Since governments usually don’t take the lead when it comes to innovation, it is very special to see that local governments in the Netherlands are already experimenting extensively and have implemented several blockchain technologies. Mutual trust is pivotal for this technology and, in addition to ownership, this will be organized significantly better with blockchain technologies. All of this can lead to groundbreaking innovations for local governments. As diehard crypto enthusiasts have a more libertarian idea in mind whereby the government is bypassed by technology, they are skeptical about the idea where local governments still play a role in developing and adopting the technology. Experts even anticipate that national currencies will be replaced by cryptocurrencies in 2030.

Whereas in recent times, governments have mainly been busy regulating both blockchain and cryptocurrencies (especially to combat fraudulent ICOs), the government is currently working at all possible levels to see how they can incorporate the technology itself. Countries like Sweden, Venezuela, Canada, China, Japan have successfully placed services on the blockchain and Russia is even considering issuing its own cryptocurrency.

“What I see here I have not seen anywhere else in the world. The Netherlands is further than well-known blockchain hubs such as Dubai and Singapore,” blockchain guru Vinay Gupta recently said. I have put a number of inspiring developments together.

Administrative Processes

Many municipalities have predominantly started implementing blockchain to reduce their own administration costs. Apart from bringing the costs down, this will also contribute to a strong improvement in transparency and a significant reduction in the bureaucracy of the organizations. A Belgian director recently said,

“We are able to automate all administrative processes via the blockchain that we cannot abolish. We no longer need civil servants behind the counter but can send them out, into society, where their presence is needed the most.”

The most extraordinary applications in this field are already being tested, such as the “DIY marriage/divorce”, that allows for getting married or divorced without the intervention of an official. The Municipality of Utrecht has put the data of its citizens on the blockchain to enable all possible affiliated chain partners, such as schools, libraries, and churches, to adjust the data and always have the most current version available. The data is always up-to-date and is better protected by the predefined permissions to access.
 Digital information can also be significantly better authenticated and 100% securely saved. This includes invoices, permits, subsidies, etc.. This prevents the fraud that commonly occurs these days, and does away with the need for citizens and entrepreneurs to visit the town hall for every application. Haarlem Municipality is currently conducting a pilot project.

The Municipality of Alphen aan den Rijn has already placed elements of its tenders on the blockchain. When a lamppost fails, a work order is automatically generated and interested parties can register for this project automatically. The submissions are checked by means of a smart contract and the winning party is allowed to start the assignment immediately. Once the lamppost recognizes that the problem has been solved, the company will be paid immediately. It is a process that saves a lot of paperwork and time across the board.

Rotterdam Municipality has placed its real estate contracts on the blockchain, which allows them to conclude leases faster and easier, monitor payments and to conduct management more transparently.

Parking is another example of services that can be arranged and maintained much more efficiently. An app facilitates both the purchase of a card and searches for available parking spots. This solves the large-scale fraud with parking permits for disabled people instantly as enforcers can quickly verify the validity of the permit based on license plates. The cities along the Drecht river (Dordrecht, Papendrecht, Sliedrecht, and Zwijndrecht) are currently conducting a pilot project.

Social Domain

The entire care chain is also expecting major changes, such as with the PGB. This often involves various parties in the value chain, all of whom have their own decentralized system. Using one central, shared database not only reduces the number of errors made when transferring data but also speeds up the various processes involved considerably. Amsterdam Municipality is busy working on a SmartPGB (Personally Allocated Budget), which allows patients to purchase their own care themselves through predefined ‘smart contracts’. The blockchain validates this with an agreement and makes payments automatically, thereby making declarations superfluous and reduces fraud greatly.

Zuidhorn Municipality has, for example, placed the validation of its “child packages” on the blockchain and the Groningen Municipality has introduced the “Stadjerspas” which allows people with a low income to receive discounts at the many dozens of organizations in the city. The organizations can check immediately whether the person in question is still entitled to the discount and can record the discount given on the blockchain.

Several municipalities are also busy placing “kitchen table discussions” on the blockchain. This will make it easier to see who has had an appointment with people with a specific need for care, without disclosing substantive details. This assists people in debt counseling too as the entire payment chain is placed on the blockchain. As payments are being made via the blockchain, all parties in the chain (health care providers, energy suppliers, home rental agencies) receive their payment before the remaining money is transferred to the client.

In addition to getting clearer where possible problems arise, the deadline for applying for a 2-month allowance expires and debts can even be prevented.

Voting

Unfortunately, the technology does not yet make it possible to fully digitalize voting. Nevertheless, Groningen Municipality had a national scoop when it counted votes digitally. This took place at five polling stations during a recently held referendum. In Sierra Leone, all votes were even counted using the blockchain and the US state of West Virginia is already experimenting with voting via an app for soldiers stationed overseas. By means of face recognition, the identity of the voter is verified and the vote is kept anonymous on the blockchain.

Identity

Various municipalities are already busy placing the identity of its residents on the blockchain. This allows the resident to share the (previously verified) identity data and information with any desired organization. In addition to the aforementioned improvement of communication between chain partners that provide care, this real-time shared information can obviously also be used for all other possible chain processes allowing them to be set up a lot faster, be more transparent, more efficient and more secure.

The Delft University of Technology has already developed a first prototype that will place one’s passport and driver’s license on the telephone. A trial with this “Trustchain” will soon start in several municipalities.
 
 The possibilities are endless and the government realizes this in a very inspiring way. I am already looking forward to the actual implementation of the various projects in the months to come!

Jan Scheele is active in the web3 (blockchain, crypto, NFTs, DeFi) industry since 2013. Besides (former) CEO of a web3 scaleup and founder of an advisory boutique (working for governments, family offices and several multinationals), he is Digital Leader at the World Economic Forum and Board Member at the Blockchain Netherlands Foundation (BCNL). He is writing, consulting, speaking and training regularly about everything web3, all over the world. Furthermore, he is currently finalizing his book about the rise and global impact of blockchain technology.