Regulators Could 'Take Away' Blockchain's Efficiencies, Congressman Warns
"What would happen if our Department of Motor Vehicles held all bills of sale on the blockchain?"
This was the first of several possible use cases mentioned by Rep. David Schweikert (R.-AZ) during his keynote address on day two of the D.C. Blockchain Summit, where he outlined some of the challenges he sees in mainstream blockchain adoption.
One of his chief concerns surrounded regulation, the Congressional Blockchain Caucus co-chair told the audience. While wider adoption of blockchain technology will require some guardrails, too many requirements could inhibit innovation. During his speech, he warned:
"The regulators are all going to want to step in and say 'I want to be the arbitrator so I can reverse a transaction.' That's where I'm most worried about the regulatory world, because they're going to want to slow this down and say 'I need 24 hours to vet this,' and they're going to take away all the efficiency."
Schweikert, who has co-sponsored a bill in Congress to exempt small bitcoin payments from taxation, explained his strategy for persuading fellow lawmakers of the blockchain's benefits.
"How do I take 435 of us in Congress? I don't need them to understand what a node network is, from my view I'm trying to sell the societal good that can come from a bulletproof ID," he said.
Moreover, existing precedents can help define how blockchain legislation should work. For example, he said, "we actually have 100 years of history of 'how do you tax people that do foreign exchanges?'"
Using existing tax code to determine how to tax cryptocurrencies would simplify that process, he said. "We don't have to reinvent the wheel from top to bottom. We actually do have case laws and IRS rules that are out there to think about these things."
Ultimately, blockchains can be useful when applied correctly, Schweikert said. He suggested that small communities can use private networks for shared services, such as a babysitting cooperative, or larger networks can store medical data.
"There's so many applications here that if you start to unify the mechanisms, it solves a lot of my societal problems," he said.
Photo via Annaliese Milano for CoinDesk.