Today, Representative Maria Elvira Salazar (R-FL-27) was joined by Representatives Ro Khanna (D-CA-17) and Young Kim (R-CA-39) to introduce the bipartisan Blockchain Solutions for Small Businesses Act, a bill to improve the Small Business Administration's (SBA) operational efficiency using blockchain technology. At the time of its introduction, Rep. Salazar's bill is the most widely cosponsored legislation supporting blockchain technologies ever introduced in the U.S. Congress.
During the COVID-19 pandemic, the SBA was given an increased role to serve small businesses across the country. Since then, it has become clear that the Agency's system is outdated and in need of operational improvements. To address the Agency's needs, this bill studies how to best integrate blockchain technology into the SBA to maximize their efficiency and better serve small business owners across the country.
In November of 2021, Congresswoman Salazar addressed the SBA's operational shortcomings directly with SBA Administrator Isabella Guzman during a House Small Business Committee Hearing, where Administrator Guzman acknowledged that the Agency was not operating at maximum efficiency.
"One of the biggest complaints from my constituents is the lack of accessibility and transparency throughout their experiences with the SBA. We need to make sure the agency is embracing emerging technologies that can provide results to small business owners more efficiently," said Congresswoman Maria Elvira Salazar. "The Blockchain Solutions for Small Business Act will streamline internal systems, provide much-needed operational improvements, and reduce bureaucratic backlogs. The SBA is essential to helping small business owners, especially in the middle of the COVID-19 pandemic. It's imperative that Congress does everything in its power to allow it to properly serve our communities."
"Blockchain technology has the potential to help digitize SBA's services and transition the agency to a more efficient system to help small businesses recover from the pandemic and compete in the global economy," said Congressman Ro Khanna. "This new technology can also be used to promote transparency and protect against sophisticated cybersecurity threats. It's critical that Congress does everything to see what it can do to streamline assistance to small businesses, which are vital to our local economies and the culture of our communities."
"America's small business owners and entrepreneurs must be able to rely on the Small Business Administration to provide efficient, reliable and secure services to assist them," said Congresswoman Young Kim. "As technology and cyber threats evolve, the SBA must stay one step ahead to keep our small businesses safe and foster their growth. I'm proud to join Rep. Salazar to help bring the SBA into the 21st century through the adoption of blockchain and other emerging technologies."
Utilizing blockchain technology would help the SBA:
- increase access to capital. Using blockchain technology, the SBA could digitize lending contracts in a secure environment which would enable lenders and loan officers to validate transactions, verify legitimacy of parties, and perform all loan administrative tasks in a fraction of the time as the traditional lending process.
- improve agency efficiency by using secure automation. Blockchain technology would allow loan documents to be quickly verified and made accessible to any SBA employee, eliminating the need for small business owners to re-upload or re-explain their circumstances each time they make contact with the SBA.
- decrease fraud. Blockchain technology, though new, is one of the most secure technologies that an agency can utilize to protect taxpayer dollars. By using a blockchain, the SBA can ensure that all transactions are immutable and any alteration on data is documented. This additional verification process and oversight of blockchain technology would cut down on SBA loan fraud, saving taxpayers millions of dollars.
- improve agency transparency. Each transaction on the blockchain is time-stamped and includes the encrypted signature of the executor of the transaction for all participants to see, while simultaneously protecting Personally Identifiable Information (PII). This enables information symmetry between borrowers and lenders, increasing certainty and security in lending institutions that small businesses rely on.
"Small businesses are the lifeblood of the United States economy, and it is critical that their role is preserved and protected by laws and regulations. By studying how blockchain networks can bring increased efficiency and security to small business operations, Representative Maria Salazar’s Blockchain Solutions for Small Businesses Act will ensure small businesses are able to keep stride with the transformative technological developments that are being incorporated into the business models of some of the largest financial institutions in the country. The Blockchain Association applauds Representative Salazar for her efforts to ensure small businesses are included in this technological revolution. — Kristin Smith, Executive Director of the Blockchain Association
"The Chamber of Digital Commerce welcomes legislation that further encourages adoption and greater use of blockchain technologies. Disruptive innovations like blockchain enable small and independent businesses to compete in the global marketplace with ease and security and to better serve their business partners and customers. We thank Representative Salazar for her leadership in supporting these innovations, but also in encouraging policymakers to better understand blockchain technology and its many applications for businesses of all sizes." — The Chamber of Digital Commerce
"Blockchain is a powerful technology that can help increase efficiency, security, and trust in digital transactions. We're delighted to see this legislation advance the prospects for using next-generation digital ledger technology in the SBA." — Daniel Castro, Vice President of the Information Technology and Innovation Foundation
Bill cosponsors at the time of introduction:
- Rep. Ro Khanna (D-CA-17)*
- Rep. Young Kim (R-CA-39)*
- Rep. Darren Soto (D-FL-9)
- Rep. Ted Budd (R-NC-13)
- Rep. Kat Cammack (R-FL-3)
- Rep. Byron Donalds (R-FL-19)
- Rep. Michael Waltz (R-FL-6)
- Rep. Claudia Tenney (R-NY 22)
- Rep. Tom Emmer (R-MN-6)
- Rep. John Rose (R-TN-6)
- Rep. William Timmons (R-SC-4)
- Rep. Warren Davidson (R-OH-8)
- Rep. Ralph Norman (R-SC-5)
- Rep. Austin Scott (R-GA-8)
- Rep. Bryan Steil (R-WI-1)
- Rep. Greg Steube (R-FL-17)
- Rep. Madison Cawthorn (R-NC-11)
- Rep. Ann Wagner (R-MO-02)
Read the full bill text here.
Original source can be found here.
