Can Governments Encourage Blockchain Innovation

Uncategorized May 15, 2017

TheBlockchainAcademy.com[1] has been a keen and consistent provider of corporate training and development to government organizations’ employees. In view of the rising blockchain technology, we can’t neglect its potential role for governments around the globe. Our research urged us to determine whether the governments are equally embracing the blockchain technology benefits just like other industries and institutions and are they willing to support the blockchain innovation in their respective economies. This article talks about this.

In order to determine the government’s support for blockchain innovation, we will have to see the benefits first, which it brings to governments. Government services sector is one of the most immediate and evident application areas for blockchain. A number of governments all over the world are already working on a range of initiatives. Let me explain some examples. In Delaware, where most of the new businesses in North America are likely to be established, the Governor Jack Markell has announced two latest blockchain initiatives, under the “Delaware is open for blockchain business”[2]. The first one is about shifting state archival records to an open distributed ledger. The second one enables any business bring incorporated in the state, keeping track of all the issued equity and the different shareholders rights on blockchain.

In Singapore, the government has adopted blockchain to prevent traders defrauding the banks. This measure was taken in view of an incident when the Standard Chartered lost around 200 million USD from a fraud in China’s Qingdao port two years back[3]. The fraudulent businesses used duplicate documents including invoices, for the same goods to get millions of dollars from the banks. Hence, Singapore Government established a system in collaboration with banks focused on avoiding invoice fraud by having a blockchain creating a unique cryptographic hash (a unique fingerprint) of each invoice. Hence, the banks will share this unique key then instead of raw data. If another banks attempts to register an invoice having identical details, an alert will instantly be generated.

Estonia has recently developed an idea of setting up an e-residency program allowing everyone in the world applying to become an e-resident of Estonia. The users get a digital card with the cryptographic key to safely sign digital documents, removing the requirement for ink signatures on paperwork[4]. An e-resident is also able to open bank accounts using country’s e-banking system, establish an Estonian company using online system of Estonia, and use their e-services. Estonia, through blockchain technology, is bringing the global residents to itself virtually, and thus having growing government revenues in the mean time. In addition, a healthcare initiative has also being taken by Estonia, using the blockchain. The medical records are tracked, and being a patient, you are able to determine who inspected your record and when. Hence, a patient has control over the data, and transparency regarding the medical care he/she is getting.

The United Kingdom[5] is also exploring the application of a blockchain for managing the grants distribution. Inspecting and controlling the grants use is quite complex in UK, and prone to potential abuse or fraud. A blockchain, accessible to all the entities involved, is indeed a safer way to solve the problem.

Sweden is planning to put real estate transactions on blockchain once the seller and buyer consent on a deal and contract is made. From that point, all parties concerned to transactions, i.e. banks, governments, brokers, sellers and buyers, are able to track the process of agreement and its progression once it is completed, letting immediate confirmation of valid transactions with premium level of integrity and security. The Republic of Georgia is working on a blockchain land registry, led by their National Agency of Public Registry. They want to show that the state is modern, transparent and corruption free[6].

With so many cases and examples, there is still a plenty of room for blockchain innovations that can be supported by the governments, especially in small towns, cities and municipalities that are the perfect starting point.  Unlike the early stage of blockchain technology, it is now quite easier for the jurisdictions to implement blockchain innovations at smaller scale first and then scale it to larger cities. It can be said that coming era is of blockchain and many of the governments will likely to support the innovations on a bigger level.



[1] TheBlockchainAcademy.com
[2] http://www.coindesk.com/delaware-government-blockchain-shares/
[3] http://www.nasdaq.com/article/how-governments-are-taking-advantage-of-blockchain-technology-cm694686
[4] http://www.forbes.com/forbes/welcome/?toURL=http://www.forbes.com/sites/laurashin/2016/05/26/how-the-blockchain-will-transform-everything-from-banking-to-government-to-our-identities/&refURL=https://www.google.com.pk/&referrer=https://www.google.com.pk/
[5] http://www.smh.com.au/business/banking-and-finance/blockchain-and-how-it-will-change-everything-20160204-gmmd6e.html
[6] http://www.reuters.com/news/technology/article/us-sweden-blockchain-idUSKCN0Z22KV

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