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Blockchain ‘beneficial but not yet transformative for public services’

29/05/19

Mark Say Managing Editor

Blockchain in its current form can provide benefits for public services but is not yet transformative or disruptive, according to a new report.

Links in metal chain

Blockchain for digital government, published by the ISA2 interoperability group in the European Commission, also proposes a framework of policy steps to exploit the potential, saying the priority is for the technology and ecosystem to become more mature.

The report is based on a series of case studies across European countries, looking at what activities can be supported by distributed ledger technology, the benefits for digital government, which ongoing services can be scaled up and what policy actions are needed.

It highlights three main functions within blockchain that can be useful in digital public services – notarisation, the provision of a shared database and workflow automation – saying the services that use the first are the most mature.

Among the other findings are that projects with a high level of maturity tend to be less complex with more centralised governance; that blockchain services already in place respond to clear business needs and have an active public sector actor and technology partner; and they are predominantly based on open source software.

In addition, blockchain is always just one layer of a more developed service that usually runs on top of a legacy-type database.

Security and efficiency

The report concludes that the main benefits for public services are increases in data security and efficiency gains, and that the technology can improve the reliability of record keeping.

In addition, blockchain has the scope to support new models for public service delivery and interactions as it can make data more consistent within an ecosystem of organisations: it can do a lot to support the principle of just needing to provide data once without repeated copying or resubmissions.

But there are barriers in the forms of legal and organisational frameworks, and the report’s authors say that so far they have not seen blockchain used for any new business models in public services. The benefits that have become apparent so far are incremental.

They say there is a need for blockchain to become more mature and to build up its ecosystem, and it will only reach its full potential if tied to the transformation of processes and organisations.

Their proposed policy framework includes efforts to support knowledge sharing between EU member states; a focus on pilot projects; the definition of standards for security, privacy, governance and interoperability; the creation of blockchain foundational components to link and connect services; and the building of a dedicated infrastructure for important uses such as taxation and customs declarations.

Image by Toni Lozano, CC BY 2.0 through flickr

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