With the World Economic Forum in Davos drawing nearer, many are expecting cryptocurrencies and Blockchain to take centre stage, with many related panels, and speakers on this year’s agenda.
The US Government has always been visionary and forward thinking when it comes to technology, and Blockchain is no exception. Over the last few years, they have not only funded, but collaborated and partnered with various businesses in a multitude of countries, as well as schools and educational institutions with the aim of developing innovation in technology and science. At the heart of US economic, legal, and political structures are the fundamental concepts of IP, contract law, and transactions. To keep up with the fast pace of the digital revolution, many government agencies are now evaluating and even implementing Blockchain technology to enable them to improve efficiency, trust, and transparency in areas such as financial management, procurement, supply chain management, IP, government issued credentials, workforce data, appropriated funds, and even federal assistance and foreign aid delivery.
The Emerging Citizen Technology Office
The General Services Administration’s (GSA) Emerging Citizen Technology Office has recently launched what is known as the US Federal Blockchain Programme, for the use of both US based business, and federal agencies that have shown interest in discovering what Blockchain has to offer, and the scope of its implementation within the US Government. Blockchain has already been utilised by the GSA and is currently used to both automate and speed up the process of reviewing contracts for its FASt Lane Programme.
Department of Treasury
Another government department which is utilising this technology, is The Treasury Department who is running a pilot programme to evaluate whether Blockchain technology can be used for the purposes of supply chain management. So far, the results look promising- processing times have been accelerated, efficiency is increased, and financial controls in the private sector have been strengthened.
Steven Mnuchin who is both The Treasury Secretary, and one of the individuals that will be on a Blockchain panel at Davos, believes the only way to fulfil Trump’s public infrastructure plan, without adding to the burden of debt, will be through forming strong public-private partnerships (PPP). These relationships must be forged with foreign investors and will be designed to stimulate economic growth as well as passing on a substantial portion of the risk funding, to the private sector.
The concept of a functioning PPPs characteristically involves a government agency highlighting a particularly project and then evaluating whether there is enough potential revenue to attract more interest from investors and to attract the attention of other bidders as well. Then, the government agency would proceed to select one or more entities from the private sector to take care of design, build, finance, operations, and maintenance. In a PPP, it is usual that the government owns the project overall, yet grants the private sector significant powers when it comes to its development and authority.
Mnuchin explained: “Working with foreign investors is going to be a critical part of any plan we put forward and public-private partnerships are crucial to ensuring that the American taxpayer does not bear the full cost of any proposed program.”
The US Treasury has also been involved in initiatives which have sought to improve and build on AML/CFT regulations and frameworks for Blockchain based cryptocurrencies. It has forged relationships and subsequently PPPS with various financial institutions to facilitate the sharing of information.
The US State Department
The US State Department places a huge emphasis on the importance of continuing to innovate in the areas of global economic development, as well as encouraging conversation between the private sectors that are already utilising Blockchain technology.
Deputy Secretary John J. Sullivan explained: “The State Department supports public-private-partnerships. For example, in maximizing the impact and accountability of foreign development/assistance, Blockchain technology by bringing transparency, may address corruption, fraud or misappropriation of funds and inefficiencies within the public procurement funding process itself,”
Procurement on behalf of the US Government, contributes a significant chunk of funds to the world economy, roughly equating to $9.5 trillion. According to a recent study conducted by the OECD, around 25% or $2 trillion is siphoned off annually due to corruption. This is a large amount of taxpayer’s money and procurement remains as the government activity which is most vulnerable to fraud, corruption, and wastage of public funds. Corruption impacts the fair awarding of contracts and has a knock-on effect in reducing the quality of basic public services, as well as inhibiting the opportunities to develop a truly competitive private sector.
But the US Government is not the only one to take significant steps towards embracing the technological innovation of the Blockchain. Malta has also announced its plan to create a full legal framework to regulate the use of Blockchain and cryptocurrencies, as well as to enable it to comply with AML legislation. During the course of 2018, it is expected that more and more governments and businesses will being to understand how Blockchain can be effective in a range of business areas, including, but not limited to procurement and turning it into a strategic tool for revenue growth, competitiveness, and vast improvements in health, the economy, and public quality of life.
To date, over 40 countries have developed their own national innovation strategies, or even launched innovation foundations. The majority of them have also taken steps to relax constraints placed on foreign direct investment, and are providing funding, financing, encouraging public-private collaborations, offering tax breaks, and asking foreign private sector stakeholders for commitments to their countries. Through maximising the impact and accountability of foreign assistance, the Blockchain can help to address the very real and serious issues of fraud, corruption, and the misappropriation of funds.
The success of a NASA mission encompasses many different elements, one of these being efficient communication and efficient computing techniques. Bearing this in mind, greater accessibility to digital information and innovative yet cost effective technologies of both manned and unmanned flights are expected to become more efficient via the use of Blockchain technology. NASA has just funded a grant to the University of Akron, OH, which will be used to fund research into a new type of deep-learning AI that can work over an Ethereum Blockchain network to create a networking and computer paradigm in a range of space communications situations.
So, what does this mean?
For those that are in the known, it is clear that Blockchain is the future of smart, legal contracts, and can turn the world of government and procurement on its head. Both the public and the private sector, companies large and small, can benefit from its efficient and scaleable solutions, as well as benefit from the money saved in the process. It will also help to build public trust in government institutions and corporations, through improved transparency and increased streamlining of various processes.
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