United States - regulatory attempts for crypto, opening to the blockchain

Federal authorities in the United States have difficulties in determining what is the best crypto regulation approach. However, most instants have embraced blockchain technology without much hesitation.

Increased adoption and investor interest in crypto puts pressure on federal institutions to adopt clearer rules. Even if there is the possibility of adopting legislation at state level, most experts agree that a unified and nuanced approach is needed.

In an article published in the Journal of Financial Transformation, University Professor Carol Goforth of Arkansas University summed up the situation. She pointed out that there are at least four distinct federal regulators supervising various aspects of crypto and each has a different interpretation of their nature.

The Commodity Futures Trading Commission (CFTC) treats cripto as commodities / commodities, the Securities and Exchange Commission (SEC) insists that they are Treasury's Financial Crimes Enforcement Network (FINCEN) rules for foreign currencies, and Internal Revenue Service (IRS) treats them as properties.

In his analysis, Prof. Goforth calls for increased coordination between agencies in an effort to introduce a more nuanced approach. However, she is skeptical about the possibility that these approaches will soon be strengthened. The proposed solution is to treat such goods on a case-by-case basis, according to their functionality and according to the user's motivation.

CFTC is expanding its research into Crypto

Recently, the CFTC has issued a public request for information, seeking in-depth comments on several aspects of how the Ethereum network and related crypto work. The document aims to generate feedback to feed the work of LabCFTC. Details are requested about 25 elements relevant to the purpose, functionality, scalability and network security. Also, details of the planned transition from the Proof-of-Work mechanism to Proof-of-Stake are desired.

It remains to be seen what the results of this initiative will be. Some believe that the regulator is preparing for a crypto industry's abstinence. Others, such as MIT Technology analyst Mike Orcutt, feel that this interest will jeopardize the launch of ETH futures.

Other US regulators have not made similar moves, which means maintaining a general and non-specific approach. For example, recent remarks by an official of the Treasury Department have highlighted the need for cripto market actors to strengthen their anti-money laundering infrastructure and counter terrorist financing.

US Congress

There is always hope that the Capitol Hill legislators will lead the way to a better regulatory framework. In recent weeks, members of Congress have made waves in the press by announcing various blueprint laws on the cripto industry.

On December 6, Congressmen Darren Soto and Ted Budd presented two draft laws aimed at preventing the manipulation of crypto prices and optimizing the regulatory framework. These are the Law on the Protection of Virtual Monetary Consumers and the Internal Market Act and the Regulation of Competitiveness.

Both projects include recommendations to the CFTC which provide for a set of regulatory changes. The first bill describes the possible scenarios of price manipulation in the crypto markets and advances remedies. The second calls for a comparative study of regulatory arrangements in other national contexts to improve current domestic regulations that can inhibit innovation.

Congressman Warren Davidson of Ohio has been at the center of attention at least twice in December. He spoke at the Blockland Solutions conference in Cleveland, where he announced he was planning to introduce a bipartisan bill that would create a new class of token assets. This initiative would allow federal authorities to better regulate initial money supply (ICO).

Later, during an NPR interview, Davidson advertised to ICOs, claiming that the US-Mexican border wall could be funded in this way.

The American Executive

It is clear that regulators and financial legislators need time to identify ways to better manage crypto industry. As for blockchain, however, the attitude is much more open. Many federal agencies that are not interested in monetary issues exploit the uses of technology to help their daily operations.

This is for supply chain logistics, which can have major benefits from the application of DLT.

Recently, the United States faced an E. Coli outbreak, caused by a Roman salad from a California farm. The US Food and Drug Administration (FDA) has had to introduce a general warning and withdraw the product from the market.

Recently, the FDA has taken steps to improve its tracking tools and facilitate the implementation of food safety. The agency hired Frank Yiannas, former head of food security at Walmart, as deputy commissioner for food and veterinary medicine.

Only a few months ago

Yiannas oversaw the first attempts of Walmart's block-based tracking system. It is expected that in the coming months will introduce a similar solution to the FDA.

The Department of Homeland Security (DHS) is interested in two ways to implement the relevant blockchain for its activities. One is related to forensic analysis of transactions, especially when it comes to private crypto. DHS has been worried about the potential of Monero and Zcash to help criminals get rid of the same level of control already available for Bitcoin transactions. For this reason, the institution has called for solutions capable of coping with such "newer developments of blockkahin technology".

Another matter of interest

Refers to the licensing and certification functions of its three subsidiaries: US Customs and Border Protection (CBP), USCIS, and Transport Security Administration (TSA). In an effort to improve document flow, DHS has called for blockchain-based solutions that will help combat fraud, counterfeiting and falsification of digital documents.

In the field of defense, the US Air Force Technology Institute (AFIT) has unveiled an application designed to instruct members of the armed forces to develop and execute blockchain-based supply chain solutions. For this, the Air Forces have entered into partnerships with several private contractors to build a staff training system for their new functionality.

Meanwhile, the US Army's research arm, Defense Advanced Research Agency (DARPA) is trying to explore the potential uses of distributed registers technology. DARPA will organize a workshop on this topic in February 2019. In preparation for the event, the Agency requested information on a number of blockchain issues, including the security and centralization of distributed consensus protocols.