US Treasury Department Pilots Blockchain Technology to Monitor Federal Grants
The US Department of the Treasury which deals with the government’s revenue system has recently executed primary tests and trials for integrating the Blockchain technology into their system. The Department will be utilizing the blockchain technology for tracking Federal grant payments and is in the final phase to complete the blockchain-powered proof of concept program credit for grant recipients.
The news was shared by a program manager at the treasury Craig Fischer in a conference held by the Treasury department. The topics discussed at the conference were about the modernization of the federal financial systems in which fisher informed that the department will tokenize electronic Federal letters of credit sent out to grant recipients to monitor the payment granted to the recipients.
Fischer further added that the integrated Blockchain technology makes the transactions process more secure and enhances the overall efficiency of the system. The token is a more convenient option to grant and track the payments rather than cash transfers. It is also beneficial to verify other essential details including the recipient’s identification, key dates of the communication, transactional details, etc.
What is the Blockchain-based Letter of Credit?
The blockchain-based letter of credit offers peer to peer transfer of tokens to the primary grantees and secondary grantees. The recipients need to maintain an electronic wallet that would be associated with their bank account. On this account, they will receive the tokenized letter which will be a peer-to-peer transfer of grant in the tokenized form.
The department has been in the process to deploy blockchain technology for the last few years. They have been associated with the National Science Foundation, San Diego State University, and Duke University to run the trials within the system. The project is supposed to end by January end.
In 2018, they run another pilot project which developed a prototype blockchain to manage the internal computer network and cell phones. The technology has proven its capability to handle and simplify reconciliation operations involved in financial transactions.
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