A governor-appointed council reviewed opportunities for and obstacles to blockchain technology in Colorado for one year before releasing its findings outlining statutes, laws and regulations in need of modernization.
The Colorado Council for the Advancement of Blockchain Technology Use gave lawmakers and the governor’s office a potential path to blockchain implementation to consider with the release of its final report last week.
The council, which was created by former Gov. John Hickenlooper in June 2018, continued after Gov. Jared Polis took office in January with the goal of identifying barriers and opportunities for the emerging technology.
Within the 30-page document are detailed explanations about antiquated statutes, laws and regulations, believed to stand in the way of blockchain development in certain sectors. The council outlined potential legislative actions and other solutions that could allow the technology to flourish if enacted.
“Yet despite the complexity, blockchain technology and innovation has continued to grow in Colorado,” the report states. “Over the past three years, blockchain companies affiliated with Colorado have raised over $50 [million] in venture capital funding.”
The council identified eight problem areas that lawmakers and the governor’s office need to address to establish Colorado as a national hub for blockchain innovation. They are: definitions of tokens and digital assets; the creation of securities including regulatory clarity around token sales and a framework for identifying blockchain assets; clearer processes for the taxation of cryptocurrency; improved banking regulations for money transmission; the expansion of banking services to include businesses with a cryptocurrency focus; the standardization of blockchain asset custody procedures; the modernization of statutory, regulatory and case law to accommodate emerging technologies; and a process for defining blockchain-related debt transactions.
Office of Information Technology Executive Director Dr. Theresa Szczurek said the report showcased important work already underway within the executive and legislative branches, such as the Colorado Digital Token Act — signed into law March 6 — that clarifies regulations for companies desiring to raise growth capital by issuing digital tokens.
“Our continued efforts will provide Coloradans with secure, transparent and trusted data access for government services through the application of blockchain and distributed ledger technologies,” Szczurek said in a statement.
The council fulfilled its charge in June, with its work going forward divided among five agencies, including the Department of Regulatory Agencies, Office of Information Technology, Department of Revenue, Department of Higher Education and the Office of Economic Development and International Trade (OEDIT).
“The Blockchain Council established a thoughtful roadmap for our state agencies to collaborate and consider the impact and evolving potential of this rapidly growing technology,” said OEDIT Executive Director Betsy Markey.
The council consisted of 16 members appointed by Hickenlooper who operated out of OEDIT, including industry representatives, lawyers, leaders from various government agencies and elected officials, the release states. When Polis came into office, some appointees from the executive branch were replaced by the new administration.
In May, Polis appointed Thaddeus Batt as the state’s first-ever blockchain solution architect. Batt is tasked with leading the blockchain program to explore how the technology and other solutions can help protect the state’s data.
The council concluded in its report that blockchain has significant potential for both new use cases and economic growth.
“In order to realize this potential, however, policymakers need to come together to provide clarity, craft thoughtful and responsible regulations, and support entrepreneurs and innovators,” the document states. “This council hopes that its work and this report can provide a foundation for ongoing efforts towards these outcomes.”