MONTGOMERY, Ala. — The inaugural meeting of the Alabama Blockchain Study Commission Tuesday saw heads of several industries and regulatory agencies urge caution as the state explores ways to utilize the emerging technology.
“Blockchain, Bitcoin, cryptocurrency has hit national and international news and is being developed and continuing to expand,” said Sen. Greg Albritton, R-Range, the chair of the committee.
“The question that I think this body ought to consider is what is Alabama’s role in that so that we can determine what place, if any, Alabama has as a state to control or regulate that.”
The commission was established through a joint resolution introduced by Albritton earlier this year to research ways the state could best utilize blockchain technology, as well as determine how it should be regulated.
Blockchain technology is the foundation upon which cryptocurrencies like Bitcoin are built, and act as secure public ledgers that records and verifies all transactions. While the emerging technology is secure, it is far less regulated when compared to traditional financial institutions.
Among the commission’s appointees, which included lawmakers, leaders of state agencies and industry stakeholders, was Wade Preston of the Alabama Blockchain Alliance, an organization that advocates for blockchain development and adoption.
Citing a recent adoption of blockchain technology in California in which the state digitized its 42 million car titles, Preston suggested the state could benefit from adopting blockchain technology for its own record keeping to improve both efficiency and security.
“We have a lot of inefficiencies – allegedly – within government structures, especially when it comes to record keeping,” Preston said.
“We also have a lot of vulnerabilities when it comes to servers and the surface area for bad actors to be able to attack, steal peoples’ identities and whatnot, and blockchain offers solutions to these inefficiencies and security issues.”
Amanda Senn, director of the Alabama Securities Commission, shared anecdotes suggesting the industry was fraught with fraud compliance issues, and urged lawmakers to be thorough when crafting regulations for the industry.
“Many of these companies that are popping up around cryptocurrency that are allowing consumers and investors to deposit their assets (or) make loans with these digital assets are not complying with laws that are required of financial institutions in this state,” Senn said.
“Some of the crypto firms are charging fees that would never be allowed by any of our regulated financial entities, and so it’s just not fair for these organizations to pop up and operate like financial institutions to the…
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