Voting, national crypto, and regulation

Before this summer, the polls will open three times; for the elections of the Provincial States, the European Parliament, and the Water Boards. In my previous posts, I discussed how many local governments in the Netherlands are experimenting with blockchain technology and are at the forefront compared to the rest of the world. Our national government also wants to be at the forefront, but especially in the field of regulations regarding cryptocurrency. There are three ways in which our Dutch government can lead in the field of blockchain technology:

Vote With Blockchain

Anno 2019, despite our insanely technologically-developed country, we still vote by means of a red pencil and a printed ballot. In my home province Limburg alone, four municipalities had to recount the votes during the municipal elections last year, for which no fewer than 50 civil servants had to work two days extra in my hometown of Maastricht. Although “only” 29 errors were discovered, this eventually led to the CDA having to hand over a full seat to their political opponents, D66.

The voting process is the heart of democracy and, in my view, this should really go as smoothly as possible. In various other countries, especially in developing nations, we still witness a lot of fraud and corruption during elections; something that can be prevented with blockchain technology. In addition, results can be announced and made transparent much quicker to increase confidence in the process itself.

Sierra Leone was the first country to put elections on the blockchain and several other countries followed this up with successful tests. This includes the United States, Switzerland, and South Korea. More than 30 countries, such as Japan, Spain, and Ukraine, are currently investigating whether they can enable voting via the blockchain.

Researchers do not agree yet whether implementing technology is a good idea. One study indicates that the turnout will increase, but Radboud University’s advisory report to the House of Representatives mainly predicted major disadvantages. Disadvantages that already have been removed by applications from various companies such as Kaspersky (the well-known virus scanner), FollowMyVote, Voatz, and Agora.

Recent research by the Swiss government showed that almost 80% of the population would like to vote via the blockchain and that only 2% were against it. Hopefully, the red pencils in the Netherlands can soon be added to the museum of democracy!

A Dutch Cryptocurrency

Whereas various governments are trying to ban cryptocurrencies from their countries, by banning trade and advertising cryptocurrencies, the head of the International Monetary Fund (IMF) advocates that central banks should seriously consider introducing their own cryptocurrencies in order to make payments faster and to run more safely.

In 2014, an unknown Icelandic resident already introduced his Auroracoin, which should replace the national currency. In 2015, the governments of Tunisia and Equador launched their own cryptocurrency and several other countries are currently experimenting with it. This is not entirely uncontroversial; the Venezuelan government launched the “Petro” to, among other things, circumvent the US sanctions against the country. It appears that Russia, for the same reason, wants to introduce its own “CryptoRuble”.

In Europe, Estonia wanted to lead the way with its own “Estcoin”, but was recalled by the European Central Bank claiming that “no Member State may introduce its own currency in addition to the Euro”. Although enthusiasts have already introduced the Dutch cryptocurrency “Gulden”, it will take some time before the Dutch government will introduce its own variant.

Much Needed Regulation

According to a recent proposal by the Dutch Minister of Finance, Wopke Hoekstra, the Netherlands wants to play a pioneering role in the field of cryptocurrency in Europe, especially in the field of buying and selling cryptocurrency and setting up a so-called Initial Coin Offering.

It would be good for the Dutch government if they went a few steps further and immediately take a wider view regarding general laws and regulations concerning blockchain technology. A large study by Deloitte revealed that uncertainty and lack of clarity about regulations is currently the main reason that organizations have yet to embrace blockchain. Fortunately, the EU is already working hard to make the GDPR legislation blockchain more friendly, yet there are still many questions about the national legal frameworks for implementation and the use of technology by organizations.

The possibilities are endless for governments with blockchain technology. From practical applications, such as collecting taxes and putting food logistics on the blockchain in England and India to prevent waste, to wild ideas of a “Futarchy” in which forecasting markets such as Augur determine which government policy has the most effect. Every week I read about successfully-completed pilots from governments and cool new ideas that are being introduced. Hopefully, we can replace the pencil with a retinal scan at the next election!

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.