The United States (‘US’) legislature has introduced To direct the Secretary of Commerce, in consultation with the Federal Trade Commission, to conduct a study and submit to Congress a report on the state of the blockchain technology and use in consumer protection, and for other purposes (‘the bill’) on September 1, 2020 during the 116th (one hundred and sixteenth) Congress. The bill has been referred to the US House Committee on Energy and Commerce. Currently, as of September 7, 2020, the text for the bill has not been provided.
Previously, the US Congress has also deliberated upon creating a legislative framework for blockchain technology. On December 17, 2019, the Blockchain Promotion Act of 2019 (‘Blockchain Act’) was referred to the Committee on Commerce, Science, and Transportation (‘CCST’). The CCST had also submitted a report to accompany the Blockchain Act (‘the report’), during the 1st (first) session of the 116th ( one hundred and sixteenth) Congress, for establishing the purpose of the Blockchain Act and providing for a need to establish an interagency working group to recommend to Congress a definition to blockchain technology. The report also highlighted the budget requirements for setting up such a committee.
The Blockchain Act
The Blockchain Act directs the CCST to establish a working group to implement a definition of blockchain technology and identify its application. The Secretary of Commerce (‘SoC’) shall establish such a blockchain working group not later than 90 (ninety) days from the enactment of the Blockchain Act. The SoC shall direct Federal agencies to be a part of the blockchain working group, and the SoC shall establish a fair representation of a cross-section of Federal agencies that could benefit from blockchain technology. In this regard, the SoC shall also ensure appointments from nongovernmental stakeholders as per Section 2(b)(i). Representation shall also be ensured from stakeholders such as manufacturers, suppliers, service providers, and vendors from the information and communications industry, the technology and industrial sector, small and medium-sized enterprises. Moreover, individuals and organisations involved in academic research in blockchain technology may also be a part of the blockchain working group.
Further, the blockchain working group shall submit their report, not later than 1 (one) year after enactment of the Blockchain Act (‘working group report’). Such a working group report shall consist of recommendations on the potential application of blockchain technology, including any non-financial applications and shall also highlight opportunities for Federal agencies to use blockchain technology. The blockchain working group may also consider the recommendations contained in the National Institute of Standards and Technology Internal Report 8202, titled ‘Blockchain Technology Overview’ published in October 2018.
BlockSuits Comments
The legislative actions taken in the furtherance of blockchain technology shall enhance its applications which will in turn increase investor sentiment. In the Indian context, a proper legislative overview and consideration are yet to be established. While the Government of India (‘GoI’) has proposed the use of blockchain in privacy laws such as the Report on Non-Personal Data Governance Framework, there is a need for India to keep up with the global advancement in the field of blockchain technology. Moreover, NITI Ayog, a GoI policy think tank, had published the Blockchain: India Strategy, however, no action has been taken in furtherance of the same. Indian regulators shall also look beyond the financial aspect of a blockchain, to introduce it into various sectors such as the judiciary. In this regard, precedent can be taken from the Thailand courts, where recently, the Office of the Court of Justice, proclaimed that they are working on creating a blockchain network for the purpose of documentation.
Authored by Samaksh Khanna, Co-founder, and Shivani Agarwal, Founder.
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