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Leveraging Blockchain to Transform the Public Sector

In essence, Blockchain is a type of distributed ledger in which transactions are sequentially grouped into blocks.

Blockchain experiments in the global sector are accelerating on a global scale. From the scenario of none about three years ago, today, more than 20 countries are running tests, pilots, and trails to examine the broad utility of the blockchain architecture as a basis for developing individual blockchain applications for internal use and government service provision and procurement.

Blockchain, no doubt, has the immense potential to modernize the public sector and the government. A blockchain-enabled public sector provides the following advantages.

  • Reduction in high costs and labor-intensive processes.
  • Secure storage of business and citizen data.
  • Reduction in corruption and abuse.
  • Increasing trust in online civil systems and the government.

How Blockchain Helps Transform the Public Sector

There are many prominent ways in which blockchain transforms the public sector. Some of the notable use cases of blockchain in the public sector are:

1. Digital certificates

This is seeing a lot of traction in the public sector. Every day, citizens make use of digital certificates, which are digital equivalents of existing identity cards or electronic cards. These are used when interacting with banking websites, e-government portals, government agencies, and websites. Thanks to the advancements in blockchain technology, it is now possible to store birth certificates, academic certificates, and other important certificates digitally and access them anytime securely and independently from anywhere across the globe. Many organizations are now embracing blockchain technology to store various kinds of certificates.

The digital certificates network will make use of a public blockchain with third parties, the issuing institution, government, and the citizens as nodes. Instead of the actual certificate, the hash of the certificate and the details of the citizen will be stored on the blockchain in such a manner that it cannot be tampered with. A well-structured digital certificate will be signed by the certificate issuer, and the hash will be stored in a blockchain transaction. The output of this transaction will be provided to the corresponding citizen, and he/she will be able to provide ownership of the certificate at any time.

2. Customs Duty Payment

The custom duty payment process involves multiple stakeholders such as banks, custom house agents, importers, exporters, and the Customs department. The goods that are shipped by an exporter reach the Customs department, and after completing all the clearances and payments made by the importer to the Customs, the Customs department will release the goods to the importer. This process is time-consuming and manual and hence may lead to operational delays and inefficiencies.

If customs duty payment processing is based on blockchain technology, it will enable real-time tracking and transparency of the Customs clearance processing to all relevant stakeholders such as the clearinghouse agent, bank, importer, and the Customs department. This will result in better inventory management as it will help facilitate better management of time, space, and resources by the Customs department. It will also reduce the cost of operation as an integrated system on the blockchain network provides for reduced operational challenges and a higher trust among value chain players.

3. Smart Cities

A smart city makes use of information technology and data to integrate and manage social, physical, and business infrastructures to streamline services to its inhabitants, thereby ensuring optimal and efficient utilization of available resources. By combining technologies such as blockchain, IoT, and cloud computing, the public sector will be able to deliver innovative solutions and services to citizens and local municipalities.

4. Asset Registers

This is another popular area in which blockchain is applied. Some of the popular applications are vehicle, property, and other documents such as contracts. In recent times, as a lot of cases of fraud in property transactions, using blockchain in property or land registration has become prominent. Apart from providing a trusted mechanism of storing and transferring data, it provides transparency across the system. Several states and countries such as Ghana, Sweden, and Georgia in the USA are exploring blockchain-based solutions to digitize registration of land and property transactions. State governments, like that of Georgia, in the USA, are using blockchain technology to validate property-related government transactions and register land titles. Using blockchain in the public sector will enhance land title transparency, bring significant time and cost savings in the registration process, and reduce the prevalence of fraud.

5. Tracking Vaccinations

Recording vaccination data on the blockchain will help insurance companies, medical providers, and schools to validate transactions quickly. This process will trigger corresponding micropayments and delegate access to benefits based on medical status.

Conclusion

Policymakers today find it worthwhile to explore the range of possibilities offered by blockchain, thanks to its transformative potential and broad applicability. Adopting a blockchain approach will help prevent and reduce fraud and increase the efficiency of transaction processing. As the public sector is constantly facing public pressure for accountability, transparency, and improved performance, the public sector is turning to blockchain as a solution for some of their most vexing challenges. Using blockchain in the public sector will act as the foundation for a 21st-century, modern operating system.

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