japan to test blockchain for government contract system

Chuan Tian (@Tian_Coindesk) | Published on June 30, 2017 at 16:15 BST | Business News, Asia-Pacific, Security

Japan is reportedly looking to integrate blockchain into its online systems for accepting government contract bids.

According to Nikkei Asian Review, the Ministry of Internal Affairs and Communications, who oversees the Japanese administrative system and manages local governments, will test a blockchain-based system for processing government tenders in the fiscal year starting from this April through March 2018.

In the tendering process, governments solicit bids for contracts from vendors, collecting a swath of information from those companies as they assess whom they'll award projects. Japanese officials want to see if blockchain can help improve the efficiency of existing processes by using the tech to connect the government offices that possess the required information. In this case, blockchain would form part of that back-end system for sharing data between agencies, if implemented.

Japans's government procurement market amounts to more than $600bn annually – an amount worth 16.2% of the country's GDP, and 38.3% of its total public-sector expenditures – according to research from the Organisation for Economic Co-operation and Development.

The focus on procurement forms part of a broader strategy to incorporate the tech in e-governemnt systems, according to Nikkei. Future plans are said to include sharing some of the findings of the trial with private-sector partners.

Japan isn't alone in testing this use case area. As CoinDesk reported earlier this month, the US General Services Administration is seeking prototype proposals in a bid to see how blockchain could improve its contract review process for IT vendors.

Japanese flag image via Shutterstock