At the request of the United States Congress, the United States Government Accountability Office (GAO) put forward four policy options to help policymakers implement blockchain technologies while improving the benefits and mitigate the challenges.
The technology evaluation shared by the GAO recognized the potential of blockchain technology to improve a variety of financial and non-financial applications despite concerns about introducing new challenges in trying to solve problems related to traditional systems:
"A blockchain could increase the speed of a title registration system and reduce the cost of title insurance by making title registration simpler and more reliable."
However, some of the challenges highlighted in the study include uncertain benefits, data reliability, and legal compliance.
With the flowchart above, the GAO aims to help policymakers, including Congress, federal agencies, state and local governments, academic and research institutions, and industry, determine the requirement of blockchain implementation. .
Curious about blockchain and how it is used? In our latest blog post, we dive into the many uses of blockchain and how to address emerging policy challenges. Know more: https://t.co/ae21mF7IMg pic.twitter.com/F5puP4VIUJ
- US GAO (@USGAO) March 24, 2022
The GAO assessment further highlighted several non-financial implementations of blockchain technology, as shown below.
While policymakers are entitled to maintain the status quo, the GAO recommended four policy options to ease the decision-making process behind conventional blockchain implementation: standards, oversight, educational materials, and appropriate uses.
By establishing standards, the GAO anticipates addressing challenges related to interoperability and data security. Some considerations include the implementation of consensus mechanisms and the establishment of internationally recognized standards.
According to the GAO, a supervisory policy can "help address challenges related to legal and regulatory uncertainty and regulatory arbitrage." Additionally, GAO recommends the issuance of educational materials to address challenges related to limited understanding and undefined benefits and costs.
The fourth policy option, appropriate uses, talks about mitigating challenges around risks to financial systems and undefined benefits and costs. Highlighting the lack of authority of the Commodity Futures Trading Commission (CFTC) to collaborate with non-governmental entities, the assessment states:
โLegal or regulatory uncertainty may prevent some potential users from benefiting from blockchain.โ
Related: US Virginia Senate Allows State Banks to Offer Crypto Custody Services
On March 5, the Virginia Senate unanimously approved a request for an amendment to the bill that now allows traditional banks in the region to provide virtual currency custody services.
As Cointelegraph reported, the bill was inserted by Delegate Christopher T. Head in January 2022, stating:
"A bank can provide its customers with virtual currency custody services as long as the bank has adequate protocols in place to manage risks effectively and comply with applicable laws."
The bill passed the Senate by a wide vote of 39-0 and is awaiting signing into law by Virginia Governor Glenn Youngkin.
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