Coming off the back of the first U.S. Congress hearing for, ‘Blockchain Applications Beyond Bitcoin’, it seems that governments are finally paying attention to the biggest technological revolution since the Internet and—more importantly—how it will affect them. Here are just a few of the topics lawmakers may be considering.
This issue was raised recently by one of President Bush’s former deputies. Juan Zarate – credited with creating the financial sanctions tools in the wake of 9/11 – today warns that blockchain technology has the potential to circumvent many of his own initiatives.
According to Mr Zarate, Sanctions Evasion (the ability to fund businesses in countries under sanction), and Government Exploration (the weakening of state currencies, as their value is siphoned off into cryptocurrencies not limited by political borders), both represent some of the biggest threats of Blockchain to national security.
Push-back from banks towards cryptocurrency is nothing new. Just this month, major banks have moved to ban purchases of Bitcoin using their credit cards. As banks begin protecting themselves from having to stump up the money for unpayable loans, national governments are beginning to realise threats to their own economies. As the rewards for investing in crypto increase, so will the amount of people taking the risk, and without the means to pay these back, governments could soon find themselves facing a credit collapse.
A State Cryptocurrency
Despite one of Blockchain’s biggest selling points being its decentralized nature, the idea of State Cryptocurrencies has been gaining traction following the recent performance of the wider market. Indeed, as Peter Smith (Blockchain) tells us, “We are 24 months away from a major government issuing a sovereign digital currency.”
While China, Sweden, Japan and Estonia have all announced digital currency projects already, Jacob Eliosoff (Trevi Digital Assets Fund) has emphasized that such projects do not represent cryptocurrency, saying plainly that, “one institution controls it, and they can change the rules when they want. That’s just a currency that happens to run on a computer.”
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