“Wide interest” from government departments in deploying blockchain

Profile picture for user ddpreez By Derek du Preez April 18, 2018
Summary:
Secretary of State for DCMS, Matt Hancock, gave a speech this week talking up the benefits of blockchain technology and the need for better regulation.
Matt Hancock
Secretary of Sate for DCMS, Matt Hancock

The Secretary of State for Digital, Culture, Media and Sport (DCMS), Matt Hancock, has said that there is “wide interest” from government departments in deploying blockchain in order to tackle a wide range of issues.

Hancock said that blockchain applications could give citizens greater insight into how their data is being used, where he hinted at the tensions that have been spawned off the back of the recent Facebook/Cambridge Analytica furore.

Hancock’s speech, which was delivered at the Law Society today, comes shortly after the UK entered into an agreement with EU member states to collaborate on EU-wide blockchain applications.

Blockchain is best known for underpinning cryptocurrency Bitcoin, but its applications have been growing in popularity well beyond this – including in the broader financial and charity sectors.

Blockchain is essentially a distributed ledger that creates a shared and unalterable record of events. The European Commission believes that blockchain could be used to promote user trust, as it makes it possible to “share on-line information, agree on and record transactions in a verifiable, secure and permanent way”.

Hancock said that although blockchain has seen early adoption in the FinTech field, thanks to the rise of cryptocurrencies such as Bitcoin, he added that “there is no reason the technology should be restricted to one sphere”. He said:

My second point is that blockchain technology holds real potential to make Government services more efficient. Its multi-faceted nature means we all stand to benefit.

This technology could help us solve some of the great global social challenges of our time. The World Food Programme is running a pilot in a Jordanian refugee camp, where over 10,000 Syrian refugees can buy food from local shops with merely a scan of their eye.

There is no need for cash, credit cards or paper; the transactions are instead recorded on the blockchain. And blockchain-based cryptoassets are now being developed to reward solar electricity generation, to support the provision of clean water, and to provide innovative models of charitable giving.

So the benefits are clear and we want to see them here in the UK.

Hancock said that he has received “wide interest” across government in deploying blockchain to tackle a wide range of issues, including from Defra, the Ministry of Justice, DFID, HMRC and BEIS.

The government has already invested around 10 million pounds through Innovate UK and research councils to support blockchain projects in areas as diverse as energy, voting systems and maximising value from items donated to charity. Hancock added:

And there is a benefit which seems particularly timely given recent events. Blockchain can give users more transparency about their data. There is the opportunity for users of Government services to be able to control access to their personal records and know who has accessed them.

Better regulation

However, as with any new emerging technology, regulators are slow to keep up and Hancock is keen to ensure that the government’s response to blockchain is appropriate, particularly with regard to the frameworks that govern its development. He said:

Just as the internet is not governed entirely by individual nations or corporations, it is unlikely that there will ever be a uniform governance model for blockchain technology. But I am determined that the UK should play its part in making sure blockchain technology is developed in a way that benefits us all.

Where technologies rub up against regulatory barriers, we want our regulators to be alert and responsive and supporting the deployment of new technology where there are obvious benefits.
We know the ever-increasing pace of innovation places pressure on regulators to respond faster.

I want our regulators to carry out their essential roles - preventing harm, providing certainty to businesses and trust to citizens - without stifling innovation.