Chile may be advancing with a plan to integrate blockchain technology into its government infrastructure. Last week, two Chilean lawmakers presented a resolution in the country’s parliament calling for the use of technology.
Members of parliament Miguel Angel Calisto and Giorgio Jackson are struggling to achieve the development of the blockchain in Chile. The two parliamentarians brought the resolution to the Chamber of Deputies and have the support of eight other parliamentarians. They hope that Chilean President Sebastian Piñera will see the advantages that blockchain can create for Chile.
During the last years, the country has been dealing with rising costs and an increasingly dissatisfied population. Many of the social issues that Chile faces go back to the government’s excessive spending. The taxes necessary to maintain these expenditures could be reduced by using blockchain technology.
Giorgio Jackson made reference to a statement from the Office of the Chilean Prosecutor’s Office. It stated that the maintenance of notaries in Chile has become very expensive. Mr Jackson explained that using distributed technologies (DLTs) would reduce costs and help the government to control its spending.
Chile joins the integration movement with the blockchain
Centralized reason books are considered a less harmful system in most of human history. The use of paper records carefully handled by governments and authorized agents is extremely costly. In many areas of the world, archaic systems dating back centuries are still in use.
The real problem, however, is that all paperwork has to be managed by people. This makes a very simple system cost a huge amount, due to counterparty risks.
Blockchain technology on the other hand has the ability to remove these risks from record keeping, to a degree that would be impossible with any other platform. Today, nations have to deal with property registries, social assistance programs and various challenges.
In Brazil, the creation of digital government services is already discussed, and Australia’s scientific agency also sees great potential for blockchain in public pension systems.
Most countries already have a computerized databases that contain detailed records of their citizens. However, many of the social programs use different databases and relatively complex procedures to distribute funds.
Additional levels of human oversight are required with centralized records, but the DLT could be on the verge of changing the entire record, while maintaining the workflow for governments.
The risks of inaction
All over the world, governments are dealing with financial and fiscal crises. The Pew Charitable Trusts recently stated that between 2015 and 2016, the pension deficit in the United States grew by $ 295 billion in total. State pension plans do hold $ 2.6 trillion in cash to pay a US liability $ 4 trillion. Paying for costly record keeping will not help governments to cover their liabilities. It will only increase budget gaps.
Anastasia Andrianova, who worked for Lehman Brothers before founding Akropolis, told Forbes that:
“ When an economic crisis occurs, the first thing that a state will do is tap into pension funds or reserves. Both public and private funds are raided. I’ve seen this happen firsthand, which was further reinforced by the global financial crisis of 2007. The fast points of attack are typically pension services. Pension payouts are cut first, affecting the most vulnerable people”
Cutting costs with Blockchain Technology
Larger populations and longer life expectancy will continue to emphasize the importance of a globally existing social benefit infrastructure. Blockchain technology can be an important cost cutting tool for governments that will not result in a lower level of service for the population as a whole. As tax revenues continue to decline on an inflation-adjusted basis, governments will need every advantage they can to maintain social order.
A failure to adopt practical solutions not only looks terrible, but can also accelerate the decline of existing government structures. The resources of DLTs are much broader than making pension payments, and if governments do not look for ways to be more efficient, they can also be replaced in the future.