Why Is ITIF Urging Policymakers To Support Blockchain?

Ranked as the world’s leading think tank for science and technology policy by the University of Pennsylvania, the ITIF (Information Technology and Innovation Foundation) is working with policymakers in supporting blockchain innovation and adoption. It aims to help in the creation of a blockchain policy which will help regulate the usage of this technology. The ITIF has released a report named ‘A Policymaker’s Guide to Blockchain’ which explains the workings of a blockchain, explores policy barriers to deployment, reviews its applications, and outlines some principles which can be used to advance this technology.

ITIF is an independent non-profit and an educational institute which operates on the mission of formulating, evaluating, and promoting policy solutions to boost productivity and accelerate innovation which will spur opportunity, growth, and progress. ITIF follows a high standard of research integrity. ITIF is home to the highly regarded ‘Center for Data Innovation,’ which develops and promotes policy ideas and it also spearheads the ‘Global Trade and Innovation Policy Alliance,’ which is an international network of think tanks conducting evidence-based research into policies. ITIF produces its original analysis, research, and commentary.

As we know, blockchain is a distributed digital ledger where information is shared over a peer-to-peer network. This allows multiple parties to engage in transparent and secure transactions with one another without the need for an intermediary. This technology has a significant impact on various industries.

The report released by ITIF highlights the importance of technology neutrality. It pointed out that the market needs technology-neutral laws which do not favor or disadvantage any businesses or applications. The report encourages governments to make use of blockchain technology for promoting mass adoption. It supports blockchain based on certain significant features such as decentralization, transparency, and permanent records.

Its guide on blockchain policy mentions that authorities can use blockchain for more than just smart contracts and cryptocurrencies. Some of the applications mentioned in the report are decentralized marketplaces, authenticity tracking, digital identity, and data services. In the report, ITIF revealed ten policy principles which would support blockchain innovation and adoption and they are:

• Policymakers follow a technology-neutral approach towards different applications.
• Supporting blockchain research and development.
• Setting rules for blockchains to be applied at the national level.
• Active support in blockchain adoption and deployment in the public sector.
• Promoting legal certainty for blockchain-based applications.
• Avoiding laws and regulations which prevent the use of blockchain technology.
• Creating a flexible regulatory environment to enable experimentation.
• Promoting data interoperability of blockchain applications.
• Use of targeted regulatory enforcement where companies can be incentivized to protect customers.
• The collaboration of policymakers towards harmonization of blockchain regulations across international levels.

In the words of Alan McQuinn, Senior Policy Analyst of ITIF and Co-author of the report, “Blockchain creates many opportunities to boost productivity, open new markets, and disrupt legacy business models across a variety of sectors. Policymakers should actively support the development and deployment of blockchain technology.”

Information about ‘regulatory sandboxes’ is also shared in the report. Regulatory sandboxes allow blockchain startups to experiment with their products or services in a safe environment. ITIF’s approach includes relevant organizations which protect consumers without placing stringent limits on blockchain-based applications.