The UK Department for Work and Pensions is currently trial testing a blockchain-based prototype that may be used to deliver a more robust system of welfare payments.
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Can Blockchain Technology Improve Welfare?
The news was revealed at the Payments Innovation Conference 2016 on July 4 by Minister for Welfare Reform at the Department for Work and Pensions, Lord Freud. Additionally, a press release from GovCoin Systems Limited, a fintech company dedicated to the project, stated that other legacy institutions are also involved in the project. Specifically:
We have been working with GovCoin Systems and their partners, Barclays, RWE npower and University College London for this trial.
The proof-of-concept began trialing back in June and welfare recipients use their phones to toggle benefit payments where all actions are recorded on a distributed ledger system. The project aims to create a more secure and highly efficient welfare infrastructure that can prevent fraud.
Jeremy Wilson, Vice Chairman, Corporate Banking at Barclays, says the initiative adds a richer layer of data and identity between government officials and claimants.
“We are keen to see how the positive potential of this service develops and adds to our wider efforts to explore the uses of distributed ledger technology,” the Barclays executive adds.
Meanwhile, GovCoin Systems Limited believes distributed ledger technology can save $1 trillion annually due to friction and fraud. By leveraging blockchain innovation, the project has the potential to achieve more “machine learning and the ubiquity of mobile devices.”
Robert Kay, Chief Executive Officer, GovCoin Systems Limited, stated:
GovCoin Systems brought together a team with deep expertise in core financial services infrastructure and global transaction services to build a platform with the potential to improve people’s lives. This proof-of-concept is the first concrete stage in that journey. We believe in a flexible, open and collaborative approach and are already working effectively with Barclays and RWE npower to develop creative answers to the complex problems faced.
It’s becoming increasingly clear that governments are taking blockchain technology seriously as they fund projects in an attempt to bring legacy institutions up to speed including fields such as healthcare, criminal activity, welfare distribution, taxes, and nearly everything state agencies provide. However, the question remains whether this innovative technology fix many of the broken government systems worldwide.
What do you think about blockchain technology securing and enhancing the welfare state? Let us know in the comments below.
Images courtesy of the UK Department for Work & Pensions, Shutterstock.