GAO released a study on the benefits of blockchain technology to provide Congress with an overview of what, how, where, and why blockchains are needed within today’s economy. The report discusses the non-financial, financial, and policy options that enhance solutions as well as mitigate certain challenges that blockchain technology aims to solve.
Possible applications of blockchain technology that the report includes are:
The report also claims that blockchain technology will help improve centralized systems that may be better suited to be distributed or decentralized.
Along with a blockchain’s advantages to help organize systems more thoroughly, provide financial inclusion, save on costs, faster record keeping, less risk of network downtime, the report also brings up the challenges that blockchain implementations face.
Blockchain challenges include:
The GAO recommends in their report that policymakers may refer to four points of adherence that will make decision making as smooth as possible.
This will allow policymakers to collaborate and compromise on standards for the implementation of blockchain technology. The goal for setting standards would be to simplify the process for decision making. Standards may vary by industry and sector.
Policymakers will need to identify existing regulations and offer mechanisms or new regulations to benefit all participating parties. This will be industry-specific within the U.S. and will provide parameters for blockchain firms to conduct business with U.S. citizens.
Policymakers have the option to produce educational materials for internal and external use. These materials will help regulators and all parties involved better understand how blockchain technology works and how it can be implemented.
Determining the best use cases for blockchain will involve having workshops as well as methods for testing potential ideas brought on by Congress. Extensive research will take place before any use cases are tested.
The flowchart below provides the basic parameters for what will be considered by policymakers to be an efficient use of blockchain technology.
The report is a beginning framework for policymakers to determine the best course of action for designing regulations around blockchain. All policymakers are not bound to follow what is suggested in the report and may make modifications in the future.