60 total views, 1 views today
On Tuesday, a letter from eleven Members of Congress to the Secretary of the Treasury was made public that urged Secretary Mnuchin to consider the use of blockchain technology to help in providing COVID-19 stimulus checks to Americans. With the high-profile nature of suggesting the U.S. Treasury could deliver money owed to the public with both speed and security as a result of using blockchain technology is the equivalent of the ‘Super Bowl’ of blockchain use cases for the private sector.
The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law on March 27, 2020 and provided for payments; however, timely delivery of the money to all who are entitled to the stimulus has proved a challenge. While 90 of the 150 million eligible individuals have received their payments as of April 17, the 60 million that remain include low-income families who do not normally file income tax returns and face issues with accessing basic financial services.
The letter urges Treasury to ‘…utilize private sector innovations such as blockchain and DLT to support the necessary functions of government to distribute and track relief programs and direct that all guidance support the use of technology to facilitate delivery of CARES Act benefits.’
The letter was spearheaded by Congressman Darren Soto (D-FL), Co-Chair of the Congressional Blockchain Caucus, as well as fellow Co-Chairs Congressman Tom Emmer (R-MN) and Congressman David Schweikert (R-AZ). Additional signers include Congressman Ted Budd (R-NC), Congressman Warren Davidson (R-OH), Congresswoman Tulsi Gabbard (D-HI), Congressman Anthony Gonzalez (R-OH), Congressman Ro Khanna (D-CA), Congressman Ben McAdams (D-UT), Congressman Bill Posey (R-FL), and Delegate Stacey Plaskett (D-U.S. Virgin Islands). Delegate Plaskett is the first African-American woman to join the Congressional Blockchain Caucus last year.
The letter also addresses the need to stay competitive with China. Urging the Administration to promote blockchain technology is not new to Congressman Soto, who was part of a bi-partisan letter in July of 2019 to the Larry Kudlow, Chair of the National Economic Council in the White House. That letter urged the White House to take action on numerous fronts with blockchain, stating, ‘To continue its standing as a world leader in technological innovation, the United States should engage with policymakers, the private sector, and academia to promote the research and development of blockchain technology; explore its benefits for private and public use; collaborate on cross-sectoral policy, standard-setting, scalability, and implementation issues; and discuss potential regulatory approaches.’
The Policy Leap From Bitcoin To Blockchain
President Donald Trump, during the hearings over Facebook’s potential Libra cryptocurrency, made his first public comments on bitcoin:
Treasury Secretary Mnuchin went on to explain his reservations on crypto when he stated, ‘I want to be careful that anybody who’s using bitcoin — regardless of what the price is — is using it for proper purposes and not illicit purposes…And there are billions of dollars of transactions going on in bitcoin and other cryptocurrencies for illicit purposes’.
However, Blockchain, a technology that enables the peer-to-peer transactions for cryptocurrency, has been explored around the world by major companies on how to process faster payments and save on processing costs. Forbes produces a list of enterprises known as the ‘Blockchain 50’, that encompasses ‘enterprises embracing the technology underlying cryptocurrencies like bitcoin and using it to speed up business processes, increase transparency and potentially save billions of dollars’.
China, who recently announced its own ‘National Blockchain’, implements a very different policy toward cryptocurrency than it does for blockchain. While many times China looks to restrain the use of private cryptocurrencies, the country’s ambitious view of blockchain is such that numerous resources are provided to help accelerate the growth of this technology.
While not much has been heard about blockchain from the Administration yet, hopefully there will be the ability to understand the distinction and not have blockchain be conflated with the idea of bitcoin or lose focus on how many in the private sector believe blockchain can be used to help accelerate delivery of stimulus checks under the CARES Act.
Roger Brown, Head of Tax & Regulatory Affairs for Lukka, a firm offering an advanced virtual currency tax preparation program, noted, ‘Blockchain utilization serves as a compelling way for people to receive their stimulus checks as there are a myriad of scams present that deny the vulnerable from receiving aid.’
Erick Pinos, the Americas Ecosystem Lead at Ontology, a high performance public blockchain and distributed collaboration platform, notes, ‘ Blockchain allows for the fast and secure transfer of money from one individual to another for a very low fee and without the need for an intermediary. In a nutshell, blockchain-based payments do not require the sender or the user to have access to a bank account,’ said Pinos.
Alex Mashinsky of Celsius, a crypto lending platform, noted that blockchain is still in its infancy, stating, ‘There is not a blockchain anywhere in the world,’ that is ready to handle such an undertaking as the delivery of COVID-19 payments.
For those who do not normally file tax returns, the U.S. Treasury has offered a remedy to receive their money on the IRS website. However, the online method involves providing your name, address, and a bank routing and account number – the last of which is sometimes a major hurdle as low-income families tend to be either unbanked or underbanked and may not have a bank account.
Therefore, it is reasonable to foresee continued pressure from Congress on the White House and Treasury to find ways to deliver these COVID-19 checks to those most in need in a timely way and to bring the most sophisticated payments technologies to bear.
The letter is below and dated April 23 and was made public April 28.