Emmer aims to get out front on blockchain technology legislation

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Technological innovation moves fast. Today’s hot new gadget is tomorrow’s candidate for recycling.

It’s tough to keep up with 4K, 5G, AI and VR. No place is that struggle more obvious than in government.

Legislation and regulation moves slowly as the gears of government creak. Meanwhile, technology and the marketplace determine what “rules” govern how the latest inventions operate.

Two recent examples highlight the challenge.

When Congress conducted hearings on how social media influenced the 2016 elections, it was painfully, embarrassingly obvious that members, the aged ones as well as younger members, were totally clueless. They haltingly read questions obviously prepared by more knowledgeable staffers while tech-genius witnesses could barely hide their giggles.

And then there are drones. They’ve been zipping through the skies for years while the FAA and lawmakers try to figure out how to regulate their impact privacy and safety.

Rep. Tom Emmer, our Republican member of Congress from the Sixth District, isn’t going to let that happen as the government deals with digital currency.

Emmer, who was just named a co-chair of the Congressional Blockchain Caucus, announced three bills to support blockchain technology and digital currencies.

Specifically, the legislation expresses “support for the industry and development of these promising technologies in the United States, provides clarity to entities that never take control of consumer funds and establishes a safe harbor for taxpayers with ‘forked’ digital assets.”

“The United States should prioritize accelerating the development of blockchain technology and create an environment that enables the American private sector to lead on innovation and further growth, which is why I am introducing these bills,” Emmer said.

The Caucus believes in a hands-off regulatory approach to allow this technology to evolve the same way the internet did – on its own. The federal government should provide a light touch, and a consistent and simple legal environment, they contend.

Blockchain technology is a digital, decentralized ledger that keeps a record of transactions and allows for the transfer of financial assets directly between users.

The technology enables the existence of cryptocurrency. Bitcoin is the name of the best-known cryptocurrency, the one for which blockchain technology was invented. A cryptocurrency is a medium of exchange, such as the U.S. dollar, but is digital and uses encryption techniques to control the creation of monetary units and to verify the transfer of funds.

Emmer’s bill specifically points to the use of blockchain along with smartphones to provide banking and financial services to people who are currently underserved by the financial industry.

Emmer’s bill also recognizes future uses that go beyond value transfer including “identity, security for the Internet of Things, rights management for digital content, efficiencies in insurance, energy, health care and instant execution, monitoring and enforcement of contractual terms.”

The bill lays out the role of government, balancing the need to encourage private-sector development and innovation while also protecting users from illicit use of digital currencies and other blockchain services.

Financial institutions are exploring how they could also use blockchain technology to upend everything from clearing and settlement to insurance.

As a member of the House Financial Services Committee, Emmer has a stake how banking, insurance and international finance are regulated. I’m often critical of Emmer’s policy positions, but this time, he’s on the right track. Blockchain technology is probably not high on most voters’ lists of key issues so Emmer deserves credit for taking the time to dig into it.

Becoming an expert and leader on the emerging and fast-developing blockchain technology may save him and his fellow lawmakers from embarrassing moments at future Congressional hearings.

Author: Mike Knaak

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