Congressional Bill Would Require Report on Blockchain's Defensive, Offensive Applications

On September 18, 2017, the Senate passed an amended version of House Bill 2810, the National Defense Authorization Act for Fiscal Year 2018, a military appropriations bill. The bill had passed the House on July 14 by a vote of 344 to 81. While in the Senate, the bill was amended (through a proposal by Senator McCain) to include Section1630C, which requires the Secretary of Defense to collaborate with other agency and department heads to draft and deliver a report on the “potential offensive and defensive cyber applications of blockchain technology and other distributed database technologies” within 180 days of the bill’s passage. The report would also include “an assessment of efforts by foreign powers, extremist organizations, and criminal networks to utilize these technologies,” as well as “an assessment of the use or planned use of blockchain technologies by the United States Government or critical infrastructure networks and the vulnerabilities of such networks to cyberattacks.”

The bill requires that the report be submitted to the following bodies: the Committee on Armed Services, the Select Committee on Intelligence, and the Committee on Homeland Security and Governmental Affairs in the Senate; and the Committee on Armed Services, the Permanent Select Committee on Intelligence, and the Committee on Homeland Security in the House of Representatives.

Since the Senate version of the bill incorporated substantial amendments, including the provision for the report on cyber applications of blockchain technology, the bill will now head to a conference committee to reconcile the differences. If the conferees do not reach an agreement, then the bill will not move forward. If an agreement is reached, however, the committee will send their recommendations to both chambers for approval.

Should the final version of the bill pass with Section 1630C, the Secretary’s report will not represent the Department of Defense’s (DoD) first foray into the world of blockchain technology. In May 2017, an American technology firm announced that the Defense Advanced Research Projects Agency had awarded it a grant to develop a blockchain-integrated secure communications platform. In June, U.S. Navy Lieutenant Commander Jon McCarter predicted that the technology could “revolutionize Naval Additive Manufacturing, finance, and logistics writ large,” and announced that the Navy Innovation Advisory Council would conduct a series of blockchain experiments. And in September, the DoD’s Homeland Defense and Security Information Analysis Center was named as a partner on public-private collaboration aimed at using the technology to secure, enhance, and modernize energy grid infrastructure.