Governments Begin to Experiment with Blockchain

July saw Reps Adam Kinzinger of Indiana and Tony Cardenas of California submit a resolution on the House floor to include “digital currencies” in a national technology policy. Across the pond, the House of Lords heard testimony from business and academic experts on how blockchain technology can transform the way government works. 
Blockchain, the technology behind the digital Bitcoin currency has been identified by the private sector, especially Fintech, as a promising disruptor technology. The distributed ledger system is secure, public, and records all transactions of their assigned assets. Fintech blockchain startups such as Ripple Labs see the technology as a way for banks to send money across borders directly – circumventing the central bank and other middlemen, meaning no six to seven days for processing. 
Indeed, the ability of blockchain to record the value of an asset, verify information as truthful, and initiate certain actions based on preset conditions has spurred a flurry of startups. Outlier Ventures has tracked nearly one thousand blockchain startups since it went live this May, an astounding 69 new blockchain enterprises a day.  According to the tracker, most blockchain innovators reside in the U.S. and the UK, while the rest are almost evenly spread throughout Europe, Asia, and South America, and Kenya, South Africa and Ghana representing Africa.  
These entrepreneurs are experimenting in applying the technology to a variety of fields.  Everledger uses it to certify diamonds, Agriledger to help co-op farmers conduct business together, and BitTunes to create a marketplace for independent musicians to self-publish and distribute rights to their material. However, one sector has until recently remained walled off to the technological disruption- government. 
Public sector agencies from the Department of Motor Vehicles to the Internal Revenue Service serve as record keepers of private information and ledgers for property transactions. Along with reducing waste and combating corruption, blockchain has the comparative advantage to carry out these tasks autonomously, immutably, and more efficiently than humans. 
The UK government is experimenting in using blockchain to track spending of welfare recipients. In The U.S. the Department of Homeland Security is awarding $600,000 grants to blockchain small businesses for “identity management and privacy protection” solutions. An extremely small step in adopting the technology and possibly in the opposite direction if implementation results in tracking citizens without a warrant.
Elsewhere governments have taken bigger steps. Estonia is using it to create a digital identity service, the Republic of Georgia is piloting a blockchain land titling program, Canada is researching implications for creating a Canadian dollar version of Bitcoin that would allow citizens to make direct transactions with the central bank, while Singapore and IBM have partnered to create a blockchain research hub for international trade and finance.

Of course governments are slow to integrate new technology, they lack the cost saving and profit incentives that spur private industry. Government, after all, is using someone else’s money. However, the transparency and accountability afforded by blockchain offers the potential to transform this relationship, bigger steps yet to come.