House Subcommittees Examine Leveraging Blockchain Technology to Improve Supply Chain Management

On Tuesday, May 8, the House Science, Space and Technology Committee’s Oversight and Research and Technology subcommittees held a hearing titled, “Leveraging Blockchain Technology to Improve Supply Chain Management and Combat Counterfeit Goods”.

Tuesday’s session was largely educational, but is part of a broader effort to lay the foundation for federal policy changes that might be needed. One key moment, however, was when Douglas Maughan, who currently serves as the Science and Technology Directorate’s cybersecurity division director within the Department of Homeland Security, noted that “the applications are almost limitless” when it comes to the possibilities for embracing blockchain technology.

Another key witness at the hearing was Michael White, shipping giant Maersk’s head of global trade digitization. White supports the implementation of blockchain and new technologies into the shipping industry bringing up the fact that “the industry operates much as it does or has since the introduction of shipping containers in the 1950s.”

“Container shipments can also be delayed because essential paperwork has not caught up with the goods they are carrying. Everyone agrees that there must be a better way but no single participant can effect change … in 2016 Maersk and IBM began a collaboration with the goal of digitizing supply chain.” – Michael White

Also represented at the meeting was UPS, which is a member, along with Maersk, of the Blockchain in Transport Alliance, a coalition of industry groups focused on creating common standards. UPS’ Vice President of Global Customs and Brokerage Staff Chris Rubio, however, expressed concerns. Blockchain would require an “overhaul” in current practices of the supply chain and force a major commitment, across the board, to adopt digitization. Rubio went on to note, however, that though it would be a difficult transition at first, “by having the ability to track any product from the beginning of its journey through the supply chain, blockchain may provide a solution to unknown or unverified product origins.”

Subcommittee Chairman, Rep. Ralph Abraham (R-CA), positioned the event as one that would look at both private- and public-sector use. The ongoing issue of cryptocurrencies crept into the hearing, with Rep. Barry Loudermilk (R-GA) suggesting that those present ought to look into “the technology beneath it.” Rep. Don Beyer (D-VA) argued that the U.S. ought to play a major role in advancing the tech more broadly. In what could have been the takeaway quote of the hearing, Rep. Loudermilk, who has a technological background, concluded by saying, “If we can get over the stigma of cryptocurrencies and look at the technology beneath it, it could be a solution to a lot of our cybersecurity and data protection issues.”

To view a transcript of the hearing, please click here.

Coauthored by Patrick Firth, Michael Best Strategies, Washington, D.C.

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