How Governments Are Taking Advantage of Blockchain Technology

When thinking of the blockchain, some words that best define it are: secure, speedy, cost-efficient and decentralized. All of these qualities together are making it hard to not to be on the blockchain. Many governments around the globe are trying to understand and apply the blockchain technology to replace their existing structures.

Here are some developments which highlight blockchain-related initiatives and projects by governments of some prominent nations.

Dubai

Dubai has been at the forefront of embracing blockchain. Dubai’s Crown Prince recently launched the “Dubai Blockchain Strategy” with the objective to achieve efficiency in government work, create new specialized sectors, and achieve global leadership. They are also making efforts to bring all government documents on the blockchain by the year 2020. This is a big announcement.

Recently, UAE headquartered international cyber security firm DarkMatter announced the launch of its blockchain advisory services and forthcoming blockchain Software Development Kit (SDK). Darkmatter works with governments and enterprises to identify the possible use-case scenario for the application of blockchain.

In another exciting development, Emirates NBD Bank successfully conducted a pilot transaction in remittances and international trade finance on blockchain in collaboration with India’s largest bank by assets, ICICI Bank. Dubai’s government has a 55.76% ownership in the Emirates NBD Bank.

Russia

The Federal Antimonopoly Service of the Russian Federation and Sberbank are working towards a new initiative which relates to application of blockchain technology. The pilot project, dubbed Digital Ecosystem, has been launched “to study the possibilities of distributed document storage, which may increase the speed, reliability and quality of interaction during document exchange.”

The decentralizing approach of blockchain trims costs involved in the maintenance of data processing centers and equipment protection. Companies such as Aeroflot, Russian Coal and ForteInvest are a part of this project.

In August 2016, Gazeta.ru reported that Moscow’s Deputy Head of the Department of Information Technologies (DIT) said that the agency was ready test the technology in various cases, especially the integration into Active Citizen, which is a government app to make citizens more involved in the decision-making process. Russia’s stance on blockchain shows its progression from the time it was looking to ban cryptocurrencies.

China

China is leveraging the tech for its huge social security systems. The National Council for Social Security Fund had around $284.5 billion as assets under management at the end of 2015. Wang Zhongmin, vice-chairman of the National Council for Social Security Fund said, "There's no doubt that blockchain technology will be used in the social security system because of its valuable applications in the investment and management of social security funds.” Blockchain can enable transactions freely at lower costs.

United States

Although there isn’t official word from the White House, small yet significant case scenarios showcase that administrators are keenly following and experimenting with the distributed ledger technology. In May, the President’s Council of Advisors on Science and Technology met the representatives from blockchain consortium R3CEV and few others to get an overview of the technology. The presentation by R3’s MD is on the White House website.

In June, the Department of Homeland Security (DHS) awarded approximately $100,000 each to 29 small businesses through DHS S&T’s Small Business Innovation Research (SBIR) program. This covered six companies working the applicability of blockchain technology to identity management and privacy protection and blockchain applications for homeland security analytics.

Earlier in April this year, the U.S. Defense Advanced Research Project Agency (DARPA) had asked for submission of proposals, which showed its intent to use blockchain for creating a ‘secure messaging platform.’ The notice read, objective is to “create a secure messaging and transaction platform that separates the message creation, from the transfer (transport) and reception of the message using a decentralized messaging backbone to allow anyone anywhere the ability to send a secure message or conduct other transactions across multiple channels traceable in a decentralized ledger.”

Singapore

Singapore being the financial capital of Asia understands the significance of financial technology and is open to embrace the changes which are underway. Dr. Vivian Balakrishnan, Minister for Foreign Affairs and Minister-in-Charge of the Smart Nation Initiative had pointed out that, “The financial services sector, could potentially be disrupted by the likes of bitcoin and blockchain technology. To encourage innovation, the government has created a regulatory sandbox for fintech.”

The first blockchain innovation center was established in July in partnership between IBM and the Economic Development Board of Singapore. The collaboration included the Monetary Authority of Singapore, the Port of Singapore Authority and the Info-communications Development Authority to work together to create new applications in finance and trade.

Australia

A recent foundation paper by the National Transport Commission which looks into the Land Transport Regulation 2040 suggests the use of blockchain technology to overhaul the existing transport system. It reads, “According to some experts, it is only a matter of time before blockchain technology is used in peer-to-peer and machine-to-machine transactions where high levels of trust and verified ability is required. It could also be used in transport system safety technologies.”

Final Word

Governments are exploring, innovating and adopting the benefits of distributed ledger technology and rewriting the rules of data management and the way common citizens deal with governments and its facilities. The thought process and innovation in this regard has taken over the smaller economies like Ghana, Estonia, Georgia as well and is gaining momentum in prominent ones like the United Kingdom.

The world over, this technology has opened the doors for budding engineering, software and finance professionals to look at things in a different manner and apply their minds to bring out new cutting edge technologies and idea. The possibilities are exciting and endless.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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