Japan is reportedly looking to integrate blockchain into its online systems for accepting government contract bids.
According to Nikkei Asian Review, the Ministry of Internal Affairs and Communications, who oversees the Japanese administrative system and manages local governments, will test a blockchain-based system for processing government tenders in the fiscal year starting from this April through March 2018.
In the tendering process, governments solicit bids for contracts from vendors, collecting a swath of information from those companies as they assess whom they’ll award projects. Japanese officials want to see if blockchain can help improve the efficiency of existing processes by using the tech to connect the government offices that possess the required information. In this case, blockchain would form part of that back-end system for sharing data between agencies, if implemented.
Japans’s government procurement market amounts to more than $600bn annually – an amount worth 16.2% of the country’s GDP, and 38.3% of its total public-sector expenditures – according to research from the Organisation for Economic Co-operation and Development.
The focus on procurement forms part of a broader strategy to incorporate the tech in e-governemnt systems, according to Nikkei. Future plans are said to include sharing some of the findings of the trial with private-sector partners.
Japan isn’t alone in testing this use case area. As CoinDesk reported earlier this month, the US General Services Administration is seeking prototype proposals in a bid to see how blockchain could improve its contract review process for IT vendors.
Testing to begin this fiscal year with tender applications
Japan aims to incorporate blockchain technology into its e-government systems.
TOKYO — Japan wants to use the data storage technology behind bitcoin and similar virtual currencies to update how individuals and companies interact electronically with government, aiming to bolster information security while cutting administrative costs.
The Ministry of Internal Affairs and Communications will test a blockchain-based system for processing government tenders in the fiscal year through March 2018. Next fiscal year, it plans to lay out a roadmap for incorporating distributed-ledger technology in e-government systems and begin moving in that direction.
Blockchains have drawn worldwide attention for their ability to create highly transparent and secure systems for such purposes as transferring money. Forging entries in a blockchain-based distributed ledger is extremely difficult, since data is shared by everyone in the system rather than stored in any single computer.
The centralized servers behind much of today’s IT systems require costly protection against cyberattacks, and the risk of data theft places limits on the types of information that can be shared with and within government, officials say.
The ministry envisions a blockchain-based system making tender applications easier for both the private sector and government. Instead of applicants collecting the tax payment certificates and other necessary documents from various government offices, for example, the agency issuing the tender would be able to gather the information electronically.
Further down the road, the Japanese government will consider sharing its blockchain-related know-how with the private sector. Some have suggested the use of blockchain technology in securing data involved with autonomous driving, power stations and other key infrastructure.
Central banks could allow access to accounts around the clock if they used blockchains or cryptocurrencies, a senior Bank of Japan official speculated last week.
Speaking during a finance forum on 21st April, deputy governor Hiroshi Nakaso touched on the subject of so-called central bank digital currencies, or CBDCs, and their potential impact on how people interact with their accounts at a given time.
One proposal is to offer central bank accounts to retail customers through a CBDC (something that officials at the Bank of England have highlighted in the past). In his speech, Nakaso brought up this idea, suggesting that, depending on the degree of adoption, such an arrangement could give account holders continuous access to funds. Read more.