Ever since the arrival of blockchain technology, cryptocurrencies and decentralization have become the talk of the town. Both are sub-products of blockchain technology, which are further harnessed by some countries for their economic development while others gave them the cold shoulder for various reasons. Some countries’ governments have utilized some kind of blockchain-based technology to embrace business processes, voting facilities, smart cities, the concept of digital currencies and other similar systems. While others have either directly or indirectly rejected blockchain-based systems. There are, of course, still others who remain neutral, preferring to learn from others’ experiences. Here is the wide picture of how blockchain technologies are transforming the very infrastructure of human life and how some countries are missing the blockchain boat when it comes to streamlining governance.
A few countries seem to have realized that if they want to compete in a global economy, they have to offer more and do it in a way that does not burden their citizens. Singapore, Estonia, Brazil, Venezuela, and China have all been market leaders in these types of initiatives. Singapore’s Smart Nation and Estonia’s e-Residency projects are unique systems that strive to reduce the paperwork and wait times for citizens and increase the efficiency of shared resources. China’s efforts to reduce fraud have changed the dynamics of the blockchain space.
Estonia is a small country in the European Union with 1.3 million inhabitants. It has limited resources to meet the needs of its citizens, but through technology, it has been able to exceed the capabilities of many larger nations. Estonia launched digital ID cards for online services and was the first country to offer e-Residency, a digital identity, available to anyone in the world interested in operating a business online. Signing up for an Estonian e-Residency takes a few minutes, and the background check costs about $100. Having an e-Residency card does not make you a citizen of Estonia, but it does give you a lot of benefits.
Estonia upgraded its income and social tax returns environment in 2015 and collected €125 million more in value-added tax (VAT) than the previous year due to the development and extensive usage of e-services. The Estonian government added a tax liability calculator that pulls data from it citizens’ incorporated banking systems. It also made it easy to submit invoices within the system. The Estonians have embraced blockchain technologies. Furthermore, they have also hired top tech firms such as Ericsson, Apcera, and Guardtime to create a hybrid cloud platform using blockchain technology that will enhance the scalability, resilience, and data security of tax reporting and online healthcare advice.
Apart from Estonia, Luxembourg created a legal framework for electronic payment establishments in 2011 and was early on the idea of “electronic money.” Luxembourg and the UK have become home to many blockchain companies because the regulatory environment is easier for them to navigate and afford. For less than $1 million, blockchain businesses can obtain a payment instrument license in the European Union. These licenses grant companies access to 28 EU countries. This approach has allowed the EU to advance beyond the United States in Fintech innovation.
Digging deeper, using Ethereum blockchain, Brazil has developed a framework not only for digital voting but for all sorts of jurisdiction processes which are currently paper free. Venezuela has created its own cryptocurrency called the Petro backed by commodities like oil and gas, which can be used in the fight against the mountain of national debt the country faces and may help get the economy back in shape.
There are many more examples that are cropping up all over the world. The Republic of Georgia is using blockchain-based technology to modernize its land registry. Blockchain-based voting is on the rise in Switzerland. Chile is using the technology to track energy data. There’s even a blockchain-based business registry platform in the state of Delaware in the United States.. Dubai is aiming to become blockchain capital of the world by the year 2020. It has been implementing the blockchain technology in every possible division of government, business, and lifestyle.
These are still the early days of the implementation of blockchain-based technologies. Governments are often criticized as being slow to adopt new systems and change the way they function. Bureaucracy is often an impediment to rapid change. These aforementioned countries, however, are breaking that mold by adopting what is essentially cutting-edge technology and change the fundamental way we think about governance and data. It’s only a matter of time before these technologies are commonplace, but those that hop on board now are better positioned to take advantage of the benefits in the short term.