions to be traceable for law enforcement purposes and has been successful in protecting financial systems and the public from bad actors. 

Today, many small and medium-sized businesses accept cryptocurrency as payment for goods and services. It’s time for Congressional campaigns to do the same.

One of the biggest challenges campaigns face is fundraising. Most Members of Congress spend hours a day on fundraising efforts alone, oftentimes asking the same pool of long-time supporters for ever more money. It’s a necessary, but time-consuming distraction from governing, with an imperfect and unpredictable return on investment.

Just think of the ‘first-to-market’ benefit past candidates had who embraced websites, email, and social media. These forward-thinkers gained a strategic advantage because of their ability to understand and leverage the new technology before their competitors.

The United States has one of the lowest rates of youth voter turnout in the world. If politicians want to appeal to younger voters, they need to speak their language and reach them in ways that resonate.  More than 89 million Millennials who hold some form of cryptocurrency today are passionate about this new system of money and are likely to support candidates who embrace its possibilities.

Just as campaigns use social media to target different demographics, campaigns rely on a variety of different payment methods to solicit donations from different communities. Imagine if campaigns told direct mail donors that they could give only by credit card, or donors over the phone they had to go to a website. If you don’t let donors give and engage how they want to, they won’t.

Every day, cryptocurrency takes another step toward mainstream use. Investors are allocating more of their portfolios to it, entrepreneurs are pivoting their businesses towards it, and, perhaps most importantly, young people are drawn to it. Embracing cryptocurrency signals to those who believe in it that Members of Congress are in tune with the latest, cutting-edge technology.

Perhaps most importantly, for the U.S. to maintain its global leadership, we must remain at the forefront of advanced technologies. Blockchain might soon be considered ‘critical infrastructure’ within the new digital economy. China and the E.U. understand this and are already well ahead of the curve. Separately, each has publicly declared they want to be the global leader of developing blockchain technology and have strategic national initiatives underway. This would be a significant challenge to both our national security and economic security to have foreign actors controlling the systems and governance that will power the digital economy. 

Accepting cryptocurrency campaign contributions is one small yet impactful way Members of Congress can demonstrate their commitment to helping the U.S. maintain its technological leadership.

We at the Chamber are ready to help all Members who are ready to learn about blockchain technology and better understand its enormous potential for innovation and economic growth.

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Perianne Boring is the Founder and President of the Chamber of Digital Commerce, the largest trade association dedicated to supporting the blockchain industry and educating policymakers on how the technology works while addressing regulatory concerns.