Large tech companies are experiencing their lowest trust ratings in years. Hence, the United States Congress is reportedly considering implementing comprehensive privacy data regulations. However, the rise of blockchain technology and Web3 means that these proposals do not reflect the changing time but risk disrupting the blockchain ecosystem.
Concerns Over Upcoming Privacy Legislation
Per reports, the 118th Congress has had several meetings on data privacy. Experts noted that it is important for lawmakers to consider how their proposals would impact innovative technologies like blockchain.
Lawmakers should do away with their one-in-all proposals to embrace a time-tested and sectoral approach to data protection. Many data-based privacy bills litter the surroundings of Capitol Hill.
But currently, the American Data Privacy Protection Act (ADPPA) is the one taking the spotlight. According to sources familiar with its content, the bill offers guidelines on how firms collect, process, and transfer user data.
It also requires the company to lessen its data collection and grant consumers the right to decline the collection of their data, among others. Moreover, ADPPA is well-designed legislation that aims to give consumers control over their information.
It also indicates most US Congress members’ desire to prevent a sub-standard approach to data collection. The past is considered a preface for data privacy because similar approaches by Congress to implement comprehensive data privacy have failed to outplay disruptive innovations.
According to data experts, blockchain technology is a developing innovation, and attempts to follow the previous course of action will meet a brick wall. An example is the European Union General Data Privacy Regulation (GDPR), which has reportedly affected innovations and investment in the traditional tech industries.
Additionally, the GDPR is incompatible with blockchain technology, indicating why the current approach by Congress is another worthless venture.
A Suitable Alternative
Meanwhile, analysts stated that there is another approach that Congress should consider implementing to ensure the implementation of privacy data law. They argue that this method is better than the patchwork method.
According to these analysts, Congress must break down the comprehensive data privacy proposal into segments to mirror industry-specific regulations. For instance, lawmakers would release data privacy guidelines targeting e-commerce websites and social media platforms.
They argue this would be more effective than the one-size-fits-all approach. Going by historical experiences, the United States has implemented this data privacy approach for some industries.
The US has traditionally developed data privacy rules tailored to specific sectors and has served their intended purposes. Using a sectoral approach to data privacy regulations, Congress can create guidelines tailored to different spaces by harmonizing blockchain technology.
Meanwhile, analysts noted that if Congress believes the sectoral approach is wrong, they risk disrupting blockchain technology’s expansion.