Treasury tests blockchain-based grant tracking
- By Mark Rockwell
- Jan 10, 2020
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The Treasury Department is finishing up tests of a blockchain-based grants payment capability in its latest effort to discover how the technology can push more efficiencies into its operations.
The Treasury Department, said Craig Fischer, innovation program manager at the agency, is about to complete a proof of concept program for a blockchain-based letter of credit for federal grant recipients.
The program, Fischer said in a presentation at a recent conference on federal financial systems modernization, tokenizes electronic federal letters of credit sent out to grant recipients to help track the grant payments made to those recipients, as well as make the transaction more secure. The tokenization allows the agency to track the flow of grant money from federal coffers to grantees. Instead of an actual cash exchange, the token is a representation of the payment that can be tracked more efficiently, with associated data including recipient identification, grant amount and key dates like when it was awarded, he said.
The blockchain-based letter of credit provides peer-to-peer transfer to prime and sub-grantees, according to Fischer. Grant recipients would have to have an electronic wallet associated with a bank account to receive the tokenized letter, he said, and access to the letter can be role-based for security. "This isn't the Bitcoin network, where everything is visible" to everyone, he said.
Fischer told FCW at the modernization event that his innovation group has been working with San Diego State University, Duke University and the National Science Foundation on the program since September. It is set to conclude at the end of January.
The department has been investigating ways to leverage blockchain for a couple of years. In 2018, it worked on a pilot project to develop a prototype blockchain to manage physical assets (such as computers and cell phones), noting the technology has "great potential for streamlining burdensome reconciliation operations that are involved in many financial transactions."
Mark Rockwell is a senior staff writer at FCW, whose beat focuses on acquisition, the Department of Homeland Security and the Department of Energy.
Before joining FCW, Rockwell was Washington correspondent for Government Security News, where he covered all aspects of homeland security from IT to detection dogs and border security. Over the last 25 years in Washington as a reporter, editor and correspondent, he has covered an increasingly wide array of high-tech issues for publications like Communications Week, Internet Week, Fiber Optics News, tele.com magazine and Wireless Week.
Rockwell received a Jesse H. Neal Award for his work covering telecommunications issues, and is a graduate of James Madison University.
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