We’ve all dealt with government red tape and bureaucracy. We created new accounts for each department, verified our identity multiple times, and questioned why government services couldn’t share our data securely.
Liz Tanner has been Director of the Rhode Island Department of Business Regulation since 2017. Earlier this year, Governor McGee appointed her as Rhode Island’s secretary of commerce. When Liz joined the state, she set out to change the red tape and bureaucracy and improve Rhode Island’s ranking in business climate statistics. Nationally, Liz didn’t find inspiration from big states with more resources. In fact, with a few exceptions, states conduct business in the same way. Internationally, she is interested in Estonia, which is one of the first countries in the world to adopt and deploy blockchain technology in production systems.
Introducing blockchain technology to the government in an Estonian model
The Estonian model makes doing business with the government easy and frictionless. Using blockchain technology, citizens only need to enter their information once, and the same information will be available when interacting with many government agencies and departments, such as applying to universities or obtaining licenses or permits. Liz is passionate about bringing the Estonian blockchain experience to Rhode Island.
In 2017, the state proposed an RFP to explore the concept of bringing blockchain technology to the government. The response was unprecedented, with more than 60 ideas from more than 30 vendors covering a variety of businesses, from cannabis to licensing and licensing to healthcare.
Rhode Island selected Infosys Public Services to help simplify the process of opening a new business. However, in-depth research identified five independent state agencies involved in the process. Recognizing that long-term adoption depends on the success of the pilot, the scope of the project was narrowed to the Department of Business Regulation.
Initial proof-of-concept efforts focused on certified certified public accountants (CPAs) as a low-risk project that could demonstrate the technology.
Reduce multi-week processes to thirty minutes
Often, it is a tedious process for CPAs to renew their licenses in Rhode Island and certify their credentials. The blockchain pilot developed by Infosys Public Services drastically reduced time and allowed CPAs to keep their credentials in a wallet on their phone.
Obtaining a CPA license requires proof of academic qualifications, CPA exam scores, work experience, and proof of identity verification. Driver’s licenses verify identity and residency, employers verify certificates, and the Department of Business Regulation verifies all documents before issuing or renewing licenses.
The blockchain-based solution builds an identity blockchain network that digitizes and automates workflows, enabling the secure exchange of information between state agencies and citizens. In the future, CPAs will be able to initiate service requests (for example, to renew their CPAs license) with a simple interaction with any agency they have worked with in the past. This “primary agency” through the identity blockchain network works with the Ministry of Commerce Regulation to fulfill service requests. This solution eliminates the need for citizens (CPA request updates) to share information multiple times.
The Department of Motor Vehicles (DMV) also provides a listen-only node capability for identity networks. This will enable Rhode Island to develop other DMV use cases on this Rhode Island Identity Network.
Infosys Public Services uses Hyperledger Indy, tools and libraries to create and manage digital identities, and core blockchain standards to ensure data security. Hyperledger is built in such a way that it can be scaled in the cloud using Amazon Web Services (AWS).
This solution is very secure as all data of the individual is kept in the individual’s wallet and the user can control who and which parts of her/his data can be accessed. Personally identifiable information is never stored on the ledger; verification is only requested through a decentralized identifier representing the credential.
CPA is one of the few professionals who can practice interstate. However, they must provide a valid license to provide services to customers. With this solution, CPAs can verify their credentials quickly, securely and easily using their digital wallet. Several state and national organizations are exploring ways to adopt blockchain as it greatly simplifies the credential verification process.
Three key technology components of the solution
A blockchain consists of interconnected blocks of secure information. The chain forms an immutable ledger, distributed across participating nodes. The first element of the solution is digital identity. Today, every document that identifies us, like a driver’s license or passport, is controlled and owned by the government, whether we like it or not. Blockchain digital identity technology establishes a “self-sovereign identity” (SSI), which transfers identity ownership from the government to the individual.
SSI transforms identity and credential management from a centralized system run by governments and all associated silos to a peer-to-peer model using public key cryptography, decentralized identifiers on the blockchain.
The second element is Hyperledger Indy, a distributed ledger built for decentralized identity. Hyperledger Indy comes with tools, libraries and reusable components for creating and using independent digital identities on the blockchain.
Finally there is Hyperledger Aries, which is the client side of the decentralized identity application. Aries is the client layer in Hyperledger Indy that facilitates interaction with other platforms.
Talking to a state agency was a first for me. But here’s the cool part: Rhode Island and their partner Infosys Public Services are doing it, not talking. I know the choice of the CPA digital certificate is certainly not sexy, but it is a testament to the technology. The importance of building a base is huge and could lead to an overhaul of how business is done with the government.
The state of Rhode Island and the Infosys Department of Public Service deserve credit for offering a pilot blockchain program during the pandemic, which is heroic. It is also important to note that this project would not have happened without the strong leadership of former Governor and current Secretary of Commerce Gina Raimondo, who understands the possibilities and understands the technologies that will help move the project forward . When it finally came time to push the pilot, Lieutenant Governor, now Governor Dan McKee, offered high-level approval.
Going forward, with the new funding, Liz hopes to revive her original desire to build a new business by providing information in one place. Today, when you form an LLC or corporation, you do it in multiple areas of state government, including four or five different sites. In the future, citizens will use a single data entry site to enter information once and go from there to where it is needed.Now That very sexy
Through the blockchain initiative, Rhode Island residents and businesses will establish a digital certificate that can be used on various government and state websites. Liz is reluctant to call it a blockchain because it is related to cryptocurrencies. Liz describes it as “a way to keep information in a very safe place so you can reuse it”. I hope other states follow Rhode Island’s lead, which is a worthy goal.
Note: The authors and editors of Moor Insights & Strategy may have contributed to this article.
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Patrick Moorhead, Founder, CEO and Principal Analyst of Moor Insights & Strategy, is an investor in dMY Technology Group Inc. VI, Dreamium Labs, Groq, Luminar Technologies, MemryX and Movand