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US Government Spending on Blockchain Expected to Greatly Increase by 2022

April 22, 2019
James Hall


US Government Spending on Blockchain Expected to Greatly Increase by 2022

One area of blockchain integration that appears ready to boom involves government adoption in the United States. Nextgov, citing a report from IDC Government Insights, states that “the federal government’s spending on blockchain will likely increase from $10.7 million in 2017 to $123.5 million in 2022.” For state and local governments, the report expects a rise from “$4.4 million in 2017 to $48.2 million in 2022.”

Shawn McCarthy, IDC’s research director, is quoted as stating, “We believe asset management, identity management, and smart contracts will be the leading blockchain solutions for government.” McCarthy continues, “Early spending will focus on supply chain and asset management solutions, while spending in later years will expand to include more identity management and complex financial transactions.”

Nextgov cites a prediction that blockchain will become “a reference point in trade legislation going forward.” The report states, “It can be used to identify origins of shipments, quality of goods, tariffs paid, and more…A few years from now, blockchain is likely to be implemented as a standard feature for some types of authorized international trade and also as a standard for many types of government procurement.”

Much of the talk of blockchain technology does not differentiate between public and private blockchains. The bitcoin blockchain, for example, is fully transparent and accessible to anyone (permissionless access) whereas private blockchains, such as the Linux Foundation’s Hyperledger Fabric, are not transparent and accessible to the public (permissioned access). The report addresses the use of private and public blockchains, stating:

“Most industries chose one of two approaches for their implementation: private blockchain to ensure security or public blockchain to ensure transparency… But neither of those is a perfect fit for government, which often needs to be both secure and transparent. Thus a hybrid blockchain approach may find a receptive audience at government agencies.”