Research on the Institute of Information and Communication: Progress and Thinking on the Regulation and Legislation of Blockchain Technology in the United States

In addition to being applied to cryptocurrencies such as Bitcoin, blockchains are considered to have other broad application potentials and help to operate cost-effectively and safely. In recent years, the US government has been closely watching the development of blockchain technology and has carried out pilot projects and proof of concept in various government departments. In 2018, the US federal government and state governments introduced blockchain-related legislation. The US Congress, the National Institute of Standards and Technology (NIST) of the Ministry of Commerce successively issued the "Joint Economic Report 2018" and "Blockchain: Background And policy issues, "blockchain and applicability in government applications", "blockchain technology overview" and other reports, initially clarified the US government's thinking on regulation and development.

Keep track of technology developments and reduce prior judgment and intervention. On the one hand, the US federal government recognizes that blockchain has many other application potentials besides cryptocurrency and helps to operate economically and safely. On the other hand, it is pointed out that the blockchain technology is still in the early stage of development, and there are many hype at present. The technology has not been well understood. The blockchain raises many regulatory and legislative challenges that should be carefully addressed and provide appropriate guidance to the market without pre-judging and limiting technology development. Regulators should coordinate and ensure consistency in policy frameworks, definitions and jurisdiction. Governments at all levels should consider and test new uses of blockchain technology to enable governments to perform their duties effectively. The public and private sectors work together to ensure the rapid deployment of new technologies and protect citizens' rights from harm.

Pay attention to national security risks and make safety assessment legislation first. In December 2017, Trump signed the 2018 National Defense Authorization Act. Within 180 days after the implementation of the law, the Secretary of Defense took the lead in conducting a security assessment of blockchain technology. The evaluation dimensions include: blockchain technology and other distributed Database technology for potential offensive and defensive network applications; use of the technology by foreign forces, extremist groups and criminal networks; use or planned use of the technology by federal and infrastructure networks; and critical infrastructure networks for cyber attacks Vulnerability.

Carry out government pilot projects and actively explore the application of blockchain. At present, the US General Administration, the Ministry of Finance, the Food and Drug Administration, the Department of Homeland Security and many other US federal agencies are trying to manage financial management, government procurement, IT assets and supply chain management, health care, and government certification (such as VISA, SSN). Blockchain technology in areas such as birth certificates, patents and trademarks, and personnel data. Based on current research and pilot conclusions, according to the “Applicability of Blockchain in Government Applications”, public records, budget allocation, supply chain monitoring, and government approval procedures are considered to be the most suitable areas for blockchain use. In the choice of blockchain type, the license chain is considered to be a better choice in government applications, because all parties have a certain degree of trust in a central organization, so they can choose to be more efficient than non-licensed chains such as Bitcoin. At the same time, a cheaper consensus mechanism.

Provide guidance and guide the rational development of industry. With the rapid development of the blockchain, many companies have developed anxiety and do not know whether to adopt this technology. The US federal government has guided this. In several reports issued in 2018, it was pointed out that the blockchain is not a killer technology and has not yet completely replaced the existing system. It also identifies many of the challenges currently facing blockchain development, including scalability, data security, interoperability, and personally identifiable information management. Federal agencies such as the US Department of Homeland Security and the National Institute of Standards and Technology (NIST) have also given ways to help determine whether a blockchain is suitable for a particular system or activity. NIST also warns the industry that once the blockchain is widely implemented and adopted, it is difficult to change it. Once the data is recorded in the blockchain, the data is usually permanent even if an error occurs. Blockchain should be used in appropriate circumstances on an investigative basis, not blindly because it is a new technology.

The states compete to legislate to recognize the legitimacy of the blockchain and compete for opportunities for development . Since the beginning of 2018, there have been competing legislations in various states in the United States. At present, at least 12 states have introduced blockchain-related legislation. In general, these legislations mainly address the following issues: First , the blockchain is a legal electronic record that can be used for signatures, contracts, records, etc., such as Arizona, Nevada, Ohio, Tennessee. State, Illinois, etc. Second, it is forbidden to impose taxes or charges on the use of blockchain technology, as well as impose restrictions on certificates and licenses. For example, Colorado, Nevada, and Illinois. The third is to allow the private sector to use blockchain technology to manage shareholder information and stock issuance, transaction records, and more. For example, Delaware, California, Wyoming, and the like. The fourth is to allow government departments to use blockchain technology. For example, Colorado requires state agencies to consider using distributed ledger technology when accepting business license records and distributing departmental data to other departments and agencies. In addition, several state legislation, such as California, requires relevant research and evaluation of blockchains. There are some concerns in the industry and academia about the competing legislation in the states. For example, the inconsistencies in the definition of blockchain by states may create new barriers to business; and the blockchain characteristics that are prematurely defined in legislation. For example, "unchangeable" may not match the future blockchain.

The American experience has brought some useful enlightenment to China. First, attach importance to and strengthen the pre-research on the blockchain problem. Blockchain development is still in its early stages, and its definitions, characteristics, applications, risks and challenges are still evolving. Pre-study on policies, technical characteristics, applications, applicability, etc. should be carried out in advance, and pilot projects and proof-of-concepts should be carried out in key areas to establish a basis for timely and appropriate intervention in blockchain control to avoid regulatory vacancy or over-regulation. Healthy development of the industry creates a good environment. The second is to guide the rational development of the industry. As one of the most popular technologies, blockchain has many excessive hype. It is necessary to formulate guidance on the basis of relevant research and guide the industry to objectively and rationally treat blockchain technology, and to affirm the positive value of blockchain technology. Avoid blind investment and use. The third is to pay attention to blockchain security risks and strengthen pre-assessment. The decentralized, non-deletable features of the blockchain may pose security risks in areas such as cross-border data flow, content management, network security, critical infrastructure protection, personal privacy protection, and user rights. Although the US government currently has no control over blockchain technology, it has passed legislation to pre-assess the national security risks that the blockchain may bring. China should also carry out pre-assessment on key security areas as early as possible, and propose the deployment of preventive measures.

About the Author:

1. Yang Minmin, Chief Engineer, Legal Research Department, Institute of Policy and Economics, China Academy of Information and Communications Technology

Contact: [email protected]

2. Lun Yi, Deputy Director, Legal Research Department, Institute of Policy and Economics, China Academy of Information and Communications Technology

Contact: [email protected]

Source: China Xintongyuan

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