The U.S. Treasury Department, which is responsible for the administration of government revenue, is testing blockchain technology to track federal grant payments.
The Department intends to use a proof-of-concept program that will serve as a blockchain-based letter of credit for grant recipients, according to Craig Fischer. Fischer is the head of the innovation program at the Treasury department, and announced this at a conference, according to Federal Computer Week (FCW).
Tokenization helps the Treasury Department with identification
According to the report, the test program uses accreditation tokens to track the flow of funds from federal reserves to recipients. Via tokenization, it should be possible to identify the number of recipients, the amount of the money and important data such as the time that the tokens were awarded.
Recipients of grants would have to have an electronic wallet linked to a bank account. Only then can the tokenised letter of credit be obtained. However, access would be limited and not publicly visible unlike the bitcoin network. The Department of the Treasury has been working on this project since September and is cooperating with San Diego State University, Duke University and the National Science Foundation.
Blockchain not the first time topic in the ministry
This is not the first time that the ministry has dealt with blockchain technology. As early as 2018, it was working on a pilot project aimed at developing a blockchain-based prototype. This should enable the management of physical goods such as mobile phones or computers.