US Officials Praise Blockchain Amid ICO Concerns

That was, probably, the message broadcasted by the U.S. government representatives to audience members at the panels, on the first day at the DC Blockchain Summit in Washington, DC on Wednesday. The message came even as regulators of security gave warning to exchanges that permitted trading of ICO tokens.

The Commerce Department's International Trade Administration, deputy assistant secretary of services, James Sullivan during his address, remarked that, “"we cannot make policies in the abstract" and that is so, in regard to the potential utilization of blockchain in the business community, whereby private and public sector cooperation is key.

“I would recommend everyone in this audience to reach out and hear your opinions.” Sullivan added. In fact, Sullivan expressed giving support to blockchain in the trade finance chain, especially for smaller firms that have fewer resources. “The organizations that are often hit hardest by trade finance gap are small & medium-sized businesses.” Sullivan said. “We tend to think; this is where the blockchain comes in.”

However, the attendees who addressed CoinDesk proved not to be sure on the query of blockchain utilization in government in addition to the issue of cryptocurrency regulation, which at the event was also top-of-mind. One worker of the major blockchain startup portrayed skepticism that the USA government would dedicate to using the tech, claiming that agencies will be better served even by looking at the merits of tokenization.

Other officers at the event had the view that, if blockchain gets its way into the public sector, then it may come as a broad technology suit. The Office of Personnel Management (OPM), chief data architect, Marcel Jemio spoke alongside Mark Fisk, the IBM Public Service Blockchain partner indicating that blockchain might be applied to collective government workers’ data in a more efficient and accessible manner.

Fisk stated, “I think the use of blockchain will solve various problems, but not necessarily those related to the technology since everyone is talking about it.” As expected, the regulation topic was a key one, both off and on the stage. Earlier, during the day, publicly, the U.S. Securities and Exchange Commission had warned about ‘potential unauthorized online platforms for trading cryptocurrency’. The commission argued that exchanges that provide ICO-derived tokens services might be needed to register with the agency.

The issue of crypto regulation came as the co-founder of Bitmain, Jihan Wu exposed that the giant in bitcoin mining hardware was seeking to establish "private central banks" that utilize cryptocurrency. In Wu's opinion regarding the current market, most tokens will finally come under the scrutiny of securities under conventional definitions.

Wu added that most tokens will probably fall into the security definition and will be subjected to regulation. However, he argued that regulators need to prepare well on how to handle business innovations. Some event’s attendees told CoinDesk that regulation as welcome, especially about ICOs, while others pointed out that establishing regulation now would “bolt” businesses into ill-suited rigid models for a quick-moving environment.

Likewise, attendees experienced concern of the inconsistent crypto treatment by the U.S. government, because IRS views bitcoin as property while CFTC sees it as a commodity. The latter has even been reinforced by the verdict of the court earlier this week. However, the two crypto services firm participants added that the discord between various bodies – IRS, CFTC, and SEC might ultimately benefit the digital currency industry, due to lack of agreement between them and even as they continue with consultations.

Also, the event saw the CFTC commissioner, Brian Quintenz strongly advocating for more self-regulation in the crypto space. While addressing the audience, Quintenz added that cryptocurrency platforms need to “step up” and conduct self-regulation even as the government deliberates – an opinion he likewise expressed in the past. “I believe the private digital currency oversight body can close the gap between the future government regulatory actions and the status quo”, argued Quintenz as he insisted that such a group might end up having a world influence.