At The Payments Innovation Conference on 4 July, conservative minister Lord Freud has announced that the Government has been developing and testing blockchain technology to keep track of welfare benefits. Intention to revolutionize welfare system
The platform developed by the Department of Work and Pensions and GovCoin , a London-based startup, is undergoing a proof-of-concept trial where payments are recorded on a distributed ledger. The trial’s participants include Barclay, Npower and University College London.
Robert Kay , CEO of GovCoin said: “GovCoin has united a team of strong professionals expertizing in financial services and international transactions. Our main objective is to create a platform that could significantly improve people’s lives. Developing of prototype is the first step in that direction.” Testing of the prototype was initiated in June, and according to David Freud , the Minister of State for Welfare Reform, the application of technology will be monitored to see whether there is a potential in that area, and most importantly, how benefits claimants can benefit from this approach.
Freud explained: “Claimants are using an app on their phones through which they are receiving and spending their benefit payments. With their consent, their transactions are being recorded on a distributed ledger to support their financial management.” Snooping on benefits spending? Although it implies a certain freedom to chose whether transactions are transmitted to the app, it raises more questions.
Thus, the GovCoin is specializing in platforms that utilise alternatives to cash, such as Bitcoin. Does it mean that the government is considering the possibility to create a benefits currency in the manner of Bitcoin that could only be received and spent through the app?
While unveiling a potential of technology in the benefits space is certainly promising, the project run by DWP is rather questionable and looks more like an attempt of […]
