The United States Government Accountability Office (GAO) has submitted that blockchain technology can improve several government agencies’ processes.
GAO made its stance known in a July 11 report to a congressional request, noting that a blockchain integration by the Small Business Administration (SBA) would offer a range of benefits. The 10-page report, titled “Small Business Administration: Exploring Potential Use Of Blockchain,” highlighted several ways for the SBA to leverage blockchain technology.
Small Business Administration: Exploring Potential Use of Blockchain https://t.co/rJ4e8OTsc8
— U.S. GAO (@USGAO) July 11, 2023
The GAO noted that two of the SBA’s programs have been plagued by delays in collecting and analyzing information from small businesses. Between 2016 and 2021, the SBA was behind its schedule by a staggering 16 months, which the GAO says could be resolved using blockchain.
“These include using a blockchain-based ledger to expedite SBA’s reporting to Congress, assist in real-time data collection for determining program participants’ eligibility, and facilitate program oversight,” the report read.
Participants will use blockchain to input their data in a standardized format, eliminating the need for manual verification. Furthermore, the GAO stated that blockchain integration would improve “communication and timeliness” in the SBA’s Disaster Loan program, allowing users to view real-time information on their applications.
“Experts also noted that this blockchain solution could provide the programs with a better audit trail, including the benefit of a built-in time stamp system,” the report noted.
The report noted that the inherent characteristics of immutability and transparency would be instrumental in reducing fraud risks in loan programs for small businesses. It suggested that loans will be stored in blockchain and necessary details may be “verified by trusted sources.”
For all its benefits, the report highlighted several downsides associated with relying on blockchain. GAO stated that blockchain would be unable to address fraud stemming from lender service providers or solve burdensome documentation issues or changes of loan officers.
Despite the report, the SBA has not confirmed whether it will be pivoting its processes to blockchain in the future. GAO arrived at its conclusion through several initiatives, including a virtual panel discussion, a performance audit of SBA’s initiatives, and the integration of blockchain by other government agencies.
Attempts at exploring blockchain
Several U.S. agencies have dabbled into blockchain in search of new ways to improve their processes. The Customs and Border Protection (CBP) launched two blockchain proof-of-concept (PoC) to explore the use of the technology in determining the validity of imported goods and to streamline the processing of trade-related documents.
The U.S. Treasury experimented with blockchain to track government-issued mobile phones, while the General Services Administration turned to the technology to automate its contract review process. While no U.S. government agency has fully pivoted to blockchain, South Asian countries are incorporating the technology en masse to close the technological divide.
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