Analysis & Opinions

Blockchain Technology: Government Use Cases

A lot has been said about the possibilities of blockchain technology helping governments and people, but are there any real use cases? Let’s go over some examples that will help you understand how blockchain technology can actually increase efficiency for governments and help citizens in many different ways.

When it comes to traceability, blockchain technology can mitigate risks by identifying and avoiding counterfeit products and supplies. In times of coronavirus, it is of paramount importance to aid through a system that can quickly generate and verify digital identities, so that assistance through cash incentives or food programs can be delivered. The Building Blocks project from the World Food Programme is a prime example of how biometrics and blockchain technology can be combined to assist people. Moreover, digital identities based on blockchain technology enable greater levels of financial inclusion, as there are billions of people that don’t have an official form of ID, nor any kind of access to the legacy financial system.

When it comes to medical supplies and food traceability, blockchain enables citizens to track the provenance of a product during each step of the supply chain. There are many projects using blockchain technology for traceability purposes, and many retailers are implementing permissioned or public blockchain technology, as well as end-to-end traceability. This not only increases consumer trust but also enables wholesalers and retailers to track and quickly identify issues in any part of the production process. 

When it comes to renewable energies, blockchain technology also enables green energy producers to access funding resources in order to deploy their projects. Traditionally, green energy producers have found many restrictions for credit access. By using blockchain technology and collective funding, green energy producers could incorporate green energy to power grids. This would enable token holders to purchase clean energy at below-the-market prices while at the same time providing governments with ways to reduce electricity production costs. Estonia and WePower are good examples of how governments can cooperate to bring renewable energies to a nation-wide electricity grid. In the same spirit, gas regulators can benefit from blockchain implementations by mitigating counterfeit risks from home gas installers. As an example, Argentina’s national gas regulator has given Gasnor, a natural gas distributor for two million residents, approval to pilot a smart contract-based certification platform. Using RSK, a smart contract platform on top of Bitcoin, both the certification and setup process of home gas installations will be much faster and reliable as each step of the process will be deployed through smart contracts. 

City-level governments can also benefit from blockchain technology by mitigating corruption and increasing transparency on the hiring process of contractors and third party suppliers. Additionally, through blockchain technology, citizens could analyze how their taxes are being used on a local level. OS City is an example of how one can make this happen.

Last but not least, central banks can also greatly benefit from blockchain technology. CBDCs would enable central banks to speed up monetary policy transmissions, though there could be concerns related to privacy, confiscation, and negative interest rates. Simply put, many people would still prefer to have paper money. However, CBCDs are just one use case of blockchain technology for central banks. Another interesting (and less controversial) option is using blockchain technology as a mechanism for central and commercial banks to increase the efficiency of internal communications. In this aspect, RSK is also contributing by working on implementation with the Central Bank of Argentina. 

So as we can see, there are multiple ways on which governments can benefit from blockchain technology: green energy incorporation to energy grids, traceability on the supply chain, and the mitigation of typical organization-related issues such as corruption, fake information, and poor auditing tools for taxpayers. 

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