Charleston real estate investor Dennis Fassuliotis has been urging elected state leaders to set regulatory guidelines for new technologies that are rapidly changing the way financial institutions operate.
He and eight other entrepreneurs and advisors in 2018 started a grassroots organization that last year became the South Carolina Emerging Technology Association (SCETA). Over time, they have been educating state leaders and members of the S.C. General Assembly about the potential of blockchain technology, digital assets and cryptocurrencies, all of which are used by governments and consumers in other states and countries.
The association scored a big win last month when South Carolina lawmakers authorized the state treasurer to spend $500,000 to study digital currency literacy.
State Treasurer Curtis Loftis Jr. plans to address the association’s South Carolina Blockchain Conference on Oct. 5 to Oct. 7 at the Indigo Inn in Mount Pleasant. Hester M. Peirce, a member of the U.S. Security Exchange Commission, is also scheduled to attend the conference.
Blockchain technology is a computer-based, ongoing permanent ledger that records transactions and ensures each one is authentic. A digital asset is anything that has a value that can be stored on the blockchain as unique digital data such as a book, music, videos and photographs.
During the October blockchain conference, presenters will discuss Bitcoin as well as business and governmental uses of blockchain technology.
“The State Treasurer’s Office expects to provide valuable assistance and guidance to both government agencies and the citizens to help them better understand how a fully digital economy can be transformative to our state,” Loftis said in a prepared statement.
SCETA is the first nonprofit organization in the state to promote blockchain technology, digital assets and cryptocurrencies. On the blockchain, the digital medium of exchange is bitcoin, a cryptocurrency with a value that fluctuates daily and is not insured by the federal government. The blockchain technology uses bitcoin or another digital currency for transactions, including paying local taxes or making international transactions to save money and time.
Blockchain technology is said to have near unlimited uses. It can store and verify a transaction and prevent the counterfeiting of items such as car parts, artwork, clothing and other goods by placing a chip or digital token in the product, said Doug Morton, a Mount Pleasant computer consultant and a SCETA director.
Some everyday uses could include storing and transferring drivers’ license information between two state governments to eliminate the need to apply for a new license in another state. The blockchain also can instantaneously transfer money to an individual or company without using a bank, which charges a fee or sets a transaction limit.
Craig Ratliff, SCETA’s chief financial officer and a senior project manager with a Charleston bank, said if blockchain usage increases it will force banks and financial institutions to adopt the technology. Blockchain can make financial transactions safer and more efficient, he added.
Is the blockchain vulnerable to hacking? “The Bitcoin blockchain has never been hacked,” Fassuliotis said. “So much of what we hear about hacking predominantly involves the exchanges that trade multiple digital currencies.”
Fassuliotis said part of SCETA’s vision is to educate young people about the new technologies which “will garner attention from the next generation of technology companies and should attract those companies to South Carolina [to] inspire innovation within the state.”
A government agency storing personal information in a database or blockchain sounds like an Orwellian concept in which the government monitors movement and financial transactions.
Fassuliotis acknowledges China uses the technology to track its citizens.
“They have social credit scores and facial recognition where they have an updated record of who you are and what you purchased,” he said. “They have also banned Bitcoin and introduced a Digital Yuan at the recent Winter Olympics.”
In the United States, there is discussion of developing a Digital Dollar as a Central Bank Digital Currency. Federal legislation has been introduced to study its use that would promote more efficiency between banks, but additional legislation has been introduced to curb its use as a method to monitor individual spending.
“The same technologies that are already being used by authoritarian regimes to control their population can be used to increase freedoms,” Fassuliotis added.
At least 13 states and four countries have approved or are studying block chain- and cryptocurrency-related proposals, according to a 14-page SCETA study. Wyoming has emerged as the most crypto-friendly place in the country and has enacted more than 20 pieces of legislation to attract blockchain and cryptocurrency businesses to the state, according to the study.
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