The British government is considering disbursing research grants using bitcoin or some other blockchain-based currency, according to Matthew Hancock, the Minister of the Cabinet Office and Paymaster General.
In a speech at Digital Catapult, a government-funded think tank., Hancock said the Cabinet Office has begun exploring ways to use blockchains with a particular interest in how it could be used in the disbursal of government research grants.
“Monitoring and controlling the use of grants is incredibly complex. A blockchain, accessible to all the parties involved, might be a better way of solving that problem,” Hancock said.
In validating bitcoin’s usability, he stated:
Bitcoin proved that distributed ledgers can be used to track currency as it is passed from one entity to another.
Blockchain Versus Bitcoin?
Politicians have been wary of linking blockchain initiatives to bitcoin on account of the latter’s association with the dark web and black markets, according to Quartz. George Osborne, the Chancellor of the Exchequer, has used the term “digital currency” rather than bitcoin.
In August of 2014, the chancellor announced a series of measures to support the growth of the country’s fintech sector and encouraged exploring the potential of digital money. Osborne last year announced £10 million ($14.5 million) in funding for think tanks, including Digital Catapult, to study digital currency technology. (Osborne did, however, use a bitcoin ATM as a guest speaker at Innovate Finance that year.)
Cabinet Office Acknowledges Bitcoin
The Cabinet Office, however, showed little hesitancy in discussing bitcoin, noting the use of bitcoin to disburse funds is a possibility. A government spokesperson said it is exploring any type of blockchain technique, including bitcoin.
“There are a number of areas blockchains can be used, including government grants,” the spokesperson said.
It can be used to track the money and it gets tax payers a better deal, potentially.
Hancock noted that the Cabinet Office helped to establish the Government Digital Service (GDS) after recognizing in 2010 that the Internet had become part of the fabric of the nation but not the government.
“We’re exploring the use of a blockchain to manage the distribution of grants,” Hancock said.
Monitoring and controlling the use of grants is incredibly complex. A blockchain, accessible to all the parties involved, might be a better way of solving that problem.
He said bitcoin proved that distributed ledgers can be used to track currency as it passes from one entity to another. “Where else could we use that? Think about the Student Loans Company tracking money all the way from Treasury to a student’s bank account. Or the Department for International Development tracking money all the way to the aid organization spending the money in country.”
Report Supports Distributed Ledger Technology
Sir Mark Walport, the Government Chief Scientist, published a report in January to determine how the technology can transform the delivery of public services and improve productivity. A chapter in the report focused on the uses of blockchains within government.
“Distributed ledger technologies have the potential to help governments to collect taxes, deliver benefits, issue passports, record land registries, assure the supply chain of goods and generally ensure the integrity of government records and services,” the report said.
“Distributed ledger technology is already having a profound impact on how private companies manage data and interact with customers and suppliers. If applied within government it could reduce costs, increase transparency, improve citizens’ financial inclusion and promote innovation and economic growth.”
Featured image from Shutterstock and LinkedIn.
Last modified: March 4, 2021 4:48 PM