Santa Cruz Adopts Blockchain for Govt Services

The County of Santa Cruz in northern California has become the latest local government to adopt blockchain technology for governmental services. At a meeting of the Board of Supervisors on April 25, 2023, members unanimously voted to move forward with implementing digital wallets for government services and official documentation purposes.

The white-label digital wallet will be powered by HUMBL and will launch a three-stage pilot program starting in July 2023. During the pilot period, beta testers, such as mobile users seeking access to government services like bicycle registration and RV parking registration, will be able to use the digital wallet. Other potential pilots include registration of park facilities, tracking volunteer hours, over-the-counter building permit distribution, and pet licensing.

Zach Friend, a Santa Cruz County Supervisor involved in the situation, stated that the value of digitizing paper documents, records, and services is an essential step for the convenience of Santa Cruz County residents and improving equity and access for the community.

Upon successful completion of the pilot, the county plans to provide a formal report and rollout plan by no later than September 2023.

The digital wallet project began to take shape in April 2022, following a collaboration between the Santa Cruz Board of Supervisors and HUMBL on the digital wallet technology infrastructure needed to begin a pilot program.

While local officials are pushing forward with the plans for a digital wallet, an open discussion forum on the county’s website revealed concerns from local residents. One commenter, Becky Seinbruner, asked to suspend further action and progress on the digital wallet developments. Seinbruner raised concerns over inappropriate use and sales of personal data by the infrastructure provider HUMBL.

During the pilot period, local officials will assess if users trust the underlying technology and understand what is happening “under the hood.” The county plans to provide a formal report and rollout plan for the digital wallet by no later than September 2023.

The adoption of blockchain technology by Santa Cruz County is part of a wider trend of governments turning to blockchain for better management of public records and services. By using blockchain technology, governments can create a tamper-proof and transparent record of transactions, leading to improved trust and efficiency in government services.

Blockchain also has the potential to reduce costs associated with traditional paper-based systems and the time-consuming manual processes that go along with them. Furthermore, it can provide secure access to information and services, thus improving equity and access for all members of the community.

Despite the benefits, concerns around privacy and data security remain. As seen in the case of Becky Seinbruner’s comment, some residents are worried about the potential misuse of personal data. To address these concerns, it is essential that governments work with trusted partners who have a strong track record of data security and privacy protection.

In conclusion, the adoption of blockchain technology by Santa Cruz County for governmental services is a promising development in the evolution of public services. By improving the efficiency and accessibility of services, governments can provide better value to citizens and drive growth in the local economy. As with any emerging technology, it is crucial to be mindful of privacy and security concerns, but with careful planning and execution, blockchain can become a valuable tool in modernizing government services.


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UAE’s Central Bank Completes Wholesale CBDC Pilot Program

The Central Bank of the United Arab Emirates (CBUAE) said on Wednesday that it has completed the first and the largest wholesale pilot of central bank digital currencies (CBDC) transactions.

CBUAE said it conducted the six-week pilot project through participation with other regulators, including the Hong Kong Monetary Authority, the Bank of Thailand, the Digital Currency Institute of the People’s Bank of China, and the Bank for International Settlements.

The UAE’s central bank said the pilot test took place on the “project mBridge”, which is a custom-developed distributed ledger technology (DLT) platform developed by the above five regulators (i.e., CBUAE, the Hong Kong Monetary Authority, the Bank of Thailand, the Digital Currency Institute of the People’s Bank of China, and the Bank for International Settlements).

Throughout the pilot project, 20 commercial banks in the four jurisdictions used the “mBridge” platform to settle different kinds of payments for corporate customers, focusing on cross-border trade. The commercial banks conducted over 160 cross-border payments and FX (foreign exchange) transactions totalling over Dh80 million ($21.78 million) over six weeks, the report said.

The development marks the first pilot use of wholesale CBDCs in the MENA region under the Project mBridge, as per the announcement.

Khaled Mohamed Balama, Governor of CBUAE, commented, “The mBridge reflects the leadership vision for the UAE to be one of the leaders in CBDC development and issuance and the preferred regional hub for advanced financial infrastructure, as well as for the CBUAE to be among the top central banks globally.”

The test comes as officials in the U.S. are expressing doubts about the country’s willingness to develop its own digital currency.

According to the latest statistics, 109 countries are taking initiatives to create a CBDC. 11 countries have fully launched a digital currency. 14 countries are in the pilot stage with their CBDCs and getting ready for the launch, one of which is the UAE.

Image source: Shutterstock


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Ukraine Plans to Pilot CBDC Digital Hryvnia for Salary Payments

Ukraine’s Ministry of Digital Transformation has announced plans to pay the national digital currency, central bank digital currency (CBDC), for its employees’ salaries.

In a recent interview with Ukraine media outlet TSN, Mykhailo Fedorov, minister of Digital Transformation, said his ministry plans to test out Ukraine’s CBDC, the digital hryvnia, implementing the electronic currency in employees’ salary payments.

Fedorov stated: “Frankly, as one of the first pilots, we have on the table the question of paying salaries to employees of the Ministry of Digital Transformation in electronic hryvnia.”

The minister stated that the effort to compensate its employees with CBDC would be possible once the sovereign digital currency is ready for testing.

Fedorov explained a need to test the CBDC to enhance its application and efficiency and therefore termed employee’s salary payments as a viable pilot scheme for the national digital currency.

Apart from compensating employees within the digital ministry with the digital hryvnia, the minister said that the pilot program would use the CBDC as a medium of payment for social benefits and government subsidies. However, Fedorov suggests that the initial rollout for the CBDC will focus on a small, controlled use case instead of being deployed for social payments.

The minister urges authorities to test the technology to collect user experience data and understand how it functions before applying the digital currency in the social sphere.  Fedorov stated: “We are studying the experience of other countries that have launched pilots or are trying to introduce similar electronic currencies.”

Besides efforts to issue a CBDC, the Ukrainian government also plans to integrate smart contracts to limit the misuse of government grants.

The Rise Of CBDC

Using national digital currency to pay salaries of government employees is a popular pilot implementation strategy for national digital currency projects.

Some countries (such as Bahamas, Cambodia) that have already launched their CBDCs implemented the strategy of paying state workers in the digital currency during the pilot implementation phase.  

In June, China, the pioneer in the CBDC space, tested its digital yuan in paying some of the government workers.

The Ukrainian government is moving forward with its CBDC plans. Early this year, the Ukrainian government tapped the Stellar Blockchain Network as a platform to build the national CBDC.

In January, Ukraine’s Ministry of Digital Transformation signed a memorandum of understanding with the Stellar Development Foundation to cooperate on several digital asset-related initiatives. Such projects involved helping Ukraine’s Central Bank in its CBDC efforts and assisting the country in developing infrastructure for modern virtual assets.  

Image source: Shutterstock


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