The White House Office of Science and Technology Policy (OSTP) is seeking input on the whole-of-government effort to develop a crypto strategy.
OSTP and the National Science Foundation are now co-chairing an interagency FTAC under the NITRD Subcommittee to develop this R&D Agenda.
As part of it they ask for public input until March 3rd. They want comments on the potential application of blockchain tech and digital assets.
“OSTP seeks responses that could inform the full breadth of Federal R&D priorities related to digital assets, including R&D initiatives that could complement the Federal Reserve’s research and experimentation related to CBDCs…
We also encourage respondents to explain how their R&D suggestions could help advance policy priorities or recommendations,” they say.
They mention in particular how blockchain “may support easier integration and coordination of clean energy resources, such as by providing a better ledger for the authentication, participation, and renumeration of beneficial services from distributed energy resources (e.g., electric vehicles, connected appliances and devices, residential and commercial energy storage systems, solar power systems) on a smart grid.”
This follows an executive order by the US president Joe Biden in March last year which outlined the first whole-of-government approach to digital assets.
It required numerous reports on crypto across all government departments in the first effort of its kind.
The request by OSTP seems to be at its broadest, asking for comments on any crypto related aspect to inform their research.
One suggestion we would provide is to look into the potential usage of crypto for capital formation through a global market.
Although controversial, this could fund research and innovation that otherwise would not be tapped by Venture Capitalists due to it being too niche or not having the potential for scale.
Such capital formation in addition can be more equitable as the entrepreneur has more bargaining power than with VCs, a close-nit group with a monopoly over this market.
That’s one of the most impactful use case, with both Binance and Crypto.com arising this way.
Legitimizing this sort of market can spur innovation in other industries too which may tap into crypto finance.
That’s particularly relevant for non-US entities that may not have access to US capital formation markets.
Another potential area of research is how crypto can increase transparency in government spending.
If a proportion of taxes for example was accepted in crypto, then how these funds are used can be tracked to some extent.
Unlike banking, which is private with only banks able to see movements, the global public blockchain allows anyone to track fund movements, providing greater transparency.
Another more complex research aspect is how data feeds can facilitate automatic crypto insurance.
As an example, if data was inputed digitally from a trusted source on car accidents for example, a smart contract can be designed to give out insurance payments based on that data.
Potentially tokenizing bonds is an obvious research topic for the government. That’s in particular because it opens access to the ordinary man without banks having their cut and in a way that can be incorporated in defi, potentially increasing the attractiveness of bond holding especially for the new generation.
With such bonds, the government would have to take the leap and the risk of it actually being a token, rather than a facade of sorts where the bond is in paper but you kind of have the token as decoration.
That would mean that if you lose it, you lose it, but it would also mean that it is an actual crypto bond, a globally accessible asset to any and everyone.
A far more daring topic would be if some reserves should be held in crypto. Although that’s more a matter for the central bank, the government can consider if in the case of war for example crypto would be a better means than gold.
And another area is stablecoins. In particular whether they extend the dollar’s role as a reserve currency, and therefore whether they should be integrated as a matter of policy, in addition to whether they’re a better means of achieving the aim of cryptoing the dollar than CBDCs.
For pure research, the government might want to look into how DAOs can foster a sense of community to poll for example a neighborhood on how taxes should be spend on that particular area with the DAO controlling a portion of those taxes.
Those are just some potential topics among many others, but the Biden administration should be commended for taking this exercise as it recognizes that cryptos have now become a sufficiently notable and important part of the economy to need a strategy.