Use cases for blockchain technology by governments

Think not of what your data can do for you, but what you can do for your data

In a world where simply adding the word “blockchain” to a company name can trigger a 500% share price spike, it is not necessarily easy to distinguish between the hype surrounding blockchain technology (and in particular, its application to cryptocurrency or digital assets) and legitimate use cases. However, blockchain-based solutions have the potential to improve both the delivery of public services and trust within the public sector.

In light of the Australian Government’s recent announcement of its $1 billion deal with IBM to accelerate the update of blockchain, artificial intelligence and quantum computing in the public sector, we have considered how the adoption of blockchain-based solutions are transforming public services, particularly in relation to records and registries and supply chain management.

Registries

A key use case for blockchain technology lies within its essential function as a digital ledger. Blockchain-based registry solutions are being developed, tested and put into use by a number of overseas governments. Proponents of blockchain-based registries claim that the technology provides a secure, decentralised and immutable ledger of transactions for governments and vetted private sector entities such as hospitals and financial institutions.

For example:

• perhaps most famously, several of Estonia’s public services registries are built on blockchains, including identification, voting, tax, and health records;
• HM Land Registry (the UK’s national land registry) has recently announced that it is partnering with Methods to develop a platform to store land registration information and streamline the process for buying or selling properties; and
• the US Postal Service is developing a blockchain-based registry for authenticating user information.

Locally, governments are now also exploring blockchain-based registry solutions.For instance, the New South Wales Government’s new digital driver’s licence rollout is underpinned by blockchain technology developed by Australian firm Secure Logic.

At the federal level, the Department of Health has also successfully trialled the use of blockchain technology to allow researchers to access certain medical information contained within platforms such as My Health Record to allow them to undertake large-scale studies using patient data without the risk of data breaches or re-identification of patient data.

Supply chain management

Another use case for blockchain technology in the private sector has been in the context of supply chain management. It is estimated that food fraud costs the global food industry approximately US$40 billion each year and this figure is increasing, particularly as a result of inefficient and outdated regulation and government controls. The recent launch of HalalChain in the UAE demonstrates the successful deployment of a blockchain-based solution which enables consumers to track and trace halal products in an attempt to overcome some of these difficulties.

Improved supply chain management also facilitates more efficient services for businesses and their customers.  For example, local pilot programs by the Commonwealth Bank of Australia and Australian agri-tech company Agridigital have shown promising results within the private sector.

The tokenisation of physical assets is also an effective means of trading other commodities such as energy and water.  For instance, Brisbane-based company Civic Ledger has developed Water Ledger, which provides a platform to verify all water trades and update state registries in real time to prove that a water trade has occurred, as well as showing the location of the trade.

Next steps

Despite all of the potential benefits and opportunities blockchain-based solutions can offer, it is important to remember that it is still a rapidly developing technology and, like any other conventional technology, is not without its risks and limitations.

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This publication covers legal and technical issues in a general way. It is not designed to express opinions on specific cases. It is intended for information purposes only and should not be regarded as legal advice. Further advice should be obtained before taking action on any issue dealt with in this publication.