Trumps-presidency-good-smart-contracts

President-elect Donald Trump is a huge proponent of deregulation. Along with the assistance of a Republican-led Congress, it’s likely that several industries will see widespread change. Trump is interested in repealing regulation in the areas of energy production, healthcare, and finance – the same industries a blockchain could disrupt. As regulations are peeled back, integrating blockchain technology into existing systems may become easier.

J. Christopher Giancarlo is a current Commissioner of the Commodity Futures Trading Commission (CFTC). Despite his being the only Republican Commissioner on the CFTC, Giancarlo is slated to temporarily run the Commission from his minority position and will retain influence for months, even if Trump ends up nominating someone else to be the permanent Chairman. Giancarlo believes the U.S. will suffer if it maintains tighter regulations than other countries, so he shares a similar ideology to Trump.

Though Trump’s specific views on the blockchain are unknown, any steps he takes towards deregulating the finance industry could open the door for blockchain technology, especially with support from people like Giancarlo. Giancarlo is talking about moving past the 2010 Dodd-Frank Wall Street reform law, which was meant to promote the financial stability of the U.S. by improving accountability and increasing transparency in our finance system. He’s looking to the future of finance and sees technology as a way to revolutionize the current ecosystem. Giancarlo specifically believes in using A.I. to guide trade execution, utilizing smart contracts, and blockchain’s distributed ledger technology in general.

While it may be easier to replace our current systems if smart contracts are under looser regulation, smart contracts would have to become more malleable in order to stay compliant with the shifting laws. That’s where the concept of escape hatches could help. A smart contract escape hatch would be a mechanism through which a smart contract’s core functions could be altered. Escape hatches could be implemented for anything from reverting a contract into ‘safety mode’ when something malicious or erroneous occurs, to allowing a base function to be altered to stay compliant with changing federal regulations.

One company, Broadridge, is working on smart contract technology for the fintech sector and has a team of 30 doing contract development on Ethereum’s blockchain. They’re actually looking into the idea of escape hatches to help assuage industry fears associated with adopting such a new technology. For example, any enterprise nervous about the DAO hacking issue (in which a smart contract that hosted a distributed autonomous organization was exploited to siphon off pooled money) would likely be more comfortable if escape hatches were built into the system, as they should make such attacks much harder to pull off, if not entirely unachievable.

Broadridge is not only working on the concept of a backdoor style escape hatch where one centralized party or person has the keys to a smart contract’s logic, but also a decentralized version that would be more in line with the ideals of blockchain technology. Specifically, building on Ethereum’s blockchain offers the added benefit of a time-tested platform. The more people that develop on a platform, the more bugs they find and the safer the whole ecosystem becomes.

It’s uncertain what the future of the finance industry will be and there are many strong opinions for and against deregulation, but it appears probable that blockchain technology has a real chance at integration. So if something like repealing the Dodd-Frank Act might reduce transparency in finance, blockchain technology would certainly be able to increase transparency while making transactions speedier and more efficient.

Jim Manning lives in Los Angeles and has been writing for websites for over five years, with a particular interest in tech and science. His interest in blockchain technology and cryptocurrency stems from his belief that it is the way of the future. Jim is a guest writer for ETHNews. His views and opinions do not necessarily constitute the views and opinions of ETHNews.
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