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Top 5 Applications of Blockchain in the Government Sector

May 12th 2023 | 05:42 | 3 min read

At first glance, blockchain and government institutions don’t seem to complement each other. The working mechanism of both blockchain and government institutions are the opposite.

Blockchain works on the principles of decentralization. The foundation of blockchain technology is to eliminate the role of governing authority or centralized control.

While government departments are highly centralized bodies. All government institutions work on a set of rules under the authority of the government in power.

However, with changing times, governments have realized the need for a secure, efficient, and cost-effective technological solution. Government departments are in dire need of a citizen-centric tech system to simplify their various processes.

According to IBM’s 2017 study, Building Trust in Governments, 90% of government organizations are planning to invest in blockchain.

Blockchain offers the government an effective high-tech medium to fairly deliver its services, communicate with its citizens, and build trust.

So, what are the areas where the government can implement blockchain technology? And how is blockchain helping government departments become more efficient?

This article will explore the applications of blockchain in government and its benefits.


5 Applications of Blockchain In Government

Blockchain In Government For Foreign Aid

Countries often help one another in the event of war, famine, climate disasters, and other emergencies. The help is sent in the form of financial funding, food resources, medical supplies, weapons and even militaries.

However, in the case where a country is putting up a petition for aid on the international level, the process is tiresome. The government officer has to draft hundreds of documents and get multiple signatures and approvals at every stage. Moreover, he has to make budgets, create a checklist, and collaborate with third parties, other governments, and international organizations to request the sanction of the aid. By the time the foreign aid reaches his country, the condition becomes worse.

Blockchain can help simplify foreign aid requests, sanctions, and approvals. It removes the middlemen and third parties to make the process less time-consuming and more efficient.

With the help of smart contracts, governments can automate funding schemes and aid programs.

The United Nations World Food Program built a platform called Building Blocks on the Ethereum blockchain. The UN used the platform for the first time to send cryptocurrency-based food vouchers to refugees in Pakistan. The platform has also sent approximately $325 million to refugees in Bangladesh and Jordan.

Ministry of Foreign Affairs Denmark partnered with a crypto platform, Coinify to send foreign aid. The country eliminates the involvement of third-party organizations, banks, donors and financial firms to send funds to the countries. The Denmark government saves time, money and effort by directly sending foreign aid in cryptocurrencies.


Simplify Government Processes with Smart Contracts

Government departments are burdened with lengthy paperwork, complex approval systems, and corrupt third parties. Moreover, the departments heavily rely on physical contracts for tenders, patent registration, licenses, and other everyday work.

Smart contracts built on blockchain can automate government processes and eliminate the need for third parties and lengthy paperwork. By simplifying complex processes, smart contracts make the government system efficient, cost-effective, transparent, and reliable.

Governments are already saving hours of paperwork and millions of dollars with blockchain implementation.

The US General Services Administration has launched its new IT program. Under its IT initiative, the government has implemented blockchain DLT technology into its federal government infrastructure for everyday use. The department is now looking to adopt smart contracts for patents, trademarks and IT purposes, as well as foreign aid delivery.

Another country, UAE leaves other countries behind in adopting blockchain technology. Dubai has shifted its judicial system to blockchain. The platform called “Court of Blockchain” uses smart contracts to make its legal system efficient and transparent.


Blockchain In Healthcare

Although electronic medical records and online access to patient data can be achieved without blockchain technology, the issue of data reliability remains unresolved. However, by using blockchain technology, unauthorized access or modification of citizens’ data is impossible, as any such actions are recorded in the system.

In 2016, Prescrypt collaborated with SNS Bank NV and Deloitte in Holland to develop a blockchain application that simplifies and enhances services for chronically ill patients. The concept involves using an online authentication service called iDIN, which is provided by banks, to connect to the blockchain. iDIN offers the same level of security and convenience as Internet banking.

BurstIQ is a platform designed for managing vast amounts of patient information. The company complies with HIPAA regulations and utilizes blockchain technology to ensure the secure storage, sale, sharing, or licensing of data. Additionally, BurstIQ’s platform provides precise and current information regarding a patient’s health and healthcare-related activities.


Blockchain In Land Registration

Land ownership in developing countries is often inadequately documented, which can prevent landlords from selling or obtaining mortgage loans for their property, among other transactions.

Fortunately, blockchain technology offers a solution by streamlining operational processes and reducing transaction time, which can take several months.

Additionally, blockchain technology reduces the risk of fraud and errors in documents and transactions, such as transfers of rights.

In Ghana, the Bitland project, based on the Graphene platform, received official permission from the Ghanaian government in early 2016 to establish a land registry using the Bitshares blockchain. The project released CADASTRAL base tokens, which enable the registration of land rights, resolution of contentious land tenure issues, and buying and selling of land.


Blockchain In Government For Data Security

Government has to store and manage trillions of tax documents, birth certificates, licenses, passports and other documents. Storing these documents on centralized servers makes the personal information of millions of people prone to risks.

Shields Health Care Group, a healthcare provider based in Massachusetts, experienced a significant data breach in 2022 that impacted around two million individuals. The breach led to the theft of identities, billing information, and medical records. Unfortunately, identity thieves often target vulnerable government and large bank computer systems to gain access to personal information such as passports, social security, and banking details.

Blockchain stores data on tamper-proof distributed ledger technology. This makes data on the blockchain impossible to hack and alter. Therefore, offering data immutability and helping the government to securely store and manage all its public and private data.

Australia has partnered with IBM to become one of the leading countries in the world in integrating blockchain into its record-keeping process. The country is utilizing this technology to merge its passport and birth certificate databases into one blockchain-based platform. Both Australian government officials and IBM believe that blockchain provides a superior level of data integrity and security for record-keeping purposes.


Benefits of Blockchain In Government

A blockchain-based government infrastructure can streamline, simplify and automate government processes. It will help to eliminate corrupt middlemen and third parties to make government systems more efficient, faster and cost-effective. Moreover, blockchain can assist government departments to protect and manage citizen data as well as sensitive government data. Further, it will also enable government organizations to seamlessly collaborate with other institutions to work better.

The benefits of blockchain in the government sector are:

  • Enhance the efficiency and effectiveness of government processes
  • Streamline and automate government processes
  • Reduce the involvement of third parties
  • Reduce corruption in the government departments
  • Simplify complex everyday government work
  • Securely store sensitive citizen and government data
  • Efficiently deliver government welfare schemes to its citizens
  • Reduce government costs with advanced smart contract automation
  • Establish citizen trust in the government systems
  • Effectively collaborate with institutions and organizations

Blockchain in government will lay the foundation of a transparent and fair infrastructure that will boost the trust of its citizens in the system. With blockchain technology, governments can remodel their working mechanism and target citizen welfare in every sector.

Contact our blockchain experts to build customized blockchain solutions to enhance the efficiency and performance of your institution’s infrastructure.

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