Blockchain technology: Challenges and opportunities in public finance

Abstract

Purpose: This article aims to analyze pioneering public finance initiatives based on blockchain technology, identifying the Brazilian context amid the international. Additionally, this study seeks to present opportunities for blockchain technology applications and the challenges encountered for their expansion. Originality/value: Few studies have covered the public sector, especially public finance, despite using and testing this technology in different areas. The development of these innovative applications is limited, particularly in Brazil. Design/methodology/approach: Public documents, such as reports and official websites of public agencies, associations, and institutions, were identified and selected from the unit of analysis "pioneering public finance initiatives based on blockchain technology." Findings: Blockchain technology has been used in government projects related to research, identity, economic development, and financial services, among others. Blockchain initiatives have been led by Brazil's financial, technology, and education/media sectors. Finding technology applications in public finance was one of the difficulties in the research. The number of projects in this category involving blockchain and the public sector is scarce in Brazil and internationally. However, this scenario has shown signs of change. Although reduced, public sector participation has increased in recent years. Blockchain has much to offer the public finance sector, but governments have been cautious and insecure about introducing the technology. It happens because of uncertainty about whether the technology is developed enough to withstand critical problems in the public system or what unique issues could arise from that technology.