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US Congress Considers Using Blockchain for Remote Voting While the White House Urged to Stay Competitive with China

The US Congress is considering using blockchain technology to enable the Senate to conduct remote voting during the ongoing COVID-19 pandemic.

According to the staff memo, the coronavirus pandemic has caused the shut down of many sectors of the society, the two chambers of Congress have always met in person to conduct business and hearings for deliberation and voting. However, these plans may need to be changed to follow social distancing orders and to protect voters. The report highlighted that the crisis emphasized the need to consider certain functions to proceed remotely when it may not be safe for members to gather in person.

The report explored a combination of different technologies to be used, including blockchain and encrypted E2EE. The core areas that the Senate identified as application areas using blockchain technology were authentication and encryption. Blockchain allows for digital records to be secure while offering high transparency and efficacy.

Voting enabled by blockchain could allow the process to be conducted remotely while offering a high level of security. “Blockchain can provide a secure and transparent environment for transactions and a tamper-free electronic record of all the votes. It also reduces the risks of incorrect vote tallies,” read the memo.

Mnuchin by 11 members of Congress to use blockchain for COVID-19 stimulus payments

11 members of Congress urged Secretary Steven Mnuchin to consider using blockchain technology to cope with providing COVID-19 stimulus checks to the country’s citizens. The Coronavirus Aid, Relief and Economic Security Act was activated on March 27, to allow eligible individuals to receive payments as of April 17. However, low-income families have struggled with this stimulus as they do not have normal accessibility to basic financial services.

With guaranteed efficacy and security, the US Treasury was suggested to use blockchain as the technology to deliver money owed to the public. The letter for Secretary Mnuchin also highlighted the urgency to stay competitive with China, urging the White House to take action on the benefits of blockchain, in both the private and public sector.

Security implications of blockchain voting

Although blockchain offers a favorable solution to remote voting systems, lawmakers have been worried about the security issues of virtual ballots. The report also noted that there are concerns about a 51 percent attack on the blockchain used to host virtual ballots, stating that a proper blockchain infrastructure must be created to eliminate threats of 51 percent attack.

Image via Shutterstock

Senate Hearing Views Digital Dollar CBDC as Critical to Maintaining Global Reserve Currency Status

The United States government’s plan for its digital dollar or central bank digital currency (CBDC) may have just reached a new level of urgency, as the US hopes to maintain its most effective tool of power—global dependence on the Federal Reserve and the US dollar.

The US Senate Banking, Housing, and Urban Affairs Subcommittee on Economic Policy conducted a hearing on July 22, entitled—Winning the Economic Competition—which mainly focused on the rising economic power struggle between China and the United States.

The subjects being strategically discussed by the Senate focused on maintaining the US dollar’s dominance as the global reserve currency for the global economy as China’s influence continues to rise. The hearing featured five speakers who covered topic such as supply chain dependence and emerging technologies like 5G—with one speaker bringing the topic back to digital dollars.

While the previous hearings have had a major focus on what role digital asset could play in maintaining the economic status quo, cryptocurrency was referenced in this Senate hearing as one of the many tools that could maintain US economic supremacy.

Christopher Giancarlo, Former Commodity Futures Trading Commission (CFTC) Chairman was in attendance in Wednesday’s Senate hearing and he turned the subject to digital dollar experimentation and the necessity to begin pilot programs to to test the uses of a Federal Reserve issued tokenized dollar.

Subcommittee Chair, Senator Tom Cotton (R-Ark) believes the idea of a digital dollar has moved beyond just academic discussion and asserted that CBDC development should be escalated—adding that is needs to be “better than Bitcoin.”

Senator Cotton said:

“Maintaining the dollar’s supremacy is not only an economic matter, it is a critical strategic matter as well. Is what allows us to have such effective sanction regimes around the world as well as other benefits.”

Cotton then invited Giancarlo to discuss the next steps required before a digital dollar could be launched. Crypto Dad, as Giancarlo is sometimes referred to due to his openness to innovation, went on to emphasize the issue of which nation’s values will define the global reserve currency. The United States dollar has enjoyed this status for the better part of a century. Giancarlo warned that China may gain the edge in the near future as it is in the process of rolling out its digital Yuan while the US is far behind in development.

Witness to the hearing, Walter Russell Mead, the James Clarke Chace Professor of Foreign Affairs and Humanities at Bard College and a member of the Hudson Institute, lent his support to the Senator Cotton’s argument. He asserted that the US Federal Reserve System is one of the nation’s “most effective tools of power.”

On the evolution of the dollar to meet the digital landscape, Mead said:

“We have to assume that as the nature of finance changes, the nature of currencies change, we have to stay at the leading edge…we need to be thinking actively about how the dollar can be a fundamental building block for economic activity in this time of the information revolution.”

SEC Commissioner Hester Peirce Confirmed for Second Term By US Senate, Crypto Mom Will Remain Until 2025

The United States Senate has voted in Commissioner Hester Peirce of the Securities and Exchange Commission for a second term that will see her remain with the regulator until 2025.

The US Senate has confirmed Securities and Exchange Commission (SEC) commissioner Hester Peirce, renewing her position for a second term via a voice vote on Aug 5.

Peirce who has earned the name ‘Crypto-Mom’ for her pragmatic and reasoned approach to dealing with digital innovation projects brought before the SEC was voted in alongside Caroline Crenshaw.

Commissioner Peirce first took office in January 2018 and received a nomination to finish the last two years of her term from US President Donald Trump. Peirce was originally nominated by former President Obama in 2015 to fill a Republican seat, without Trump’s second nomination her term would have ended on June 5.

SEC Commissioner Peirce’s second term will expire in 2025.

Crypto Mom: Voice of Reason in the SEC

Peirce earned the nickname of ‘Crypto Mom’ when she first proposed a safe harbor for digital token projects as the SEC regulating authority had become increasingly prejudiced towards cryptocurrency and blockchain-related project.

According to Commissioner Peirce’s safe harbor proposal, a three-year reprieve from securities law should be granted to developers and projects that can demonstrate they are raising funds and making progress towards an open-source network. These projects will be required to make full disclosures regarding their raised funds to the public.

Peirce highlighted that the benefits would allow developers to fundraise, investors to access more detailed project information and innovations in this emerging technology would stay in the US.

SEC Commissioner Peirce made further headlines in the cryptosphere when she spoke out and highlighted parameters that were set and heavily scrutinized in the SEC’s processing and ultimate rejection of Bitwise’s Bitcoin ETF application. Peirce argued that the standards that Bitcoin ETF’s are subjected to have never been applied to traditional markets offering.

SEC Commissioner Hester Peirce wrote that “the Commission applies a unique, heightened standard under Exchange Act Section 6(b) to rule filings related to digital assets” in a dissenting statement in response to the Bitcoin ETF rejection. Peirce wrote, “This line of disapprovals leads me to conclude that this Commission is unwilling to approve the listing of any product that would provide access to the market for bitcoin and that no filing will meet the ever-shifting standards that this Commission insists on applying to bitcoin-related products—and only to bitcoin-related products.”

During a recent appearance, Peirce was also incredibly critical of the SEC’s handling of Telegram’s TON network, which she believed was a waste of resources and ultimately helped no one.

Peirce Will Likely Continue Advocating for Innovation

Securities and Exchange Commissioner Hester Peirce has shown no signs of pulling out of her advocacy role for digital projects.

Last month on July 7, Peirce spoke at the Unitize Virtual Conference and advocated for a clear regulatory framework for crypto projects to foster innovation in the capital markets. Peirce said, “I wanted to make sure that our regulatory structure was flexible enough to accommodate innovation.”

Alluding to her previous safe harbor proposal Peirce highlighted that the benefits of clear regulation would allow developers to fundraise, investors to access more detailed project information, and innovations in these emerging technologies would stay in the US.

The exodus of tech talent from the US to Asia and Europe has been well documented and Peirce believes that’s “all the more reason for a jurisdiction like the United States to try to develop a workable framework that allows people to come and avail themselves of our market.”

While Peirce wants to see the US Government be more proactive in cutting through the regulatory uncertainty for crypto and blockchain, she also highlighted that innovation rarely comes from the public sector.

Peirce said, “Remember that innovation typically comes from outside the government sector. We need to set up a framework that allows people who spend a lot of time thinking about new ideas to continue to spend time thinking about those ideas and not a lot of time worrying about complying with regulations.”

US Senate Banking Committee Chair Sends Letter to the OCC to Clarify Crypto Payment Rules

The United States Senate Banking Committee Chair has sent a letter to the US Office of the Comptroller of the Currency (OCC) asking for clearer guidelines on cryptocurrency and digital asset payments.

Following the move by the United States Office of the Comptroller of the Currency (OCC) giving U.S banks the rights to keep custody of cryptocurrencies, the Chairman of the Senate Banking Committee Mike Crapo (R-Idaho) has sent a letter to the OCC asking it to develop “clear rules of the road” guidelines that will help address key questions regarding cryptocurrencies and digital payments.

Senator Crapo’s letter to the OCC reads:

“The cryptocurrency ecosystem is as diverse in its products and functions as the rest of financial services. These and similar innovations are inevitable, beneficial and the U.S. should lead in their development. Your office recently published a letter that clarifies national banks’ and federal savings associations’ authority to provide cryptocurrency custody services for customers. It would be prudent to provide similar clarity for payments. The U.S. should develop clear rules of the road that protect businesses and consumers without stifling future innovation.”

According to Crapo, the key questions stem from the banking committees’ public hearings on cryptocurrencies and digitalization in the payments system, including the impact of distributed ledger technology, blockchain, and stablecoins.

The Key Questions and Expectations From the OCC

As outlined in Crapo’s letter, the OCC is expected to state ‘What activities related to cryptocurrencies or crypto assets are financial services companies or bank customers engaged in and what are the barriers or obstacles to further adoption of crypto-related activities in the banking industry’, the banking regulator is also expected to clarify ‘how is distributed ledger technology is used or potentially used in activities related to banking.

The committee also wants the OCC to declare what emerging technologies to watch out for and their possible implications to the banking industry and the tools companies under the OCC jurisdiction use in complying with the OCC rules.

As the Senate Banking Committee chair prompted, the OCC is expected to provide the committee with an update on its findings as well as the next steps it intends to take with the respective technologies.

Senate Rejects Second Stimulus, Markets Plunge and Bitcoin Price Predicted to Crash to $8,000 in September

The Dow Jones and Nasdaq both plunged suddenly as the second Republican stimulus package was rejected from United States Senate consideration by Senate Democrats 52-47. But what impact will the rejection of the second-round relief have on the stimulus-driven recent bull run of the stock market and the Bitcoin price?

As the US elections get closer, Senate Democrats have voted down the latest Republican stimulus package. The recent strength of the dollar, as well as the stock markets, appear to have been riding on the back of the previous economic stimulus and the effect will most likely see the markets continue on a downtrend and most likely a significant crypto crash which could see the Bitcoin price as low as $8,000.

No Second Stimulus—No Bitcoin Bull Run For September

Immediately following the vote on the Republican $1.1 trillion HEALS Act and rejection by Democrats for the coronavirus stimulus, the Dow Jones industrial average lost 405.89 points at 27,534.58. The S&P 500 index dropped 59.77 points at 3,339.19, while the Nasdaq composite was down 221.97 points or two percent at 10,919.59.

Source: Yahoo Finance

The rejection of the stimulus bill will dry up the liquidity currently supporting the market and is predicted to move the markets into a downward trend—and things do not look good for the Bitcoin price either.

Source: Binance BTC/USD

In order to start moving in a bullish price direction, BTC will have to rise to the red line on the graph, which represents the low resistance of the previous BTC price range. As the bulls of stock market and even the bitcoin and crypto market have been driven by the injection of liquidity and economic stimulus—which has now dried up—it appears unlikely that Bitcoin will be able to generate a strong upward movement in the short-term.

Source: Binance BTC/USD

The Bitcoin price surged through to around $10,418 before correcting to around the $10,300 mark. As displayed above in the 1-day chart, the Bitcoin price continues to move within the horizontal channel, consolidating around the $10,000 mark—which it has done since its price crashed on Sept 2 and 3. Each time BTC has touched the top of this horizontal channel it drops, which is not a good indication that Bitcoin will move in an upward direction.

On our analysis, BTC/USD charts indicate that the BTC support point of $10,000 will most likely break and turn into a resistance line in the coming weeks, which would see the Bitcoin price crash to the previous support levels of $8,000 and even further should a second stimulus bill not come at all by the end of the year.

As reported by Blockchain.News, US-based crypto exchange Kraken’s August 2020 volatility the report also indicates that Bitcoin is due for a very negative performance in September that could see the pioneer crypto’s price crash before returning to a state of extreme volatility.

US House of Representatives Passes Blockchain Innovation Act On to the Senate

Two bills introduced by Representative Darren Soto—the Digital Taxonomy Act and the Blockchain Innovation Act—are now making their way to the Senate after being approved in the House of Representatives.

The two acts have been updated into the Consumer Safety Technology Act (H.R. 8128), which is a bill directing the Consumer Product Safety Commission to explore applications for AI earlier this month. The Bill is now headed for the Senate for the final vote.

What Do the Blockchain Bills Mean?

Essentially if the bills are passed, they aim to protect the public from scams and illegitimate projects—leveraging blockchain technology to combat fraud.

Specifically, the Digital Taxonomy Act (H.R.2154) provides clarity on the definitions of two terms—’digital asset’ and ‘digital unit’—and place a burden on the Federal Trade Commission to prevent unfair trade practices of both aspects. In addition, the Blockchain Innovation Act (H.R. 8153) also requires the Federal Trade Commission (FTC) to research and present information on how blockchain can be leveraged in consumer protection.

The two bills were introduced by Rep. Darren Soto (D-FL) and have been rolled into the Consumer Safety Technology Act which was introduced by Rep. Jerry McNerny (D-CA)—which as mentioned pertains to using AI in consumer safety inspections.

The act highlights that remaining competitive with digital tokens and blockchain is critical to maintain American innovation, and obligated the FTC to provide further recommendations limit the abuse of the technology while allowing the United States to remain competitive.

Congressman Darren Soto said in a release:

“As lawmakers, it’s our duty to ensure the United States continues to lead in blockchain technology […] The Digital Taxonomy Act adds greater jurisdictional clarity for a strong digital asset market in the United States.”

Rep. Darren Soto has attempted to introduce or co-sponsor multiple blockchain bills pertaining to digital assets, but so far all bills have had a very hard time making their way through the house.

On the success of passing the two bills, Soto said:

“The study mandated by the Blockchain Innovation Act is a starting point meant to give government agencies a chance to make recommendations before any bills pass with a regulatory effect[…] These recommendations will perform an educational function to Members of Congress and will pave the way for more actionable blockchain-focused legislation.”

US Senator Pat Toomey Eyes Senate Banking Committee Chair and Digital Currency Regulations

United States Senator Pat Toomey has announced that he will take on digital currency regulation and payments reforms should he become the Senate Banking Committee’s next chairman.

US Senator Toomey is running for the Chair of the Senate Banking Committee and said in a press conference on Oct. 5 that should he be elected, he will take up digital currency regulation and payments system reform.

During the online press conference, Toomey said:

“There’s very exciting things happening in technology, fintech, payment systems, the possibility of a digital currency – all of these things are really important and exciting changes and they’re going to require some new legislation, some new regulation.”

Senator Toomer is currently the running favorite to assume the Senate Banking Committee’s chairmanship, particularly if Republicans are able to maintain control of the Senate following the elections in November.

The two-term senator also said on Monday that he would not run for re-election in Pennsylvania in 2022.

Toomey Doesn’t Want Blockchain Baby Strangled in Crib

Senator Pat Toomey (R-Pa) is a former Wall Street banker and longtime proponent of deregulation.

During the Facebook Libra Senate hearing in July 2019, Toomey made his feelings known on the power of blockchain. While he joined members in grilling David Marcus, the Head of Calibra, on data sharing and consent, Sen. Pat Toomey (R-Pa.) sounded bullish on blockchain in general.

Toomey said during the hearing:

“We shouldn’t prevent what can be a tremendous financial innovation. There is a big potential in blockchain technology.”

Toomey warned against knee-jerk overregulation of the blockchain industry saying that US regulators shouldn’t “strangle this baby in its crib.”

OCC Head Brian Brooks Testifies Before Senate On Cryptocurrency and Stablecoins

The Acting Comptroller of the United States Office of the Comptroller of the Currency (OCC), Brian Brooks has testified before the US Senate Banking Committee about the growing use of cryptocurrencies and stablecoins in the country and the agency’s response to the rise of crypto.

According to the written testimony published by the Senate Banking Committee, Brooks noted that:

“Roughly 60 million Americans own some type of cryptocurrency, with a total market cap of nearly $430 billion. 33 These figures clearly illustrate that this payment mechanism is now firmly entrenched in the financial mainstream. Cryptocurrency has become a popular mechanism for sending and receiving payments for goods and services because transactions post in real time and provide convenience and security.”

On stablecoins, Brooks also revealed that its usage is on the rise in America and that and that “the rise in the use of stablecoins demonstrates consumers’ comfort with its use.”

The OCC’s Response To Growing Crypto and Stablecoin Usage

Brian Brooks noted that the OCC had responded in two major ways to the growing use of cryptocurrencies and stablecoins in the country.

The first of this direct response borders on the OCC’s directive to Banks under its regulatory oversight to begin offering cryptocurrency custody services, as Blockchain.news reported at the time. This move gave US banks, particularly those with a growing interest in cryptocurrencies to have direct legal involvement in providing crypto custody services to their customers.

Furthermore, the OCC boss noted that the regulatory body also expanded the scope of the banks to involve the holding of Stablecoin reserves as reported back in September. With this testimony prompted by the request from the Senate’s banking committee chair, Mike Crapo to the OCC to provide clarity to crypto payments and usage in the country.

Based on the dynamic nature of the blockchain and crypto ecosystem, Brooks concluded by saying:

“The agency continues to consider other issues relevant to cryptocurrency assets and distributed ledger technology including the application of the technology to support payments services conducted within the federal banking system.”

Former Bakkt CEO Kelly Loeffler Loses Crucial Republican Senate Seat

Former CEO of Bakkt Kelly Loeffler (R-Ga) has lost a crucial Republican Senate seat for the state of Georgia to Democrat Raphael Warnock in a special election held on Tuesday in the United States.

Loeffler left her role as the CEO of Bakkt crypto custodian firm in late December 2019 to replace Sen. Johnny Isakson who was forced to step down due to health complications.

Loeffler’s opponent, Democrat Raphael Warnock has now won the US Senate seat in Georgia, becoming the state’s first Black senator.

Battle For The Senate

Tuesday’s special election will be a determining factor to decide which party will gain control of the Senate. While Warnock has defeated Loefller—Senate control will now come down to the vote between Jon Ossoff (D-Ga.) and Sen. David Perdue (R-Ga.) who are running for Georgia’s other seat in the upper house.

Should Ossoff join fellow democrat Warnock in victory, President-elect Joe Biden’s party will gain control of the Senate. Ossoff winning the vote would create a 50-50 tie situation which would Vice President-elect Kamala Harris to break the tie and give Democrats the upper hand in the upper house. Democrats have also been in control of the House of Representatives since 2018.

However, should Perdue manage to oust Ossoff, the Republicans would enjoy control of the Senate for another two years with current Sen. Mitch McConnell (R-Ky.). In this scenario, McConnell would be in a position to control key confirmation votes for both Biden’s legislative agenda as well as for Cabinet nominees, such as Janet Yellen, Biden’s pick to run the Treasury Department.

According to Bloomberg, the Ossoff-Perdue race is still too close to call at the time of writing, but both are showing confidence in winning with Ossof threatening legal action should the vote does not go the Republican’s way.

Loeffler Does Not Concede

Kelly Loeffler served as CEO of Bakkt from the time of its establishment in mid-2018 up until her appointment to Congress. Despite her rich crypto background, Loeffler has been rather sheepish on crypto and Bitcoin since taking office and has not promoted the nascent asset class in anyway.

Loeffler has so far refused to concede to Warnock, seemingly following President Donald Trump’s lead who has so far lost over 60 legal battles trying to overturn several states’ results after losing the Presidential election to Joe Biden.

The former Bakkt CEO was embroiled in controversy in early 2020 after the Daily Beast reported that she and her husband, Intercontinental Exchange (ICE) CEO Jeffrey Sprecher, had sold between up to $3.2 million in stocks after she received a confidential Senate briefing on the potential outbreak and economic disruption of COVID-19 virus. An ICE statement in support of Loeffler claimed that financial advisors to the two had made those transactions independently and they were unrelated to the private briefing she received.

Nayib Bukele Criticises U.S. Does Not "Stand for Freedom", the Senate Comm Passes ACES Bill

El Salvador President Nayib Bukele has lashed out at the United States Government after the Senate Foreign Relations Committee passed the Accountability for Cryptocurrency in El Salvador Act (ACES) Bill, which is now slated to head to the full house for voting.

The ACES Bill seeks to monitor how El Salvador implements its Bitcoin law which grants the digital currency a legal status alongside the United States Dollar.

The bill will grant relevant U.S. agencies the right to monitor the impact of BTC as a legal tender on the country’s macroeconomic stability and public finances. It will also assess the role of Bitcoin in the rule of law in the country and its democratic governance. While the date of voting in the bigger house has not been announced, the bill grants the agencies the right to peek into the most salient aspects of monetary governance, including whether the country is adhering to relevant anti-money laundering rules.

Lamenting on Twitter, Nayib Bukele said he never dreamt of a time when the U.S. government would be scared of the work that is being done in the Central American nation. Bukele said the U.S. government does not support freedom as is popularly being said of the North American nation.

“The U.S. Government DOES NOT stand for freedom, which is a proven fact. So we will stand for freedom. Game on!” Bukele said in a tweet.

El Salvador’s adoption of Bitcoin as a legal tender has always met with resistance from prominent intergovernmental organizations. While the International Monetary Fund (IMF) and the World Bank are amongst those who have expressed pessimism concerning the country’s Bitcoin adoption move, the likely passage of the ACES Bill by the U.S. Senate has formed a more unsettling struggle for the El Salvadoran president.

Either way, things play out, Bukele is still arguably committed to Bitcoin’s financial freedom.