Governmental Adoption of Blockchain: Part I

Heyi Blockchain > Insights > Blockchain Trends > Governmental Adoption of Blockchain: Part I

Governmental Adoption of Blockchain: Part I

(By Johnny Hong)


Blockchain for Efficiency and Security

Numerous nations across the globe are turning to technology to help optimize how governments operate and how they interact with their citizens. Estonia’s e-Government allows e-ID holding residents to perform actions ranging from voting to filing taxes to accessing medical records.[1] The State Bank of India is experimenting with smart contracts and plans to explore more possibilities that new tech can bring.[2] Russia is exploring ways to transfer and store documents[3] as well as means to reduce or eliminate voter fraud.[4] Countries like Brazil[5] and Sweden are putting land transfers and records onto government blockchains.[6]

Traditionally many services that governments provide tend to be time consuming and convoluted. Take buying or selling land for example; If someone wants to purchase a piece of property the government will need to verify the transaction and keep track of it. The individuals involved in the land transfer will need to properly fill-out and file several forms of documentation; this might also require intermediaries such as banks and title companies. These steps are required so the government body can adequately authenticate and record the transaction between buyer and seller.

Although governments around the world are able to provide these services for their citizens, current methods still rely heavily on large amounts of manual processes and labor. With all documentation being physically stored in a central location issues like fraud or human error can still occur. Current systems, besides being inefficient and insecure, also have a lack of accessibility. According to the World Bank Group, 70% of the world’s population still lacks access to proper titling and demarcation.[7] Blockchain will make processes like land titling or transfers more streamlined and secure as well as bring them within reach of many people.


Experience of Sweden

In 2016 Sweden’s Lantmäteriet, the country’s governing body responsible for land registry, and Swedish startup Chromaway began testing the possibility of recording all land transaction onto a blockchain.[8] Members of the project estimate that over €100 million can be saved in Sweden by moving away from paper documents, along with the manpower needed to file and maintain them, and using blockchain technology.[9] The blockchain will be private so that only relevant parties, such as Sweden’s Lantmäteriet and banks, will have copies and access to records. When a land title changes hands the transaction will be processed automatically with smart contracts, without the need for intermediaries, and each party will provide a unique digital signature. This will greatly increase efficiency and accessibility. All the while the entire process will be verified each step of the way on the blockchain.[10]=

Sweden’s experiment in using blockchain in the government is progressing steadily but there are still numerous obstacles to clear. The land registry blockchain will have to integrate other bodies of the government, such as the tax authority, to be fully functional. More importantly certain laws and regulations that have existed for years will need to be changed.  According to Mats Snäll, Lantmäteriet’s official leading the project, “The interpretation of the law today is that all the contracts regarding sale, purchase and gifts of property should be stated in contract by paper and pen. In that regard, we need to change the law or change the interpretation of the law if we’re going to have digital contracts.”[11]

Blockchain has already proven itself to have great potential. It is inherently secure and removes the need for trust. With smart contracts blockchain makes transactions much more streamlined. And more importantly its decentralized nature means no one entity can have more information than others.  As time goes on blockchain will have a large effect on the world, from average individuals trading cryptocurrency for real-world assets to the way governments across the globe manage their nations.

To be continued…












[9] Pg. 17



Leave a Reply