United States Federal legislation on defense may contribute to the legalization of the blockchain

United States Federal legislation on defense may contribute to the legalization of the blockchain

Not quite clearly worded provision in the bill on military expenditures may provide a starting point for the implementation of the blockchain in the work of state institutions in the USA.

Being part of a larger act called the national defence Act (NDAA), the Law on the modernization of technology in government (MGT) will allow in the framework of the public sector to redirect the savings (which had to be returned to the Ministry of Finance) in internal funds working capital with the possibility of subsequent use to update it systems.

Under this bill, agencies will be permitted to use the funds for working capital for modernization projects in one of the following areas: cyber security, migrating legacy systems to the cloud, and “other innovative platforms and technologies”.

Although no direct mention of the blockchain in the text MGT no, it is suitable in accordance with the parameters and purpose of the letter of the law in relation to the technology improvements on the experimental version at the institution level.

Recalling the previous statements by government officials of the United States, Trey Hodgkins, senior Vice President of public sector at the information technology Council in Washington, said the portal CoinDesk the following:

“The blockchain, obviously, was included in the list of the technological opportunities provided by Congress in the bill for state institutions. The main idea was to create a Fund with a certain level of freedom of action, and the agencies can decide what to invest in.”

Meanwhile, a special delay is not expected: MGT may soon enter into force. The NDAA already took and in the House of representatives and in the Senate. Currently, the bill awaits signature by President Donald trump, after which he will move into a full-fledged law.

The catalyst of the blockchain

Company providing corporate blockchain-services in the public sector, share the optimism Hodgkins and believe that such a law could affect the increased funding and implementation of experimental technologies at the state level.

“We will be very pleased with the adoption of the law, MGT, as it encourages institutions to move from costly and ineffective legacy systems to new technologies such as the blockchain and smart contracts,” says Todd Miller, Manager of market issues U.S. ChromaWay. This company has been a hybrid blockchain databases, and currently opens an office in Washington.

Jeremy Wilcox, managing Director of public sector ClearEdge Partners (consultant in technology), said that the bill could be “the catalyst” technologies, even if institutions have to redirect only a small percentage of the funds on the blockchain.

Freedom of action provided by MGT may also help institutions to find a way around the process of appropriation of budget funds by the Congress, which is in political deadlock.

Instead of approving annual budgets, Congress in recent years has adopted a number of laws on the allocation that allows you to temporarily continue the action permits received in the previous year. This decision negated attempts to provide funding for technological improvements.

According to Hodgkins, “unfortunately, this process is fundamentally inefficient, and from the point of view of the newest technologies it is very difficult to establish a system in which the institution can plan, design and create architecture, and then to acquire the necessary and find a use for it”.

All about to change thanks to MGT, and public institutions will have more freedom in choosing technological improvements and paying for them.

In respect of freedom of choice Wilcox said the following:

“Don’t have to go to Congress and ask whether it is possible to add to the budget expenditure on the blockchain”.

Obstacles on the path of change

Although the law MGT and provides the perfect opportunity to use the blockchain in the framework of the projects “modernization” of the government, the technology must demonstrate effectiveness at the enterprise level to the final implementation agencies.

Cloud computing and database with a relational structure has already proven its reliability, scalability and replacement of existing legacy systems in large organisations such as public institutions. At the same time before the blockchain solutions still have the challenge to earn the same level of confidence.

After all, government agencies are still struggling with the risks of cyber threats related bloccano.

In one of the sections of the bill the NDAA States that the Pentagon needs to test the implementation of the blockchain in state institutions on the subject of cyber threats and to provide reports to Congress within 180 days.

The bill provides that the Secretary of defense shall provide to Congress: “Assessment of actual or planned use of such technologies, the Highest Federal bodies of state, the U.S. government and critical infrastructure networks.”

In addition, the reports should assess the use of technology by foreign government agencies, criminal and extremist groups, as well as “a description of the potential use of blockchain technologies and other distributed databases in offensive and defensive cybercanine”.

The latter shows the government’s interest in applying the unique properties of blockchain technology for the modernization efforts in the field of cybersecurity.

“If the blockchain is associated with modernization, it could become part of the solution,” said Wilcox. In conclusion he added:

“Time will tell. It will all boils down to what kind of solutions or services will be provided”.

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