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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

US Legislators Approve Digital Taxonomy and American COMPETE Blockchain Bills in Tech Race with China

US lawmakers approved two bills, the American COMPETE Act and the Digital Taxonomy Act, raising the stakes in an active race against China for innovation in the blockchain and technological development sector.

Lawmakers push for blockchain advancement

The two bills proposed will then go on to the US House of Representatives for a vote. Through a webinar moderated by the Chamber of Digital Commerce, the American Competitiveness of a More Productive Emerging Tech Economy Act (American COMPETE act) was discussed. The legislative act advocated for research and development for the purposes of furthering blockchain technology implementations in the United States. It appealed to the Department of Commerce and Federal Trade Commission (FTC) at a crucial time, as China-US tensions continue to escalate due in their emerging tech cold war.

Through the American COMPETE act, US lawmakers wish to further research on all disruptive and emerging technologies, including the Internet of Things (IoT), Artificial Intelligence (AI), and quantum computing. The bill has been advocated for by Democratic Representative Darren Soto and his co-sponsors.

Digital Taxonomy Act

In addition to passing the American COMPETE Act, the Committee on Energy and Commerce also approved the Digital Taxonomy Act. If the bill passes in US Congress, the Department of Commerce and the FTC would be given the green light to research and report on the state of blockchain technology in the country. In addition, it would enable the Federal Trade Commission to propose regulatory measures regarding digital token transactions, as well as monitor illicit crypto activities.

Will China be the first to deploy a functional CBDC?

US lawmakers have been pushing for a national blockchain development strategy with the federal US government for quite some time, using China’s Blockchain Service Network as a reference to back the argument that the country needed innovative technological implementations.

China is currently in the lead in the blockchain sector, in terms of research, framework, and regulation. A national blockchain strategy has already been implemented by the economical giant, with a State Blockchain Service Network (BSN). Pilot projects on digital currencies are also in the works, as China is reported to be in the final steps of implementing their digital currency electronic payment (DCEP), stating that it will be ready in the upcoming months.

Ripple co-founder Chris Larsen has said that China has placed itself in the optimal position to become the global financial leader, through a series of strategic long-term developments. The Chairman had disclosed in the past:

“China should make the US paranoid about maintaining our lead. It has already achieved near-universal use of digital payments domestically through financial tech giants such as Alipay and WeChat, and it’s on the cusp of issuing a state-controlled digital currency-the digital Yuan.”

With the American COMPETE act and the Digital Taxonomy Act, the US is aiming to advance in the race for global blockchain dominance.

Microsoft’s Bill Gates on Big Tech Antitrust Hearing – Government Scrunity Inevitable with Tech Success

Bill Gates discussed the regulatory policies that were brought up in the antitrust hearing opposing US Congress and Big Tech – Amazon, Apple, Facebook, and Google (Alphabet).

Bill Gates on antitrust Big Tech hearing

In an interview with CNBC, co-founder and former CEO of Microsoft Bill Gates stated that during his leadership at the tech giant, he had been naïve in thinking that the company would not be scrutinized by the US government. He then disclosed that the chances of the outcome of the Big Tech antitrust hearing resulting in established regulations inhibiting Amazon, Apple, Facebook, and Google’s movements were “pretty high.” The multibillionaire said:

“Whenever you get to be a super-valuable company, affecting the way people communicate and even political discourse being mediated through your system and higher percentage of commerce — through your system — you’re going to expect a lot of government attention.”

Referencing the antitrust challenges that Microsoft experienced twenty years ago, Gates added:

“I was naive at Microsoft and didn’t realize that our success would lead to government attention.”

The Microsoft founder stated that currently, it appears as though “we’re in uncharted territory here,” as rules regarding Big Tech and emerging technology giants seem to be changing. Future regulation appears to be looming close and seems to be an inevitability, according to Gates.

Whether or not regulation would drive down technological innovation was also addressed by Gates. Many tech moguls have considered that as a concern, as anti-competitive killer acquisition clauses are currently being assessed by the House subcommittee.

How blockchain can benefit from the antitrust hearing

Apple, Amazon, Facebook, and Google have been facing heat by the US Congress in ongoing antitrust talks, as the US Judiciary Committee would like to see regulatory policies established for the Big Tech.

Topics that were discussed ranged from data privacy breaches to investigations pertaining to the companies’ treatment of their competitors. The Big Tech have been accused of strong-arming tech rival companies and driving down competition by leveraging their dominance in the sector.

With the US Judiciary Committee actively working on imposing rules for Big Tech, the blockchain sector may stand to benefit. The concentration of power on distributed ledger technology is technologically impossible, as all transactions are recorded on the block and can be accessed by at any time, removing the need for a third-party entity.

Despite Clear Divide Amongst Lawmakers, Crypto CEOs Request Clear Regulations

Top executives representing the biggest companies in the American digital currency ecosystem appeared before Congress to testify on the state of the crypto industry.

While CEOs met with a divided House who seemed unable to agree on the approach to employ in regulating the nascent industry, demands for clear regulations were vocally spelt out.

“We need clear standards and the government’s support to create a new, more secure, more competitive financial system,” said Charles Cascarilla, CEO and co-founder of Paxos Trust Co., which provides financial services to crypto firms. “The benefits of getting this right are enormous — but so are the consequences of getting it wrong.”

SEC Chairman Gary Gensler, who seeks to regulate cryptocurrencies as securities, was notably faulted by Coinbase Chief Financial Officer Alesia Haas. The Coinbase executive advocated for a digital currency regulated future where clear definitions would be given by a governing agency other than the SEC. According to her, “it would benefit all of us in the ecosystem to have agreed-upon definitions.”

“We do believe clarity is needed,” Haas said.

Republicans were mostly on the side of the crypto executives as they expressed trust in the potentials of the technology backing the industry. While they were unable to promise an encompassing regulation as the executive was suing for, their approach seemed more favourable than Democrats’, who chose to maintain the stance that the crypto ecosystem has significant lapses that cannot be shoved aside.

“The advocates of crypto represent the powers in our society,” said Rep. Brad Sherman (D-Calif.), the industry’s most outspoken critic in Congress. “The powers in our society on Wall Street and in Washington have spent millions, and are trying to make billions or trillions in the crypto world.”

With Bank Policy Institute President and CEO Greg Baer standing in for the nation’s biggest banks at the hearing, he advocated for an equal level of regulations for financial institutions and digital currency service providers, all of whom seem to be operating on a more different rulebook, stumping competition.

SEC Commissioner Elad Roisman Sets to Leave the Agency in next January

Elad Roisman, one of the Commissioners with the United States Securities and Exchange Commission (SEC), has tendered his resignation with President Joe Biden in preparation for his quit from the agency by the end of January 2022.

Roisman currently serves as one of the five commissioners alongside Hester Peirce, well-known as Crypto Mom.

“Today, I sent a letter to President Biden, informing him that I intend to resign my position by the end of January. Serving the American people as a Commissioner and an Acting Chairman of this agency has been the greatest privilege of my professional life,” Roisman said in a statement published by the commission, “It has been the utmost honour to work alongside my extraordinary SEC colleagues. The latter care deeply about investors and our markets. Over the next several weeks, I remain committed to working with my fellow Commissioners and the SEC’s incredible staff to further our mission of protecting investors, maintaining fair, orderly, and efficient markets, and facilitating capital formation.”

Roisman was appointed as a Commissioner in 2018 by former President Donald Trump, and he led a successful career with the SEC. Roisman served briefly as the Acting Chairman of the commission when former Chairman Jay Clayton resigned in December 2020. During his service time with the SEC, Roisman supported the push for progressive crypto regulations.

During his time as the Chief Counsel of the U.S. Senate Banking Committee, Roisman pointed out that the SEC should “examine and re-examine its rules, regulations, and guidelines” when it came to emerging technologies, including crypto and blockchain. He was also a part of the U.S. House Committee Hearing with the SEC on Crypto and Libra back in 2019.

A few days ago, Roisman co-signed a letter alongside crypto mom, criticizing Chairman Gary Gensler’s approach for not clarifying crypto in the agency’s regulatory agenda. Roisman’s current tenure as SEC commissioner is expected to end in 2023. His departure will create a temporary vacuum that stakeholders in the crypto ecosystem can hope will be filled by another crypto-centric veteran.

Image source: Bloomberg.com

SEC to Give "Careful Consideration" to Concern about Spot BTC ETFs: Gensler

In a letter sent to members of Congress, Gary Gensler, Chairman of the United States Securities and Exchange Commission (SEC), promised to give “careful consideration” about spot Bitcoin Exchange Traded Products (ETPs).

Recalled that two Congressmen, Tom Emmer (MN-06) and Darren Soto (FL-09), sent a letter to Gensler back in November last year requesting to know the reason for the commission’s caution towards a spot BTC ETF product when indeed, it has approved a related product based on the futures price of the premier cryptocurrency.

“We question why, if you are comfortable allowing trading in an ETF based on derivatives contracts, you are not equally or more comfortable allowing trading to commence in ETFs based on spot Bitcoin,” the letter read at the time following the approval of ProShares futures-based Bitcoin ETF product. “Bitcoin spot ETFs are based directly on the asset, which inherently provides more protection for investors.”

In response to the inquisition, Gensler said the proposals for both a futures-based and a spot ETF are considered separately based on the provisions of the Exchange Act. While Gensler said, the commission would continue to probe whether the proposals for a spot Bitcoin ETF product are capable of preventing fraud and manipulative practices.

The fears of the SEC are compartmentalised mainly to the U.S., and other countries, including Canada, Brazil, and Germany, have fully functional spot Bitcoin ETF products trading on their public bourses. In a bid to prevent the United States from lagging behind in emerging financial innovations, Rep Emmer tweeted saying;

“This issue remains a priority for us and we will continue to oversee the SEC in its mission to maintain fair and orderly markets and facilitate capital formation.”

While the SEC Chairman reassured that the commission would continue to consider new proposals to list a spot BTC ETF, the ecosystem is hardly optimistic about the chances of anyone emerging soon.

US Lawmaker Mike Collins' $65K Ethereum Investments: Navigating Ethics and Market Dynamics

US Georgia Representative Mike Collins disclosed investments totaling up to $65,000 in Ethereum (ETH) in early 2024. This disclosure, filed on January 9 with the House’s Financial Disclosure Reports Database, includes purchases of $15,000 on January 3 and $50,000 on January 8, adding to his total ETH investments of approximately $110,000 since 2023.

Collins’ engagement with Ethereum, a leading cryptocurrency, aligns with his ongoing investments in digital assets. The STOCK Act, a regulatory framework designed to prevent conflicts of interest, mandates such disclosures by US lawmakers. However, it does not prohibit them from overseeing legislation potentially related to their investments, which has been a point of contention and debate regarding the intersection of personal wealth and public service responsibilities.

The timing of Collins’ investments coincides with a notable surge in Ethereum’s price, which experienced an 11% increase in early January 2024. This market behavior is partly attributed to anticipations surrounding the SEC’s potential approval of a spot Bitcoin ETF, a development that could have broader implications for the cryptocurrency market.

These financial activities occur against a backdrop of significant political events, including the looming possibility of a US government shutdown and the commencement of the 2024 presidential campaign. The intersection of these political dynamics with market movements underscores the complex relationship between governmental actions and financial markets, particularly in the realm of cryptocurrencies.

This development also highlights the broader trend of lawmakers engaging in cryptocurrency investments, reflecting the growing integration of digital assets into mainstream financial practices. However, it raises questions about the need for more stringent regulatory frameworks to ensure transparency and prevent potential conflicts of interest. The ongoing debates in this arena suggest a growing recognition of the unique challenges posed by the intersection of digital assets and political governance.

Rep. French Hill Eyes Financial Services Committee Leadership Amid Crypto Focus

Arkansas Representative French Hill is positioning himself to take the helm of the House Financial Services Committee, a move that could significantly impact the oversight and regulation of digital assets in the United States. As the current chair of the recently established digital assets subcommittee and vice-chair of the full committee, Hill has been at the forefront of exploring and understanding the intricacies of cryptocurrency and blockchain technology.

The financial services committee plays a critical role in shaping policies that govern the nation’s financial institutions, including banks, lenders, and credit markets. With the explosive growth of the cryptocurrency market and the increasing interest in blockchain applications, the committee’s approach to these new technologies will likely affect how they are integrated into the broader financial system.

Hill’s leadership could mark a pivotal shift for the committee, which has conducted multiple hearings on crypto-related issues under his guidance. Notably, these hearings have delved into topics such as the potential for digital currencies to enhance financial services, the risks and benefits of emerging technologies, and the need for a comprehensive regulatory framework to ensure consumer protection and market integrity.

The departure of Representative Patrick McHenry, who has also shown interest in fintech innovation, leaves a vacuum that Hill is well-positioned to fill. Hill’s experience with digital assets could lead to a more nuanced and informed dialogue within the committee, potentially fostering a regulatory environment that encourages innovation while addressing the risks associated with digital currencies.

Hill’s potential leadership raises several questions about the future direction of cryptocurrency regulation. Will there be a push for more stringent oversight to protect investors from the volatility and potential fraud in the crypto space? Or will the committee lean towards a more laissez-faire approach to promote innovation and competitiveness in the global financial markets?

The implications of Hill’s ascension extend beyond the borders of the United States, as the country’s regulatory stance influences international norms and practices. As cryptocurrencies and blockchain technology become increasingly global, the decisions made by the House Financial Services Committee under Hill’s leadership could have far-reaching consequences for the industry worldwide.

As the situation unfolds, all eyes will be on Hill and the financial services committee to see how they will navigate the complex and evolving landscape of digital assets. With the potential for groundbreaking legislation and regulatory frameworks on the horizon, the committee’s actions will undoubtedly shape the future of finance in the digital age.