Many financially developed countries are with unreserved support towards the blockchain technology, the distributed networking system, started with birthing Bitcoin back in 2009. The elimination of middlemen is a major selling point of the technology at bank and other financial institutions. It may sharply reduce transaction costs with virtually instantaneous payments. Anonymity of transaction and probable misuse for drug trafficking and financing of terrorism causes many countries like European Union to not allow at all or sharply restrict its use by tightening regulations.
There are more than 100 types of digital currency (cryptocurrency) available in market today. These are not issued, endorsed or regulated by any central bank of any country. It functions outside the purview of central banks, which seek to direct economies by increasing or decreasing the amount of currency in circulation. Most of these tokens (currencies) are created though a computer-generated process known as mining which involves Proof of Work (POW) protocol over a distributed network. The digital currency such as Bitcoin, Ether, Monero etc. do not exist in any physical form so, they must be exchanged online. Users have greater ability now to purchase goods and services with digital currency directly at online retailers. The currency is also being traded on exchanges, and many companies have even made investments in virtual currency-related ventures.
The United States of America
The United States has always been supportive to modern technology. But it wasn't so easy for the Blockchain Technology. The digital currency (Bitcoin) has made its way to be accepted as payment mode for a handful organization like, Dish TV Network, Dell and Overstock.com in USA.
Meanwhile, The U.S. Department of Treasury’s Financial Crime Enforcement Network (FinCEN) has been issuing guidance on Bitcoin since the beginning of 2013. The Treasury has defined bitcoin not as currency, but as a money services business (MSB). Bitcoin is categorized as property than as a currency for taxation purposes by the Internal Revenue Service (IRS). The Securities and Exchange Commission (SEC) has also rejected an Exchange-Traded Fund (ETF) request of Bitcoin proposed by Cameron and Tyler Winklevoss on Friday March 10, 2017. However, this decision gave an opportunity to another digital currency (ETH) to grow.
Few states of The United States of America have already started working on necessary bills for accepting blockchain and digital currency. The bill covers increase transparency in State operations, protect consumers from added taxation etc., while some bills also describe the technology as “immutable” and providing “uncensored truth.”
Delaware (Blockchain for state's corporate law)
The state of Delaware is perhaps the friendliest jurisdictions for Bitcoin and blockchain technology in the U.S. The Governor Jack Markell unveiled the plan during a keynote address at Consensus 2016, a technology conference in New York focused on blockchain innovation.
"Delaware has long been the jurisdiction of choice for the most innovative companies in the world. The Delaware Blockchain Initiative demonstrates the state's commitment to ensuring this remains the case for the growing blockchain technology sector.”- Gov. Jack Markell
Cooley's lawyers were named the state of Delaware's Legal Ambassadors to the Blockchain Industry, and have been among the architects of the Delaware Blockchain Initiative since its inception. The Delaware General Assembly will soon consider amending the state's corporate law so companies can use blockchain technology to better track stock owners. The blockchain could be used for notice-of-lien filings, share issuances and other official actions in future.
Delaware is home to more than 1 million corporate entities, including 64 percent of Fortune 500 companies. According to an Irish consumer data tracker, corporations and venture capitalists invested more than $1 billion in blockchain startups (in 2016), a market that is expected to hit $19.9 billion by 2025. Blockchain technology may eventually make Wall Street more efficient with instantaneous trade settlement and more efficient record keeping. The State of Delaware officials say, “It will put Delaware at the forefront of the blockchain revolution, encouraging developers of the technology to build and expand their businesses in the First State.”
“Delaware is such an important state. It is the state where the foundational infrastructure of finance in the United States happens. This technology really is a game changer to massively simplify and streamline what’s going on in the financial sector. There’s no reason why we can’t settle securities transactions instantaneously. And this is the technology that I think will get us there.” said Caitlin Long, president of blockchain startup Symbiont, the state’s partner in the program hosted by the Mack Institute for Innovation Management and the Penn Wharton Public Policy Initiative.
Vermont (Blockchain for court of law)
A Blockchain Technology related bill has passed in both the Vermont House and Senate on March 31, 2017. Sec. I.1. 12 V.S.A. § 1913 “Blockchain Enabling” of the Senate Bill 135, includes Blockchain Technology. It states that 'fact or record' digitally recorded in the blockchain, shall be admissible to Vermont Rule of Evidence 902 / 803(6) with few presumptions mentioned in the proposed bill. This proposal is waiting for Governor’s signature to become law officially. In simpler terms, if this bill is passed, it will authorize blockchain verified documents including facts as legal bearing in a court of law.
Arizona (Blockchain for public usage)
Arizona Governor Doug Ducey signed H.B. 2417 on March 29, 2017. Chapter 97, Article 5 - 'Blockchain Technology' states that this bill recognizes blockchain signatures and smart contracts under state law. The amendment states “a signature that is secured through blockchain technology is considered to be in an electronic form and to be an electronic signature.” It also discusses the legality and enforceability of a smart contract, defined by the bill as an “event-driven program, with state, that runs on a distributed, decentralized, shared and replicated ledger. In other words, the legislation defines both blockchains and smart contracts. It declares that all data tied to a blockchain is "considered to be in an electronic format and to be an electronic record," which is acceptable for use by the state. Previous Arizona blockchain-related legislation HB 2216 has not passed yet, and has very little opposition. The legislation states that, it is a felony to subject citizens to having their guns tracked on a blockchain.
Maine (Blockchain in election)
Senate Bill 950 was introduced by Senator Eric Brakey on March 9, 2017. It was a proposal to instigate a 90-day field study to learn the effects of, “Using Blockchain Technology in Conjunction with Paper Ballots in Maine Elections.” According to the text of the proposal, the commission should explore blockchain to see if it could "support and enhance Maine's current paper ballot election system for the purpose of improving paper ballot security, increasing election transparency and reducing costs". The House and Senate have both forwarded the bill, so it does not need to be voted on to be passed. If passed, the measure would have led to the development of a report on the subject, to be delivered by December 7, 2017. Yet, the public record shows that the legislative proposal to study the use of blockchain technology for elections in Maine has failed on April 13, 2017 .
Nevada (Blockchain for residents)
Senator Ben Kieckhefer introduced Bill 398 in the Nevada senate. The bill establishes various provisions relating to the use of blockchain technology. Bill 398 of Nevada’s Senate defines, recognizes and authorizes blockchain technology, smart contracts and its usage by Nevada residents. The main proposal of the bill is that a local government entity should not be able to
impose taxes or fees on the use of a blockchain contract by a person or business
require any person or business to obtain a certificate, license or permit to utilize a blockchain contract
impose any other requirement with regards to the use of blockchain contracts.
The bill also sets out to make blockchain permissible to use in legal proceedings. The bill text states that “if the law requires a record to be in writing, submission of a blockchain which electronically contains the record satisfies the law.” The bill was referred to 'Committee on Judiciary' on March 20, 2017; any further action on it is yet to be taken.
State of Hawaii (Blockchain for economic development)
House Bill 1481 relating To Economic Development was introduced on January 25, 2017 at House of Representatives, State of Hawaii. This bill focuses on ways in which digital currency and blockchain technology can help the State develop economically across multiple industries like Health care, Legal, Financial Services, Manufacturing, Tourism and, Identity and access management. According to the text of the bill, “The legislature recognizes the vast potential for this technology to drastically change and improve public sector operations and private industry capabilities. Blockchain technology is poised to change multiple industries”. The purpose of this Act is to establish a working group consisting of representation from the public and private sectors to examine, educate, and promote best practices for enabling blockchain technology to benefit local industries, residents, and the State of Hawaii. While awaiting a vote by both branches, the bill has passed several committees. As per the public record, report was adopted on March 24,2017 and has been referred to Senate Ways and Means Committee (WAM).
Illinois (Blockchain for recordkeeping and service delivery)
House Resolution 120 was introduced on February 8, 2017. IL HR0120 also known as the “Blockchain Task Force Resolution,” was simultaneously created in both the House and Senate as a joint resolution calling for a deep investigation into the technology. Synopsis as introduced says, the bill will “Create the Illinois Legislative Blockchain and Distributed Ledger Task Force, to study how and if the State of Illinois, county governments, and municipal governments can benefit from a transition to a blockchain based system for recordkeeping and service delivery.”
The text of the bill states that, “The State of Illinois, through the recently created Illinois Blockchain Initiative, has promoted a collaborative regulatory exchange with technology firms, software developers, and service providers, so that if regulation is needed, it will be the product of a collaborative and proactive approach, with the goal of encouraging economic development through innovation; therefore, be it.” The legislation has passed a House vote and as per public report on March 9, 2017, it is with Executive committee.
North Dakota (Blockchain’s feasibility study)
Senate Bill 2100 with title “A BILL for an Act to provide for a legislative management study of virtual currency” was introduced by Industry, Business and Labour Committee at the request of Dept. of Financial Institutions in December 2016. The texts of the bill said that “During the 2017-18 interim, the legislative management shall consider studying the feasibility and desirability of regulating virtual currency, such as bitcoin. The legislative management shall report its findings and recommendations, together with any legislation required to implement the recommendations, to the sixty-sixth legislative assembly.” It passed unanimously in Senate on January 12, 2017 but was declared failed on March 1, 2017 at the House with a majority voting against it.
California (Blockchain in charitable raffle)
A bill from California, Senate Bill 741, was proposed on February 17 2017 by Tony Mendoza at California State Assemblyman . Summary states as “An act to add Section 320.7 to the Penal Code, relating to gaming, and declaring the urgency thereof, to take effect immediately.” It authorizes organizations to hold charitable raffles but not with digital currency. According to the text, “A raffle ticket shall not be sold in exchange for Bitcoin or any other cryptocurrency”. Bitcoin or any other cryptocurrency will be specifically outlawed by a State congress from being used in a specific way for the first time. There is no final word on the proposal yet, it is pending with Senate Governmental Organization Committee.
On federal level, no bill related to the blockchain technology or digital currency has been submitted yet. Though, there was a non-binding Resolution 835, proposed by US House of Representatives in September, 2016, promoting economic growth nationally.
However, US Congress has shown its engagement with Blockchain on February 9, 2017, by announcing launch of the 'Congressional Blockchain Caucus' in a press release dedicated to the advancement of sound public policy based towards blockchain technologies and digital currencies by Rep. Jared Polis (D-Colo.) and David Schweikert (R-Ariz.); co-chairs of the bipartisan caucus. The Congressional Blockchain Caucus will seek to educate, engage, and provide research to help policymakers implement smart regulatory approaches to the issues raised by blockchain-based technologies and networks.
“Open blockchain networks and distributed ledger technologies are still new, but it’s critical for members of Congress to begin comprehending both their current applications and future use cases.” Rep. Schweikert said. “It is critically important the United States remain competitive regarding emerging technologies, and distributed ledger technology is the open, secure, efficient technology backbone we've been looking for.”
The Department of Health and Human Services' (HHS), Office of the National Coordinator for Health Information Technology (ONC) also sponsored First Federal sponsored “Code-A-Thon” for Blockchain in Healthcare in DC Blockchain Summit 2017 , held on March 15-16, 2017.
Digital currency offers anonymity and a convenient way to conduct cross-border transactions with no exchange rate fees. In absence of any uniform international legal law covering the use these technically well-established virtual currency system; its usage in a country must be facilitated or restricted by respective central and state government.
Few countries like Singapore, South Africa, Australia, India, Hong Kong are stepping towards the blockchain technology while few others like EU, Russia prefer wait-to-see approach. China and Japan are already ahead like world leaders to allow digital currency in trading. However, from what we see today, it’s not very clear that any digital currency will ever be accepted as legal tender of a country.
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