Blockchain Is Helping Change Government Services

Recent media attention on blockchain has mostly focused on the technology's applications in the finance industry or on the numerous coins being generated on its platform. But the extent of its utility goes beyond immediate headlines. Blockchain's distributed ledger can be used to store, maintain and prosecute a wide variety of services.

Governments in particular are keen to use blockchain to streamline services. According to an IBM survey (conducted by the Economist Intelligence Unit) of 200 government leaders in 16 countries, nine in 10 government organizations plan to use the technology for "financial transaction management, asset management, contract management and regulatory compliance by 2018." (See also: Trump Administration Reiterates Support for Blockchain Technology.)

Governments around the world have established pilot projects to integrate blockchain technology into their operations. In developed countries, blockchain will help streamline government functions to make them more efficient. In emerging economies, blockchain has the potential to help governments achieve policy goals by leapfrogging intermediate layers of technology. For example, it can help in social welfare objectives by eliminating the need for credit cards or bank accounts to disburse funds to those who are unbanked .

Here are a few examples of local governments in the United States and the United Kingdom that are using blockchain to provide government services.

Illinois Blockchain Initiative

The Illinois government is conducting five focused pilots for blockchain across multiple government departments. The range of functions envisaged for the technology include record keeping (for properties and births) and an energy credit marketplace to track renewable energy credits. According to a spokesperson for the Illinois Blockchain Initiative (IBI), the agency is providing regulatory support for the projects to ensure that the use cases translate into commercial endeavors. So far, the land property deeds project has shown the most promise. It has resulted in the creation of a "digital property abstract" that consolidates land records from multiple government organizations into one place. (See also: How Blockchain Technology is Changing Real Estate.)

Delaware Blockchain Initiative

In July, the Delaware governor signed a bill amending Delaware's incorporation law. According to reports, the initiative enables a distributed ledger to store corporate records to increase speed and efficiency in incorporating companies and startups in the state. Nearly half of publicly listed companies on the markets are incorporated in Delaware. (See also: BlackRock CEO Is 'Big Believer' in Bitcoin and Blockchain.)

U.K.'s Blockchain-as-a-Service

A report released in January 2016 provided the framework for the U.K. government's foray into blockchain. According to the report, blockchain can be used to "reduce fraud, corruption, error and the cost of paper-intensive processes." Since then, the government has used blockchain to disburse student loan grants and track welfare checks. In the latter experiment, welfare claimants use an app to receive and spend their welfare checks. This enables the government to track the claimants' spending digitally. At the Payments Innovation Conference in 2016, Lord Freud, the U.K.'s Minister for Welfare Reforms, said he did not know if blockchain technology would work at scale. (See also: Dubai Becomes First Government to Launch State Cryptocurrency.)


Valerie Krutanova