Monday 26 September 2016 3:25 pm

The US is looking to formalise policy around blockchain technology

The UK faces competition from across the pond in positioning itself as a world leader in blockchain technology.

The fledgling technology that underpins bitcoin, but has far wider implications beyond digital currencies, is hitting the agenda of the US government with the creation of a cross-party working group to look at policies surrounding the technology as well as digital currencies such as bitcoin and ethereum.

Mick Mulvaney, a Republican congressional representative for North Carolina, and Jared Polis, a Democratic congressional representative for Colorado, have formed the government group, similar to that of a UK All-Party Parliamentary Group, and are calling on more members of Congress to join.

Read more: This consulting firm has created an "editable" blockchain and people are puzzled

“Blockchain technology has the potential to revolutionise the financial services industry, the US economy, and the delivery of government services, and I am proud to be involved with this initiative on the ground floor," said Mulvaney.

Polis said: “The blockchain has boundless potential. From cryptocurrencies to supply chains to banking to property titling, blockchain-based solutions have the ability to decentralise cybersecurity and revolutionise many industries.

"It's vital for Americans, businesses, and members of Congress to learn about blockchain technology so the US can continue to secure its stance as the global leader of ingenuity"

The UK government has been favourable towards blockchain technology, recognising its potential to save billions of pounds by bringing transparency to payments in both the public and private sector.

“Any new technology creates challenges, but with the right mix of leadership, collaboration and sound governance, distributed ledgers could yield significant benefits for the UK,” said chief science advisor Sir Mark Walpole in a major report earlier this year.

The government has since started a first-of-its-kind testing of blockchain for making benefits payments and approving the first ever firm for providing public sector bodies with a blockchain platform to develop apps and services.

Meanwhile, the technology has this year hit the agenda at the Bank of England, which is investigating how distributed ledgers might impact the central bank via its newly intorduced fintech accelerator and through a review of its real-time gross settlements payment system.

City regulators are also looking at the blockchain, with the Financial Conduct Authority last week revealing that blockchain startups are part of its "sandbox" fintech accelerator

Read more: BoE: Don't expect blockchain to revolutionise finance any time soon

However, the US is increasingly challenging the UK's embrace of the technology and forward-thinking regulation and policy.

The US government is also eyeing up its own fintech sandbox scheme with a bill introduced in the House of Representatives last week seeking to formalise the efforts of several parts of government in promoting innovation.

Democratic Presidential nominee Hillary Clinton referenced blockchain in her policy for technology and innovation over the summer.

“Congressional caucuses are very important for like-minded members of congress to work together toward common policy goals,” said Jerry Brito, executive director of Coin Centre, a Washington-based bitcoin think tank with high profile backers such as venture capitalist Marc Andreessen.

“We are very excited by the formation of the Congressional Blockchain Caucus and look forward to continuing to work with its members to chart a path forward with the same type of light-touch regulation from which the early Internet benefited just a few decades ago.”