Blockchain is having neither a transformative nor disruptive effect on innovation for government and public services, reveals a new report.
Blockchain for digital governments, published by the EU’s ISA² Elise Action group that focuses on interoperability solutions, finds that the technology is delivering benefits in terms of reduced bureaucracy, increased administrative efficiencies and an increase in the level of trust in public record-keeping.
The report proposes the development of a framework of policy steps and suggests ways to overcome incompatibility issues between different blockchain-based solutions to help exploit the technology’s potential.
Analysis of blockchain in action
The report analyses seven blockchain-based services developed in Europe which have active participation by public authorities at a national and local level. Such ongoing projects are bringing incremental rather than fundamental changes to the operational capacities of governments but the report authors add: “Nevertheless some of them propose clear value for citizens”.
Its main findings include that all three main blockchain functionalities of notarisation, shared database and workflow automation can be useful for different operational capacities of governments and "beneficial for interactions with the citizens and business".
It also reveals that services leveraging blockchain notarisation are relatively mature, while more disruptive solutions face challenges in implementation, mainly related to incompatibility with the current administrative processes and regulatory noncompliance.
The authors also report that projects with a higher level of maturity tend to have less stakeholder complexity and more centralised governance.
The blockchain-based services studied include:
- The Exonum land title registry project in Georgia, which was able to move quickly into a production phase as blockchain technology is used as a separate, additional technology layer that provides safety and security for digital certificates stored in the National Agency of Public Registry’s land title database.
- The Chromaway property transactions project in Sweden demonstrates the potential of blockchain-based automation in achieving efficiency gains in the settlement of multi-party transactions and reducing uncertainties between agents.
- The uPort decentralised identity project of Zug Municipality in Switzerland allows citizens to create blockchain-based identity that is independent from the government and only once attested by the authorities.
Ongoing projects are bringing incremental rather than fundamental changes to the operational capacities of governments
- The Infrachain project, which had its origins in Luxembourg, enables more rapid blockchain pilot deployment in the public and private sector through a governance framework for private nodes, a key element of blockchain technology, and compliance of the chain they produce.
- The Pension Infrastructure project in the Netherlands aims to create a pension administration system for all ecosystem partners based on blockchain.
- The Stadjerspas smart vouchers system in Groningen in the Netherlands introduces a blockchain-based redistribution system of benefits for low-income citizens. This service is operational and highlights the potential of programmable money for targeting and allocating social benefits and grants, enabled by blockchain technology.
Smart Cities World carried out its own research on the progress of blockchain last year. It revealed that more than three-fifths (63 per cent) believe governance and city administration are among the areas where blockchain could be applied for smarter cities and more than half cited citizen engagement and e-voting (52 per cent).
To read the full ISA² report, go to Blockchain for digital government: an assessment of pioneering implementations in public services.