How Can Blockchain Be Used in Government?


Over the last few decades, there have been a huge amount of inventions in technological fields. It is rooted in our entire system so much so that it is almost impossible to imagine a life without technology these days. But, with the advancement in technology, the need for security and privacy also increased as hackers are trying to find every possible loophole in the system to exploit this technology to steal private and confidential data of the public for extortion or personal gains. The faith of people in the government is already grasping for straws due to a lack of transparency and increasing corruption among government organizations.


To eliminate this skepticism regarding government organizations, one potential solution is the introduction of blockchain technology into government services to nurture transparency and competency among the organizations. Blockchain is an excellent technology that can achieve maximum efficiency in government services to offer a secure, yet efficient sharing.


More often than not, blockchain is considered as a cryptocurrency since it was first introduced along with the very first cryptocurrency Bitcoin. However, blockchain is the underlying technology for cryptocurrencies and has a vast number of applications rather than just for cryptocurrencies. Blockchain technology is an entity that stores digital information in groups called ‘blocks’ in several databases known as ‘chains’ in a network connected through peer-to-peer nodes. This storage is known as a ‘digital ledger.’ The technology helps the digital information to be distributed but not copied. The uploaded information is ceaselessly reconciled into the database, which is stored in numerous locations and updated instantly.


With the recent increase in data theft and several cases of hacking of government websites, government organizations all across the globe are turning towards this relatively new technology and exploring the feasibility of introducing this technology into the mainstream. Many government and public agencies have already begun piloting and testing blockchain applications for secure data sharing, smart regulation, budgeting, and financial management, asset management and process tracking, payments, identity management, cybersecurity, and the list continues to grow.


While the applications are indefinite and still growing, a few use cases in the government sector are explained briefly;

  1. Building trust with citizens.

Due to opacity regarding cash flows and corruption inside the government organizations, the public trust in government is diminishing day by day as the people don’t trust the government to do the right thing in most of the cases. But, blockchain has the ability to reverse this trend by bringing transparency through decentralization and allowing all the concerned parties to verify their data independently without the intervention of any third party. All the concerned parties will share access to records, thus eliminating the reason for distrust.


  1. Tracking loans and student grants.

Student loans are an important aspect of our society, as most of the students opting for higher education are not financially stable to pay for the complete course by themselves. A student loan helps them in providing a better chance to complete their studies and pursue their passions. But, tracking compliance with terms and conditions, granting applications, dispensing, and managing loans is a complex process, and more often than not, either the students or the organization has to suffer due to the complexities. With blockchain technology, smart contracts can be programmed to manage these problems in real-time and increase transparency and security.


  1. Central banking.

Blockchain can be used in central banking systems to increase the transaction volume with higher security. Like, in complex real-time gross settlement processes that require settling of interbank payments instantly rather than at the end of the day, blockchain can ensure to process it at a faster rate without compromising with the security.


  1. Smart cities.

Smart cities utilize their available resources efficiently with the use of technology to incorporate social, physical, and business infrastructures to provide economic and efficient services to its inhabitants. Blockchain can ensure to create a secure functioning of these resources and services and allow them to operate on superior levels.


What is Maharashtra blockchain policy?

Maharashtra has become the second state after Andhra Pradesh to become the second state in India to introduce a state blockchain policy India. It will ensure faster growth in the implementation of services by various organizations and ministries. The Government of Maharashtra has already implemented its first blockchain pilots in healthcare. It has also used this technology in documents, SSC certificates, and supply chain services.


The state is presently planning to create a regulatory sandbox over various applications. The various services and industries where the government aims to apply the technology are document management, supply chains, vehicle registration, and agricultural marketing.


As per CryptoMoonPress, Maharashtra Information Technology Directorate will be leading the development, and a sum of near rupees 10 cr. has been assigned to the project out of which rupees 4 cr. has been approved by the implementation committee for adoption of blockchain technology.


The blockchain sandbox of Maharashtra has been selected among the three major projects by the government of India to be showcased on the civil services day. The startups will be allowed to test and experiment with their solutions on the sandbox and then launch in a live environment.


The government is confident that the introduction of blockchain technology will simplify and speed up the verification and authentication of crucial documents like rights of ownership, proof of birth, family lineage, and many more to be mentioned. As the technology is just setting foot in the country, some misconceptions and myths need to be exonerated before its final application in the mainstream services.