Blockchain technologies serving the public sector

The creation of the European Blockchain Services Infrastructure (EBSI) for the European public sector demonstrates the potential of blockchain technologies in the context of the digital transformation of administrations.

Tomorrow, a blockchain could manage the payment of financial assistance to a Social Security recipient. It could be matched against one blockchain that manages digital identities and another that holds information to confirm the person’s eligibility for assistance. This would reduce the risk of fraud and automate a process that was previously lengthy for the citizen and costly for the administration.

The promise of blockchain is to create an environment of trust and cut the famous “bureaucracy”.

This is the future envisioned by several states around the world that have been exploring the potential of blockchain technologies for the public sector for several years. Through the formation of sectoral or cross-sectoral communities of practice and public-private partnerships, more and more of them are implementing a variety of applications around identity, document certification, etc. In Europe, the European Blockchain Services Infrastructure (or EBSI, for European Blockchain Services Infrastructure) is a concrete example of a public sector operated blockchain.

Confidence, fluidity and cost reduction

The success of digitizing public services requires addressing a number of challenges related to trust, transparency or efficiency. For example, the adoption of a digital platform by all users requires that their fears about the security and confidentiality of their personal information be allayed.

Thanks to its unique properties (immutability, consensus, irrevocability, and traceability), blockchain can help overcome these challenges. The promise is to create an environment of trust and to streamline certain processes, thus reducing the famous “bureaucracy”.

In concrete terms, the blockchain provides a decentralized infrastructure on which transactions (the exchange of digital assets – for example a file – and their status or state changes) can be carried out between different administrations, between administrations and citizens, and between citizens (if they are an element of the include public service).

In this context, this technology brings two advantages over traditional centralized databases, described by the University of Lille in their white paper dedicated to this topic. On the one hand, it guarantees the integrity and traceability of data in real time, for transparent collaboration between users without resorting to an external trusted third party. On the other hand, it enables the self-execution of “smart contracts” to automate and secure processes, with the key to gains in efficiency and quality.

“For public services, this means, for example, that the blockchain can facilitate the verification of official documents without having to contact the issuing body every time,” the authors of the white paper explain.

The potential benefits of using a blockchain are numerous. They range from reducing the cost and time it takes to review documents to reducing the risk of fraud by allowing officials to visualize the evolution of a document.

Turnkey blockchain infrastructure

Aware of these benefits, Europe launched the European Blockchain Partnership (EBP) in 2018, a joint initiative of the European Commission, the 27 Member States of the European Union (EU), Norway and Liechtenstein. The goal: to use the potential of blockchain technologies to improve and innovate national and transnational public services in the fields of health, education, anti-fraud, etc.

This initiative led to the creation of the European infrastructure of blockchain services, which the states “a turnkey environment and infrastructureenabling high levels of collaboration and unprecedented governance to improve and innovate national and transnational public services”.

EBSI is a network of blockchain nodes distributed across Europe and hosted by EBP-licensed operators, providing public administrations, businesses and citizens with cross-border public services. It consists of different layers (infrastructure, basic services such as time stamps and electronic signatures, and use cases) and integrates several technological building blocks “à la carte” that administrations can use to carry out their own digital transformation strategy.

These already available and proven technological building blocks have to support a certain number of use cases, which will be selected by the member states of the partnership.

“Easy to verify, impossible to falsify”

In fact, the EBSI relies on a small number of specific applications that will grow over time. These applications are grouped into three main families of use cases, thematic areas where blockchain technologies can help solve a range of problems.

These are verifiable attestation (with the aim of “making information easily verifiable but not forgeable”), tracking and traceability (“track and trace”) and finally reliable data exchange. At the moment only the first domain has been defined by the EBP.

Within these families there are several applications, each with specific goals:

  • Self-Sovereign Identity: Empower users to create and control their own identity across borders without relying on centralized authorities with a bridge to technology established by the eIDAS regulations.
  • Credentials: Give citizens back control when managing their credentials, dramatically reducing verification costs and increasing confidence in authenticity.
  • Attestation: Create reliable digital audit trails (with an audit trail you can track all steps of an invoice process), automate certain compliance checks and prove data integrity.
  • Secure data exchange: Secure data exchange between EU authorities (starting with IOSS VAT registration numbers).
  • Asylum applications: facilitating the management of cross-border and “transauthorized” asylum application processes.
  • European Social Security Number: facilitating cross-border access to social services.
  • Financing of SMEs/ETI

In a working paper published in 2018 The OECD also identified a number of interesting use cases such as the registration of land titles, the management of intellectual property rights or the management of public service procurement contracts with a gain in transparency of public spending.

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