How are governments using blockchain technology?
Government organizations across the globe are exploring the use of blockchain technology to improve operations. The ability to record transactions on distributed ledgers offers new approaches for governments to improve transparency, prevent fraud and establish trust.
According to a recent survey conducted by IBM and the Economic Intelligence Unit, government interest in blockchain is high:
- 9 in 10 government organizations plan to invest in blockchain for use in financial transaction management, asset management, contract management and regulatory compliance by 2018
- 7 in 10 government executives predict blockchain will significantly disrupt the area of contract management
- 14 percent of government organizations expect to have blockchains in production and at scale in 2017
We take a look at how governments around the world are taking the first steps in adopting distributed ledger technology with various blockchain initiatives and pilot projects:
Georgia – Blockchain Land Registry
The government of Georgia is using blockchain to register land titles and validate property-related government transactions. A custom-designed blockchain system has been integrated into the digital records system of the National Agency of Public Registry (NAPR), and anchored to the Bitcoin blockchain through a distributed digital timestamping service. The digital timestamping service allows the government to verify and sign a document containing a citizen’s essential information and proof of ownership of property. The system will boost land title transparency, reduce the prevalence of fraud, and bring significant time and cost savings in the registration process.
UK – Blockchain-as-a-service, Welfare payments
Blockchain-as-a-service has been made available for purchase through the UK government’s Digital Marketplace. With this service, government agencies are free to experiment, build and deploy digital services based on distributed ledger technology.
In 2016, the Department for Work and Pensions began a trial to use blockchain technology. Claimants can use a mobile app to receive and spend benefit payments, and with their consent, transactions are recorded on a distributed ledger to support their financial management. UK government's chief scientific adviser Sir Mark Walport has highlighted in a report how blockchain can help in areas such as reducing benefit fraud, protecting critical infrastructure and registering assets.
Estonia – Blockchain identity management, e-voting, electronic health records
Estonia is considered to be a leading nation in the adoption of blockchain technology. Estonia citizens and e-residents are issued a cryptographically secure digital ID card powered by blockchain infrastructure on the backend, allowing access to various public services. On a blockchain platform, citizens can verify the integrity of the records held on them in government databases and control who has access to them. Earlier this year, Nasdaq successfully completed a trial in Estonia that will enable company shareholders to use a blockchain voting system.
Estonia is also adopting blockchain technology to secure the country’s 1 million health records. Every update and access to healthcare records is registered on the blockchain, preventing medical fraud and making it impossible for hackers to hide their trail. It also provides real-time alerts to attacks, enabling the government to respond to incidents immediately before large-scale damages occur.
Singapore – Blockchain interbank payments
The Monetary Authority of Singapore (MAS) has successfully completed a proof-of-concept pilot to explore the use of blockchain for interbank payments. Partnering with a consortium of financial institutions, blockchain infrastructure was used to produce a digital currency issued by MAS and methods were tested to connect bank systems through distributed ledger technology. The technology will simplify the payment process, reduce time take for transactions, enhance transparency and system resilience and reduce the cost of long term record keeping. MAS is currently developing links from Singapore to other countries to enable DLT cross-border payments, and will test blockchain technology for bond trading. MAS is looking at this project as the first step in leveraging Blockchain to verify and reconcile trade finance invoices, verify the performance of contracts, keep an audit trail and deter money laundering.
Dubai – Global Blockchain Council
Dubai has set up the Global Blockchain Council to explore current and future blockchain applications. The council currently consists of 47 members from both the public and private sector and launched seven blockchain proofs-of-concept trails, covering health records, diamond trade, title transfer, business registration, digital wills, tourism engagement and shipping.
IBM has partnered with the Dubai government to trial the use of blockchain for a trade and logistics solution. The solution transmits shipment data, allowing key stakeholders to receive real-time information about the state of goods and the status of the shipment, and replaces paper-base contracts with smart contracts.
The Crown Prince of Dubai has also announced a strategic plan that would see all government documents secured on a blockchain by 2020. The Dubai government estimates that the blockchain strategy has the potential to save 25.1 million hours of economic productivity each year.
Delaware, USA – Smart blockchain contracts, public archives
In 2016, Delaware became the first US state to embrace distributed ledger technology. Blockchain technology will be used to store contracts and other corporate data on a distributed ledger, allowing companies and agencies to store their documents in more than one location. This will keep them more secure and allow automated access by constituents, shareholders and employees. The Delaware Public Archives will be among the first to use the distributed technology to archive and encrypt government archives. The use of blockchain means the documents are can be replicated in multiple locations, providing better disaster recovery and saving the cost of off-site physical storage.