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Blockchain is becoming the technology platform of choice of many newly-founded startups for a variety of reasons. The dazzling rise in the prices of bitcoin and ether has put the spotlight on cryptocurrencies and crypto activities. The technology itself proves valuable to any task that requires transparent and immutable record keeping. Initial coin offerings (ICOs) have also challenged venture capital and angel investment in the speed and ease by which companies could raise significant funding.
However, aside from startups, governments should be among those looking to leverage blockchain’s capabilities. Forward-thinking governments have now started to experiment and integrate the technology to their e-government strategies. Sweden has been testing the use of blockchain for its land registry. The UK is also using it to monitor distribution of welfare and benefits. There are now even organizations that promote government adoption of the technology.
Blockchain brings three key features that make it ideal for government use: decentralization, transparency, and immutability.
Decentralization means the data and infrastructure doesn’t reside in a single centralized authority. This helps in breaking down bureaucratic siloes and promoting the sharing of information across governmental functions. Security-wise this also eliminates the single point of failure that increases cyberattack risks. All transactions recorded in the blockchain are also publicly viewable by network peers and mechanisms are in place that verify the integrity of data across the network. Any attempts to change the records are virtually impossible.
These features make blockchain a promising technology to fight the problems that ails many governments – corruption, bureaucratic red tape, and the lack of accountability to the people.
As such, blockchain adoption should be a welcome development in a region such as Southeast Asia (SEA) where governments still perform poorly in terms of accountability and oversight. In Transparency International’s Corruption Perceptions Index of 2016, only Singapore is the closest to being a “very clean” government among SEA countries. Though to be fair, no country got a perfect score. The global average is 43 in a scale where 0 means “highly corrupt” and 100 means “very clean.” Most SEA countries score in the 30s and 20s. It has become all too common for SEA countries to be treated to news about corruption on a daily basis.
Just recently, the Philippine president has been embroiled in another scandal as he is now under investigation for allegedly having more than PhP1 billion flow through his bank accounts despite having only declared to have a net worth of PhP27.4 million in his 2016 net worth statement – a document Philippine government workers must complete under oath.
In the Philippines, large bank transactions have to be reported to the Anti-Money Laundering Council. If government data such as net worth declarations and anti-money laundering reports would be on a blockchain, it would simply be a matter of looking up and verifying historical data and information to know the truth behind the allegation.
However, one could only wish this would be as simple. Existing data privacy law and bank privacy law may be at odds with efforts striving for full transparency in government as these make it difficult to check and verify the charges against actual bank records. Perhaps in irony, the Freedom of Information Order that guarantees all records except those related to national security under the Philippine executive branch to be made available by request to the public was signed by the same president early in his term.
Sadly, to change this, new laws have to be passed. However, legislative power rests upon bodies that have been accused of corruption themselves. In addition, development of e-government services in the region moves at varying paces per country. The Philippines, for instance, only held its first automated elections in 2010 and still the accuracy and transparency of the system has been questioned since. One should also not forget and overlook that Philippine voter data containing names, dates of birth, addresses, and biometric information had been breached and leaked online.
Blockchain development in the country has mostly been revolving around bitcoin and distributed ledger for businesses applications so creating a system for the government to use may also be a question of competency. Many e-government services rely on third-party providers. External help may be the only viable direction if such a project is undertaken soon.
Despite these, citizens must not overlook the potential a technology such as blockchain brings to promote transparency and accountability to governments. The technology is already available so people must drive the change and trigger the catalyst towards cleaner and trustworthy administrations.
Featured Image: 123RF