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A US Treasury official wrote an optimistic article on blockchain, calling for more relevant use cases, evidence of concepts and pilot projects with technology.
Craig Fischer, who is program director for the Office of Innovation and Financial Transformation (FIT) within the Treasury Financial Service Office, wrote an article in the Journal of Government Financial Management [PDF].
In his article, Fischer writes about the potential that the blockchain can offer, its ability to eliminate the middleman and how it effectively reduces the time and money needed to process electronic transactions.
He said:
The magic lies mainly in the innovative way of technology to validate transactions and reach a network consensus.
He adds that technology arouses a lot of interest because it can help reduce fraud and errors while improving security.
He adds:
As the financial management community begins to take off the layers of this technology and understand its applicability and uses, we have an opportunity to address some of our most pressing challenges.
These include:
- reduce fraud and documentation errors that contribute to irregular payments;
- provide a more robust and real-time audit trail;
- fight cybercrime;
- better manage and track both physical and digital assets, such as equipment and software licenses;
- tackling challenges related to intra-government differences; and
- Protecting digital identities to better serve the public.
Fischer also states that the financial management community should take note of the promise that the distributed ledger holds for improving efficiency, transparency and security, adding that:
We must begin to develop relevant use cases, proofs of concepts and pilot projects. But the tests are only the beginning of the solution.
In early October, the US Treasury FIT office announced a pilot program to track hardware resources such as computers and smartphones on a blockchain.
John Hill, FIT's Deputy Commissioner said:
There are many exciting innovations from the commercial sector that can be applied to federal financial management. I hope these two pilot projects will identify opportunities where innovations will have the greatest impact on efficiency, accountability and customer service.
The FIT blockchain project will call on an entrepreneur to develop a prototype using blockchain or distributed ledger technology to track and manage physical resources (eg, computers, mobile phones, etc.). "
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