Government and industry experts told members of the House Subcommittee on Research and Technology last week that blockchain technology pilots and trials are yielding promising results for supply chain and government operations applications.
“I think the applications [of blockchain] are almost limitless,” said Dr. Douglas Maughan, director of the Cyber Security Division in the Homeland Security Advanced Research Projects Agency at the Department of Homeland Security (DHS). He emphasized the technology can offer Federal government agencies advantages in transparency, supply chain visibility and automation.
He added, however, that blockchain technology has its limits. “I actually believe that voting is probably not a place where we would use blockchain technology,” he told subcommittee members.
Maughan said that while many organizations are eager to deploy blockchain, DHS has counseled them against jumping in without careful study first. “You really need to walk through a certain set of questions to decide if you really need a blockchain, and in a lot of cases, people don’t need a blockchain,” he said.
Maughan pointed to DHS’s Customs and Border Patrol (CBP) organization as an early Federal agency adopter that has run trials using blockchain to ensure the authenticity of data from cameras and Internet of Things (IoT) devices. CBP also is working on using blockchain to test certificates used within the North American Free Trade Agreement, along with private-sector firms, he said.
Industry executives described difficulties of the global supply chain, and how blockchain pilot projects have proven successful in addressing some of those. “Administrative costs can sometimes exceed the end-to-end transportation costs for a given container,” explained Michael White, Head of Global Trade Digitization at shipping giant Maersk, at the May 8 subcommittee hearing. “Everyone agrees that there must be a better way, but no single participant is able to affect change.”
Chris Rubio, Vice President of Global Customs Brokerage at UPS, said Congress can help to advance further use of the technology by supporting creation of blockchain standards in cooperation with foreign governments. “The U.S. must work with our international trading partners to establish a common set of blockchain standards that are recognized throughout the world,” he said.
Witnesses at the hearing also discussed using blockchain to combat counterfeiting, which generated some enthusiasm among subcommittee members. “It will revolutionize tracking of goods somewhat like GPS revolutionized navigation,” said Rep. Ralph Abraham, R-La.