Eleven members of Congress are calling on the U.S. Treasury Department to look at new technologies, including blockchain and distributed ledger technology (DLT), to help streamline how cash and supplies are distributed under a federal law trying to boost the economy during the COVID-19 crisis.
A letter addressed to Treasury Secretary Steven Mnuchin points to blockchain and DLT as secure “new mechanisms” for moving money quickly and transparently, which could in turn boost liquidity in distributing funds via the federal CARES Act.
U.S. Congressman Darren Soto (D-Fla.) spearheaded the letter, dated April 23 but released publicly on Tuesday.
Reps. Tom Emmer (R-Minn.), David Schweikert (R-Ariz.), Ro Khanna (D-Calif.), Warren Davidson (R-Ohio), Ted Budd (R-N.C.), Tulsi Gabbard (D-Hawaii), Anthony Gonzalez (R-Ohio), Bill Posey (R-Fla.) and Ben McAdams (D-Utah) and Delegate Stacey Plaskett (D-U.S. Virgin Islands) joined Soto in signing the letter.
“We understand your primary mission is to deliver urgent and necessary assistance to America’s small businesses and working families,” the letter says. “As the pandemic continues to impact the economy, we look forward to supporting the Administration’s efforts to get American small businesses running while also prioritizing health, safety and proper oversight.”
However, the letter says, the Treasury Department can take “additional steps” to improve its efforts.
“We thus strongly encourage the Treasury Department 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 says. “Such steps will ensure both that America retains its technological advantage and that relief is delivered quickly to the small businesses and individuals who need it most.”
The letter points to China’s rollout of its own blockchain system as an example of other nations pursuing the same technology.
Soto, who co-chairs the Congressional Blockchain Caucus, told CoinDesk he had spoken with developers, entrepreneurs and other members of the caucus in drafting the letter.
In his view, blockchain or DLT tools might be the most secure ones available to solve some logistical challenges the federal government is facing in distributing funds and other supplies.
Blockchain-based systems could be coupled with artificial intelligence (AI) to better manage the data being tracked or transmitted, he said.
“It works so well in hand with artificial intelligence and it's not subject to hacking or changes once you have that fixed ledger down,” he said.
Soto sees AI as a supplementary tool, rather than something to take charge of a distribution network. Policymakers would still need to set strict parameters and humans would still have to act as administrators for such a system, he said.
“We could see greater speed and efficiency right now,” he said of the proposed system.
Due to the COVID-19 crisis, there is a lot more demand for certain goods than there is supply, and having individuals manage their distribution is a difficult task.
“I believe it’s worth at least doing pilot programs,” Soto said. The results of these pilots can inform what a next step might look like, he said, though he’s not looking to immediately replace existing systems with blockchain-based versions just yet.
This is a good time to start the conversation, Soto said.
“During this terrible crisis there are certain opportunities to advance technologies,” he said. “This presents us with an opportunity to potentially get greater efficiency for a lot of these logistical issues.”
Read the full letter below:
CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk offers all employees above a certain salary threshold, including journalists, stock options in the Bullish group as part of their compensation.