Cryptocurrencies and government agencies have been butting heads quite often lately. One could say that they’ve never exactly been at ease with one another. As crypto markets become more prevalent, they threaten the traditional economic models that maintain the status quo. Likewise, when governments threaten regulatory action, markets crypto markets panic.
Since the beginning of last year, when crypto markets really began accelerating, Congress has been forced to both observe and address the new fintech phenomenon… Often, with confusing results.
However, you wouldn’t know that from the 2018 Joint Economic Report released by Congress this week.
The annual bipartisan report is lawfully comprised of Democratic and Republican members of the House of Representatives and the Senate. The expansive publication exceeds three hundred pages and covers a range of topics related to the U.S. economy, and, for the first time, it includes information on cryptocurrencies, blockchain technology, and ICOs.
A Surprisingly Positive Message
The report dubs 2017 “The Year of Cryptocurrencies,” and it provides nearly twenty pages of content on the crypto space. Much of the section can be considered academic. It defines cryptocurrencies, ICOs, and blockchain technology, and it demonstrates their prodigious growth since January 2017. As one graph concludes,
“Cryptocurrencies made the stock market gains look insignificant.”
In some ways, the document’s conclusions are surprising because of all the negative government attention that digital currencies received this year. For example, the SEC, a federally funded government agency, recently issued subpoenas on a select group of ICOs, and the agency maintains a skeptical position the digital currencies.
Interestingly, when discussing cryptocurrency’s viability as a digital currency, the report concludes,
“Cryptocurrencies resemble real assets or commodities more than currencies, though their future role could expand to include functioning as mediums as exchange.”
Two prominent issues in healthcare infrastructure are specifically singled out as an industry that can benefit from blockchain technology.
Healthcare is a dominant political topic since President Barack Obama signed the Affordable Care Act into law in 2010. That debate only intensified with the election of Donald Trump, and the report points to the blockchain as a tangible way to improve everything electronic medical records to prescription drug regulation.
In a timely conclusion, the report notes that the blockchain can significantly improve security and reliability of the nation’s infrastructure grids.
Just this week, news broke that Russian hackers infiltrated the U.S. electrical grid and other essential systems. The Joint Economic report indicates that the blockchain could be the solution for countering such an attack.
Of course, the report isn’t composed with rose-colored glasses, and it acknowledges some needed areas of improvement. Primarily, the Congress is focused on security and regulatory concerns, which, incidentally are the same topics that most crypto enthusiasts worry about as well.
Even so, the document is quick to note that
“No evidence exists of anyone hacking blockchain’s underlying protocol.”
Instead, the report attributes security breaches to centralized crypto exchanges and digital wallets, two components of the crypto economy that are not as secure as they don’t run on blockchain technology.
On regulation, the report cites a lack of clarity on a Securities designation for digital currencies as a holdup for the broader adoption.
“Blockchain’s market reception fits the pattern of a new, not fully understood technology.”
This report isn’t groundbreaking because of its content. For the already-initiated, most of the content feels rudimentary and trite.
Even so, it’s a significant validation for cryptocurrencies and their underlying technology.
In a series of final recommendations, the report encourages policymakers, regulators, and entrepreneurs to:
“continue to work together to ensure developers can deploy these new blockchain technologies quickly and in a manner that protects Americans from fraud, theft, and abuse, while ensuring compliance with relevant regulations.”
Obviously, cryptocurrencies and blockchain technology are transformative developments, and Congress might have the best advice of all: keep building something brilliant.
Cover Photo by Kyle Glenn on Unsplash