In the United States, the political stage is set for what may turn out to be one of the most infamous presidential elections in America’s history. As noted in an earlier blog post and client alert, the regulation of encryption by U.S. legislators and regulatory agencies may have a damaging impact on FinTech, and in particular, on the adoption of blockchain and other distributed ledger technologies. In this post, we look at the relevant Party Platforms to learn what, if anything, they say about encryption.
Now that summer is coming to a close in the U.S., one way for American voters to learn more about their presidential candidates and what the candidates and their respective parties aspire to achieve is to review each party’s “platform.” This approach is especially useful if there is a particular topic that resonates above all others. The regulation of encryption by U.S. legislators and regulatory agencies may have an inimical impact on FinTech, and in particular, on the adoption of blockchain and other distributed ledger technologies.
Up to November, Americans will essentially have the option to vote for candidates from four political parties, the Democratic, Green, Libertarian, and Republican parties. According to the Democratic Party Platform, the Democrats will, “support a national commission on digital security and encryption to bring together technology and public safety communities to address the needs of law enforcement, protect the privacy of Americans, assess how innovation might point to new policy approaches, and advance our larger national security and global competitiveness interests.” For their part, the Republicans note that, “technology companies have responded to market demand for products and services that protect the privacy of customers through increasingly sophisticated encryption technology.” The Republican Party Platform goes on to assert that while encryption provides privacy protections crucial to the digital economy, criminals and terrorists seek to use encryption technology to harm Americans.
In contrast, the Libertarian Party “opposes all restrictions and regulations on the private development, sale, and use of encryption technology.” Libertarians, “specifically oppose any requirement for disclosure of encryption methods or keys, including the government’s proposals for so-called ‘key escrow’ …, and any requirement for use of government-specified devices or protocols.” Finally, the Green Party does not appear to address encryption directly, however, Greens favor civil liberties and strong privacy rights.
Clearly, the “threat” of encryption remains on the radar of the two largest American political parties. Yet, blockchain relies on asymmetric encryption, which is a public key cipher protocol, to ensure the veracity of the distributed ledger. So, is a vote for a particular candidate a vote for the rejection or adoption of blockchain? While the answer to that question is not clear, this much is for certain, blockchain will continue to face threats at the cross-roads of innovation and regulation.