Blockchain Tracker: Governments Trust In Blockchain
Given the fact that governments can be impacted by myriad factors at any time, they need to have a solid financial management system in place. What happens in one corner of the world can have either little impact or significant consequences. All of this depends upon the government policies already in play and how each part of the world is connected to one another.
As Gartner predicts, there will be nearly 21 billion connected devices by 2020, and the amount of information developed on any given day is boundless. So what’s the best way to effectively utilize that data? For government institutions, perhaps the answer lies in the ability to share information in a secure fashion between individuals and institutions.
In a recent study of 200 government leaders from 16 countries, IBM’s Institute for Business Value (IBV) looked specifically at blockchain technology as a possible solution for securely sharing sensitive data. The research showed that by 2018, nine out of 10 organizations will invest in the use of blockchain technology for financial transaction, asset and contract management and regulatory compliance.
While IBM’s research showed that most government institutions are planning to dip their toes into the blockchain technology pool, it appears there’s about 14 percent that plan to dive straight in this year. Specifically, they include the areas of citizen services, regulatory compliance, identity management and contract management.
Because of the size and scope of most government institutions and their controlled financial management, there’s a need for greater transparency, which comes down to the value placed on trust.
According to IBM’s IBV research, “When assets are registered or transactions are recorded on blockchains, the quest for transparency and right to privacy needn’t be at odds. On blockchains, data can be shared widely, seamlessly and, when needed, anonymously. Time-stamped transactions can be verified in something close to real time instead of long after the fact, helping deter fraudulent behaviors. As transparency is amplified, trust becomes more likely.”
One such entity that’s placing its bets on blockchain technology is China. As Reuters reported late last week, the Chinese government is looking to enhance its transparency through the use of blockchain technology to help fight fraud in its core financial division. To help in this endeavor, Chinese banks are hiring blockchain experts to help push through changing policy.
Reuters quoted Brian Behlendorf, executive director of the Hyperledger Project, one of the biggest global blockchain projects, and a former technology adviser to the White House, who said, “China is really interested in blockchain. They’re looking at this as a leapfrog technology. Can you take a very backward, very paper-based market, and reinvent that using blockchain?”
With the amount of new technologies propelling virtually every industry forward, it’s no wonder the banking industry is beginning to follow suit. Chinese banks are still sharing information via old-school methods such as paper memos, faxes and phone calls (see the post). In order to meet the needs of the twenty-first century, the demand for blockchain experts staffed at Chinese banks has doubled, and its investment in the technology has reached an astounding $1.5 billion.
Because of the intricate ways in which blockchain technology processes, stores, and tracks digital information and each minute change within the financial world, it’s difficult for fraudsters to hack. Financial institutions around the world looking to secure every move to help avoid fraudulent transactions will continue to invest more and more in blockchain technology. According to the IBV study and current Chinese investment, there’s a likelihood that the blockchain expert may just be the next big profession of choice.