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The Impact of Blockchain Technology on Armed Services
The U.S. House Armed Services Committee’s latest draft of the National Defense Authorization Act (NDAA) for Fiscal Year 2025 includes important provisions to explore the role of blockchain technology in national security and defense applications. A draft approved by the committee has been sent to the full House for consideration and the Senate Armed Services Committee Advanced bring it to the Senate chamber July 9th.
He claims,
“The committee recognizes the potential uses of blockchain technology for broader national security purposes across the defense landscape.”
The first mention of blockchain technology in the NDAA occurred in fiscal year 2018, denoting the initial recognition of this technology within national defense legislation. During that year, the U.S. House of Representatives added two amendments related to blockchain to the annual defense spending bill. These changes has directed the Department of Defense (DoD) to explore the potential offensive and defensive cyber capabilities of blockchain technology and to report back within 180 days.
The DoD met this requirement by producing a report examining blockchain’s cybersecurity capabilities, assessing its use by U.S. government and critical infrastructure networks, and assessing its vulnerabilities to cyberattacks. This indicated growing government interest in applying blockchain technology for purposes such as cybersecurity and supply chain management.
Blockchain for Defense
This month, the Senate Armed Services Committee continued to explore the potential of blockchain technology for national security and defense applications. The committee NDAA FY 2025 Report includes guidelines related to blockchain, recognizing its potential to improve the cryptographic integrity of defense supply chains, enhance data integrity, and reduce the risks of data manipulation by adversaries.
The Secretary of Defense has been directed to examine blockchain use cases for national security purposes, with a focus on secure, transparent, accountable, and verifiable supply chain data. A briefing on these applications is required by April 1, 2025.
This briefing aims to specifically cover several key areas:
- 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 Department of Defense and the defense industrial base.
- A plan for pilot programs or research initiatives that explore the use of blockchain in national security applications, such as supply chain management and cybersecurity.
- An analysis of blockchain research and development activities by foreign countries, especially China and Russia.
- Organizational recommendations to advance blockchain development within the Department of Defense, including the feasibility of creating a coordination office or center of excellence.
- Recommendations for legislative or regulatory actions to improve supply chain transparency and audibility through blockchain technology.
The Department of Defense had already been explore the blockchain applications, culminating in a 2024 contract with a blockchain startup ConstellationThis initiative marked a significant step in using blockchain to improve the cybersecurity of backend systems and secure data transfers between Defense Transportation System commercial air transport partners.
Bitcoin for crime
In addition to the continued exploration of blockchain applications, the Department of Defense may soon consider Bitcoin as part of its strategic initiativesJason Lowery, author of “SoftWar: A Novel Theory on Power Projection and the National Strategic Significance of Bitcoin,” revealed that members of Donald Trump’s campaign administration have asked for his expertise on Bitcoin.
Lowery highlighted Bitcoin’s potential for national security and proposed the formation of a “US Hash Force” involving agencies such as the Department of Energy (DoE) and the Department of Defense (DoD). Specifically, he suggested that the US Cyber Command (USCYBERCOM) or US Strategic Command (USSTRATCOM) establish a Combined Hash Force Component Command (CHFCC).
This initiative would involve working with FVEYE and NATO countries to counter digital warfare efforts by adversaries such as Russia and China. This proposal is in line with the Senate Armed Services Committee’s directive to investigate blockchain use cases for national security, reflecting broader government interest in leveraging blockchain technology for defense and cybersecurity.
Current Role of the Administration in Blockchain Adoption in the Military
The Senate Armed Services Committee’s recent directive highlights a growing recognition of blockchain’s potential in military and defense 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 estimates of feasibility and costs. This evolving exploration reflects a strategic push to leverage blockchain technology to enhance national security and defense capabilities.
While the SEC was allowed to regulate through the application of the lawThe current government has played a significant role in advancing the adoption of blockchain technology in the defense sector. Through legislative actions, strategic contracts, and interagency initiatives, the government has laid the groundwork for integrating blockchain technology into national security and public service operations.
Senate Directive to Explore Blockchain for Military Applications, Adopting Military Contracts with Blockchain Companies, and House Directive ride of the FIT 21 bill indicate legislative support for blockchain technology in this area. However, digital assets that run on blockchain have a less obvious future under Democrats than under Republicans after the new RNC platform for 2024.