Blockchain Adoption in Government

There seems to be a popular narrative among many of the nations of the world with regard to blockchain technology and cryptocurrency. The summary of this narrative can be expressed succinctly as “blockchain is good while cryptos are bad.” A number of countries like China, India, France, and the UK that have either banned cryptocurrencies or are introducing strict crypto regulations are among some of the vocal proponents of blockchain technology. Their tough stance on the crypto market doesn’t stop them from recognizing the potential benefits that are inherent in the successful implementation of blockchain technology for government applications.

The blockchain is the technology that supports the operation of cryptocurrencies. However, that it just one of the many things that a blockchain can do. The unprecedented growth in the price of Bitcoin, as well as the success of Ethereum, Ripple, Bitcoin Cash and other cryptocurrencies, may make some think that blockchains are basically just about cryptocurrencies. The truth, however, is that blockchains can achieve more than supporting cryptocurrency operations. In fact, it was this realization that made Vitalik Buterin design a new blockchain protocol (Ethereum) that offered more robust functionality than the Bitcoin Blockchain. Ethereum is capable of supporting a multitude of decentralized applications and autonomous organizations.

It is this robust functionality of blockchain technology that has caught the eye of government all over the world. With many countries constantly competing against each other in the innovation and technological advancement theatre, no one wants to be left behind. Many governments are either studying numerous potential blockchain-based applications for affairs of state or already in the process of testing such applications if only on a small-scale. Blockchains have the potential to revolutionize the activities of government. The potential use cases of blockchain technology in government include:

  1. Healthcare
  2. National Identity Management Systems
  3. Tax and Internal Revenue Monitoring
  4. Voting
  5. Secure Banking Services etc.

Governments that are Already Adopting Blockchain Technology

Dubai

Dubai has a number of big dreams for the future: flying taxis, self-driving vehicles, and actual, literal “Robocops.” The government even has a ministry dedicated to the adoption and implementation of artificial intelligence. The city government hopes to become the first-ever blockchain-powered government by the year 2020. The main aim of the plan is to leverage the power of blockchain technology in facilitating license renewals, payment of bills, and visa applications.

Dubai is a prominent holiday destination with millions of tourists and visitors every year. A lot of manhours are dedicated to processing an estimated 100 million documents every year. By using blockchain technology for these tasks, a large percentage of those manhours can be saved which translates into huge government savings. By making the move to a paperless transaction system that is hosted entirely on the blockchain, the Dubai government could potentially save up to $1.5 billion per year.

Estonia

The government of the Eastern European nation of Estonia was one of the first to adopt blockchain technology for government use. Right from 2008, the Estonian government has actively been trying to develop sustainable blockchain-based solutions for many government activities. From the year 2012, it began to implement blockchain technology in a number of government activities.

The first area of adoption and implementation was in the country’s registry database across several sectors such as security, legislative, health, and the judiciary. The government also created ID-kaarts, a blockchain-based national identity management system. ID-kaarts has been able to reduce bureaucratic red-tape and improve the timeliness and quality of government service delivery to Estonian citizens.

Gibraltar

The government of Gibraltar stole a march of many other countries in the race to be the global hub for blockchain-based fintech companies. The Government through the Gibraltar Financial Services Commission (GFSC) issued a ruling that effectively grants licenses which allow blockchains to be used as conduits for the storage and transfer of digital assets. This license is essentially the same sort of license that banks have.

The country is also one of the first to approve a blockchain Exchange. The Gibraltar Blockchain Exchange (GBX) is a subsidiary of the country’s stock exchange framework. The GBX allows for the integration of blockchain technology with the country’s trading and settlement system.

United States

On a state level, Illinois recently launched a trial of their proposed birth registry and identification system that will be powered by blockchain technology. The aim of the project is the individualization and enhanced improvement of the security of identities. The project is as a result of the collaboration between Evernym and the Illinois state government. Evernym is a tech company that is based in Utah.

On a national level, the major interest of the US Federal Government is in the area of national security. The Pentagon and DARPA are believed to be seriously working toward adopting blockchain-based protocols in enhancing the security of the United States. Both the Pentagon and DARPA are reportedly focusing their attention on the theoretical immutability of the blockchain and how it can be applied to designing robust security protocols. Top of their agenda is the use of blockchain in sending and receiving encrypted intelligence information without the threat of interception or hacking.

These are just a few examples of some of the blockchain-based applications being pursued or implemented by various governments from around the world. While cryptocurrencies continue to be shrouded in a lot of controversies and the desire by some governments to ban them, blockchain technology continues to be an interesting proposition for many governments. Even cryptocurrencies do become extinct over time, blockchain technology is definitely here to stay and governments are most likely going to be trying to outdo one another in the hopes of creating superior blockchain applications.


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