Blockchain for Digital Government

Blockchain for Digital Government

In less than ten years from its advent in 2008, the concept of distributed ledgers has entered into mainstream research and policy agendas. Enthusiastic reception, fuelled by the success of Bitcoin and the explosion of potential use cases created high, if not hyped, expectations with respect to the transformative role of blockchain for the industry and the public sector. Growing experimentation with distributed ledgers and the emergence of the first operational implementations provide an opportunity to go beyond hype and speculation based on theoretical use cases. The new JRC report looks at the ongoing exploration of blockchain technology by governments.

 

The study analyses 7 blockchain-based services developed in Europe, with an active participation of public authorities from national and local level. The list of analysed projects includes Exonum land title registry, Blockcerts academic credentials, Chromaway property transactions, uPort decentralised identity, Infrachain governance framework, Pension Infrastructure and Stadjerspas smart vouchers. Each case-study is analysed with a structured multi-layer framework which covers institutional, functional, technical and economic aspects of a deployed service. In addition, a potential of each blockchain-based service for the scale-up to the EU level is considered.

 

Finally, the report analyses the potential use of blockchain technology against VAT missing trader intra-community fraud.

Smart Contract Workflow for VAT Payments

The study acknowledges that blockchain technology can reduce bureaucracy, increase the efficiency of administrative processes and increase the level of trust in public record keeping. However blockchain has not yet demonstrated to be either transformative or even disruptive innovation for governments as it is sometimes portrayed. Ongoing projects bring incremental rather than fundamental changes to the operational capacities of governments. Nevertheless some of them propose clear value for citizens.

 

Technological and ecosystem maturity of distributed ledgers have to increase in order to unlock the transformative power of blockchain. Policy agenda should focus on removing non-technological barriers, such as incompatibility between blockchain-based solutions and existing legal and organisational frameworks. This principal policy goal cannot be achieved by adapting technology to legacy systems. It requires using the transformative power of blockchain to be used to create new processes, organisations, structures and standards. Hence, policy support should stimulate more experimentation with both the technology and new administrative processes that need to be re-engineered for blockchain.

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