As requested by the United States Congress, the US Government Accountability Office (GAO) set out four policy options to help policymakers implement blockchain technologies while increasing profits and mitigating challenges.
The technology assessment shared by GAO raised concerns about the potential of blockchain technology to improve a variety of financial and non-financial applications, despite concerns that it presents new challenges when trying to solve issues related to traditional systems. accepted:
“Blockchain can increase the speed of the 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 above flowchart, the GAO aims to help policymakers – including Congress, federal agencies, state and local governments, academic and research institutions, and industry – determine the need for 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. Find out more: https://t.co/ae21mF7IMg pic.twitter.com/F5puP4VIUJ
— US SING (@USGAO) 24 March 2022
GAO’s assessment further highlights various non-financial implementations of blockchain technology, as shown below.
While policymakers have the right to maintain the status quo, the GAO recommends four policy options to ease the decision-making process that lie behind mainstream blockchain implementation – standards, oversight, educational materials, and fair use.
Along with setting standards, GAO envisions addressing the challenges surrounding interoperability and data security. Some of the ideas include the implementation of consensus mechanisms and the establishment of internationally recognized standards.
According to the GAO, an oversight policy “could help address challenges with legal and regulatory uncertainty and regulatory arbitrage.” In addition, GAO recommends releasing educational materials to address the challenges surrounding limited understanding and undefined benefits and costs.
The fourth policy option, appropriate use, talks about mitigating the risks of financial systems and the challenges surrounding undefined benefits and costs. Highlighting the Commodity Futures Trading Commission’s (CFTC) lack of authority to collaborate with non-governmental entities, the assessment stated:
“Legal or regulatory uncertainty may prevent some potential users from benefiting from the blockchain.”
Connected: US Virginia Senate Allows State Banks to Offer Crypto Custody Services
On March 5, Virginia’s Senate unanimously approved a bill amendment request that now allows traditional banks in the region to offer virtual currency custody services.
As Cointelegraph reported, the bill was sent to delegate Christopher T. Head introduced in January 2022, stating:
“A bank may provide virtual currency custody services to its customers as long as the bank has 26 adequate protocols in place to effectively manage the risks and comply with applicable laws.”
The bill passed the Senate with a wide vote 39-0 and is waiting to be signed into law by Virginia Governor Glenn Youngkin.