The US House Armed Services Committee’s latest National Defense Authorization Act (NDAA) draft for fiscal year 2025 includes provisions for exploring blockchain technology’s role in national security. This committee-approved draft has been forwarded to the full House for consideration. The Senate Armed Services Committee has also advanced it to the Senate floor as of July 9.
Early Recognition and Implementation
Blockchain technology was first mentioned in the NDAA during fiscal year 2018, marking its initial recognition within national defence legislation. That year, the US House of Representatives introduced two blockchain-related amendments to the annual defence spending bill. These amendments tasked the Department of Defense (DoD) with exploring blockchain’s potential offensive and defensive cyber capabilities. They were to report back within 180 days.
The DoD met this requirement by producing a report that examined blockchain’s cybersecurity capabilities. This report assessed the use of blockchain by the US Government and critical infrastructure networks. It evaluated their vulnerabilities to cyber-attacks, indicating a growing interest in blockchain for cybersecurity and supply chain management.
Current Administration’s Role in Blockchain Adoption
The Senate Armed Services Committee continues to explore blockchain technology’s potential for national security and defence. The committee’s FY 2025 NDAA report includes directives related to blockchain. They recognize its potential to enhance the cryptographic integrity of defence supply chains, improve data integrity, and reduce risks of data manipulation by adversaries.
The Secretary of Defense has been instructed to investigate blockchain use cases for national security goals. The focus is on secure, transparent, accountable, and auditable data related to supply chains. A briefing on these applications is required by April 1, 2025. This briefing will cover several key areas, including:
- An assessment of the benefits and risks of implementing blockchain in supply chain management.
- An analysis of the current state of blockchain adoption within the DoD and the defence industrial base.
- A plan for pilot programs or research initiatives exploring blockchain’s use in national security applications such as supply chain management and cybersecurity.
- An analysis of blockchain research and development activities by foreign countries, particularly China and Russia.
- Organizational recommendations to foster blockchain development within the DoD, including the feasibility of creating a coordinating office or centre of excellence.
- Recommendations for legislative or regulatory actions to enhance supply chain transparency and audibility through blockchain technology.
Notable Initiatives and Strategic Steps
The Department of Defense has already been exploring blockchain applications. This effort culminated in a 2024 contract with blockchain startup Constellation. This initiative marked a significant step in utilizing blockchain to enhance the cybersecurity of backend systems. It also aimed to secure data transfer across Defense Transportation System commercial airlift partners.
Bitcoin’s Potential Role in Defense Strategy
In addition to ongoing blockchain explorations, the Department of Defense may soon consider Bitcoin as part of its strategic initiatives. Jason Lowery, author of “SoftWar: A Novel Theory on Power Projection and the National Strategic Significance of Bitcoin,” revealed that Donald Trump’s campaign administration members have sought his expertise on Bitcoin. Lowery has highlighted Bitcoin’s potential for national security and proposed the formation of a “US Hash Force” involving agencies like the Department of Energy (DoE) and the Department of Defense (DoD). He suggests that the US Cyber Command (USCYBERCOM) or the US Strategic Command (USSTRATCOM) establish a Combined Hash Force Component Command (CHFCC).
Broader Governmental Interest in Blockchain Technology
This initiative would involve collaboration with FVEYE and NATO countries to counteract digital warfare efforts by adversaries such as Russia and China. This proposal aligns with the Senate Armed Services Committee’s directive to investigate blockchain use cases for national security. It reflects a broader governmental interest in leveraging blockchain technology for defence and cybersecurity.
The recent directive from the Senate Armed Services Committee highlights a growing recognition of blockchain’s potential in military and defence applications. The committee’s proactive stance includes plans for pilot programs, assessments of blockchain’s benefits and risks for supply chain management, analyses of its current adoption in industry and by foreign countries, and feasibility and cost estimates. This evolving exploration reflects a strategic push toward leveraging blockchain technology for improved national security and defence capabilities.
Legislative and Strategic Support
While the SEC has been allowed to regulate through enforcement, the sitting government has played a notable role in advancing the adoption of blockchain technology within the defence sector. The government has laid the groundwork for integrating blockchain technology into national security and public service operations through legislative actions, strategic contracts, and cross-agency initiatives.
The Senate’s directive to explore blockchain for military applications, the adoption of military contracts with blockchain companies, and the House’s passage of the FIT 21 bill indicate legislative support for blockchain technology in this area. However, digital assets running on blockchain have a less obvious future under the Democrats than the Republicans, following the new RNC platform for 2024.
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