The Information Technology and Innovation Foundation (ITIF) works with policymakers to support blockchain innovation and adoption. The organisation seeks to aid in the creation of a blockchain policy to regulate the usage of this technology. As such, it is guided by a series of principles and best practices.
The ITIF has released A Policymaker’s Guide to Blockchain, a report that highlights the importance of technology neutrality on behalf of the authorities. The market needs technology-neutral laws that won’t favour or disadvantage any applications or businesses. Moreover, the legal framework shouldn’t ban or limit innovation in any way.
The document encourages governments to use blockchain technology at all levels to promote mass adoption. Some of its main arguments for blockchain are transparency, permanent records, and decentralisation.
Helping policymakers understand blockchain technology
The people behind the ITIF are aware that some policymakers are still confused about how blockchain technology works and what benefits it has. Despite blockchain being adopted by some local and national authorities, many regulators are far from familiar with the technology.
They need more time to analyse the implications of blockchain adoption and come up with a relevant blockchain policy.
A Policymaker’s Guide to Blockchain tries to demystify the technology and explain its applications in the real world. It explains why the ecosystem shouldn’t be charged with “burdensome rules” that could limit or ban the usage of cryptocurrencies and distributed ledgers.
The report is also seeking to keep the government up to date with the blockchain industry’s quick development. It uses case studies to explain how the technology has evolved from the appearance of Bitcoin and what blockchain adoption could achieve in the future.
The need for a unique blockchain policy and relevant regulations
The ITIF’s guide on blockchain policy mentions that authorities could use distributed digital ledgers for more than cryptocurrencies and smart contracts. Among the applications mentioned in the report are data services, digital identity, decentralised marketplaces, and authenticity tracking.
However, the ecosystem needs public encouragement and administrative support that would make a favourable foundation for innovation. This means policymakers shouldn’t focus on overly rigid regulations that could slow down blockchain development (like some of the European data-usage laws, for example).
The entire report is meant to underline the importance of having a “flexible and targeted” blockchain policy in place. This way, authorities can encourage innovation and new uses of blockchain technology that could benefit the entire society.
10 principles to guide policymakers
The experts from the Information Technology and Innovation Foundation came up with 10 principles meant to ensure that regulations won’t limit blockchain applications and business models.
With these principles, the ITIF aims to guide policymakers toward creating regulations that are in line with the market and its reality.
- Policymakers have a tech-neutral approach to different applications.
- The public sector actively supports blockchain adoption at all levels.
- Governments invest more in research and development of blockchain technology.
- Policymakers adopt a standardised law that legitimates all forms of signatures, including the ones on blockchain-based accounts.
- Rules for blockchains apply at the national level rather than subnational.
- Blockchain technology needs a flexible regulatory environment that encourages experimentation.
- Policymakers use targeted regulatory enforcement to motivate blockchain-based companies to protect consumers.
- Governments stop all laws and regulations meant to limit or eliminate the use of blockchain technology.
- Regulators promote data interoperability.
- Policymakers collaborate for harmonisation of blockchain regulations at international levels, across sectors.
As you can see from these principles, the guide calls for a legal framework for blockchain technology. Yet at the same time, the ITIF encourages prudency in regulating the market to avoid limitations that could slow down new uses of the technology.
The report also mentions “regulatory sandboxes”, where blockchain-powered start-ups can experiment with their products or services in a safe environment. Policymakers and regulators should watch these ecosystems closely and revoke privileges if any company fails to comply with the terms.
Encouraging policymakers to use the right blockchain policy
The Information Technology and Innovation Foundation was founded in 2006 as an independent nonprofit institute. Its primary purpose is to provide policymakers with guidance, information, and analysis on how new technology can impact operations across sectors.
The ITIF encourages governments to support legitimate blockchain innovation and adoption. The organisation’s approach includes relevant regulations that protect consumers without placing strict limits on blockchain-based applications.
Among the ITIF’s educational activities, the members of the institute advise policymakers through direct interaction in national and regional capitals around the world.