Governments Quickly Changing Their Tune On Blockchain

Summary

• All over the world, governments are seeing enormous potential in enterprise blockchain applications.

• Rewards programs joining the crypto ecosystem?

• The cryptocurrency ecosystem is not winner-take-all.

All Over The World, Governments Are Seeing Enormous Potential In Enterprise Blockchain Applications

Go back five years or so and you’d be hard-pressed to find any government endorsing blockchain technology, and many were (and still look to be) openly hostile to cryptocurrencies. That posture is now shifting—quickly.

An hour-long TV special aired in China last week, extolling the virtues of blockchain and claiming that its value is “ten times more than that of the Internet.” To me, that does not sound like a country intent in keeping up its ban on cryptocurrencies. And contrary to what many Westerners believe about China’s crypto-hostility, I’ve talked to a number of investors in China, Singapore, and Hong Kong who all have said that crypto/blockchain is alive and thriving in China. In my view, China is likely to re-emerge very soon as a big player in this space.

Moreover, proposed government blockchain initiatives now run the gamut, with objectives as diverse as preventing corruption in public sector finance (Italy), streamlining land registries (Netherlands) and managing customs controls (South Korea).

Where governments used to openly dismiss blockchain, they are now seeing potential benefits in its traceability. They have come to understand that it is not necessarily the anonymous, shady underworld they thought it was. The more they explore its potential, the more use cases they are finding, particularly for blockchain enterprise applications.

And now that they’ve stuck their toe in the water, I don’t believe it will take long for them to see the potential benefits of blockchain-based currency systems—i.e., “cryptocurrencies.” There is hardly any large-scale adopter that’s larger than a government. So this slow coming-about of the ship of state is potentially a huge development for blockchain technology applications, manufacturers, and implementers.