All types of organizations stand to gain new benefits from blockchain technology, but governments are uniquely positioned to not only gain such benefits for themselves, but to help establish blockchain infrastructure that benefits all business and consumer sectors.
To assess the progress that government organizations are making in this area, the IBM Institute for Business Value released a report, “Building trust in government; Exploring the potential of blockchains.”
With the support of its economist intelligence unit, the institute surveyed 200 government leaders in 16 countries on their blockchain experiences and expectations.
Governments Study Blockchain
The survey found government organizations are exploring how blockchain technology can impact operations in a number of areas. Ninety percent of government organizations plan to invest in blockchain technology for regulatory compliance, financial transaction management, asset management and contract management by 2018. Seventy percent expect blockchain to significantly disrupt contract management, an area often at the intersection of the private and public sectors.
Fourteen percent of respondents, called Trailblazers, expect to have blockchains in production and at scale in 2017. They prioritize blockchains to reduce innovation roadblocks and inaccurate or incomplete information across their organizations. They seek to reduce time, cost and risk in identity management, regulatory compliance, contract management and citizens services.
The findings indicate blockchain adoption is moving faster than anticipated.
Blockchain technology provides a new approach to transparency and collaboration. When transactions are recorded or assets are registered on blockchains, transparency and privacy need not be at odds. Data can be shared anonymously when needed.
Time-stamped transactions can be verified in nearly real time, helping deter fraudulent behaviors. As transparency improves, so does trust.
Commercial blockchain applications are few at present. But 14 percent of government organizations expect to have blockchains in production and at scale in 2017.
Asia Pacific and Western Europe Trailblazers are setting the pace of adoption. North America lags behind all regions. This could reflect the complexity of coordinating blockchain applications across American jurisdictions.
About half of the Trailblazers are already investing in asset management, identity management and regulatory compliance.
Identity management determines who is transacting and who has to access to it.
Asset management records what is transacted and forms the basis for broadly-enhanced citizen services.
Regulatory compliance bridges both the public and private sectors to embed rules that automate legal requirements.
Early Collaboration Needed
Early collaboration between the government and the private sector on regulatory compliance will set the pace of blockchain adoption in all industries.
Government executives were asked to weigh the time, cost and risk benefits in nine areas. Trailblazers identified four areas they believe will yield the most benefits: identity management, citizen services, regulatory compliance and contract management. Seventy percent of all government respondents identified these same areas.
The nine areas included in the survey can be segmented into processes that improve efficiency in operations and reduce risk, and areas that support more personalized and seamless public services.
Routine processes like financial transaction management,…