Governments have been hesitant in the past to use blockchain technologies because they did not want any involvement with cryptocurrency. As the benefits of this technology continue to evolve, there are several ways that the public sector can help local, state/provincial, or national governments.
There are several blockchain use case projects being explored right now or already implemented in some way.
Keeping the Public Safe with Blockchain
Uganda currently uses blockchain to verify counterfeit drug distribution. Some estimates place the number of fake medicines at nearly 10% in this country. By using the information-sharing functions of this technology with its transparency, the government’s goal is to track the journey of authorized products across the supply chain.
Blockchain applications in Brazil can monitor the public bidding processes for contracts with the government. The state of Bahi uses this online solution to ensure better transparency with each deal while assuring users that it remains a secure transaction. This process makes it easier for cooperatives and agricultural groups to create agreements with workers across the state and country with funds from international investors.
Singapore looks at the idea of blockchain through the lens of cryptocurrency. They are thinking about using tokens for their national currency to eliminate cash transactions entirely. Although this process is not completely finalized as of yet, the payment systems created with this technology make it fast and affordable to transfer funds without the need to have an intermediary helping with the work.
China encourages blockchain development for information transfers across the country as well, although there are laws in place that require providers to follow local censorship rules.
No one may be using blockchain in as many schemes as the Isle of Man. Even though this government is a dependency of the British Crown, they formed a Blockchain Office and Sandbox to help businesses manage the new regulatory landscapes that this technology provides. The goal is to protect the online gaming sector from fraud, protecting lotteries and other forms of e-business by keeping risks as low as possible.
Can Blockchain Help an Economy Prevent Collapse?
In October 2018, Venezuela launched blockchain technologies with the first digital currency issued by a federal government. The goal with this effort is to provide an alternative to the Bolivar Soberano as the black market thrives in an exceptionally high inflation environment.
Then the value of the fiat currency will be pegged to that of the cryptocurrency in the hopes of reviving the economy.
Even though critics of the Venezuelan system point out that it is a Dash clone, Venezuela is still one of the savviest places in the world for collecting and using cryptocurrency.
Governments may eventually move to a global system of cryptocurrency exchanges that eliminates every local currency that we currently use. There are other promises to consider with blockchain too, such as information security and transaction transparency. As this technology continues to evolve, expect the public sector to be one of the first to explore its potential benefits.
Disclaimer: The author of this text, Robin Trehan, has an Undergraduate degree in economics, Masters in international business and finance and MBA in electronic business. Trehan is Senior VP at Deltec International www.deltecbank.com. The views, thoughts, and opinions expressed in this text are solely the views of the author, and not necessarily reflecting the views of Deltec International Group, its subsidiaries and/or employees.
About Deltec Bank
Headquartered in The Bahamas, Deltec is an independent financial services group that delivers bespoke solutions to meet clients’ unique needs. The Deltec group of companies includes Deltec Bank & Trust Limited, Deltec Fund Services Limited, and Deltec Investment Advisers Limited, Deltec Securities Ltd. and Long Cay Captive Management.