How governments will use cryptocurrency to make your life better
In the wake of the SEC suing Kik over its ICO, and while major governments worldwide are still trying to figure out how to approach cryptocurrencies, a quantum leap was made by a municipality in Canada that will undoubtedly make our lives better when it comes to real-world cryptocurrency and blockchain adoption.
Earlier this year, our team at Coinberry helped launch a cryptocurrency-to-tax payment partnership as a new way for the Town of Innisfil residents to pay their tax bills. It’s the first of its kind in Canada and was unanimously voted in by the city council.
Here’s why it’s important, and how governments will continue to adopt this technology – affecting all of us in the process – moving forward.
Savings coming to a city near you
Regardless of your position on tax, we all know that municipalities are tasked with providing necessary services like fire, police, and ambulance. They have to ensure that roads get fixed and community centres get built, and they have to pay employees and pay for the costs normally associated with running a government.
Ensuring that the budget is balanced and primary services are delivered are at the core of a municipality’s responsibilities. When it comes to allocating funds to spend on these services – they’re limited naturally by both the funds they have and the funds they can raise. This is standard with any government.
Unlike a business, however, they cannot sell a product or service, sell stock on a public market, or raise capital from VCs; any funds raised typically come through taxes or the issuance of bonds – both of which come with their own set of complications. Funds that are raised, are often earmarked for fixed costs, and thus services and projects that can’t feasibly be funded get cut.
But what happens when a municipality can implement a technological solution – in a simple and easy way – that can drive significant cost savings?
What happens when those savings amount to tens of thousands, or hundreds of thousands of dollars each year, and all of that savings can go directly to the municipalities bottom line?
This is when governments of all sizes start to pay attention, and this is exactly where Innisfil leveraged our technology to push forward.
Simple savings as a start, complex solutions as a finishing point
Simple savings are the start of the blockchain adoption that will continue to happen amongst governments.
Unfortunately, we’ve been seeing much of the opposite happen when well-meaning companies attempt to convince large enterprise, or government, to adopt blockchain. Often, the blockchain solutions and implementations proposed to enterprise and government, require complete overhauls of technology or rely on a complex change to be implemented by the organization at hand.
But governments (and large enterprise) don’t work like that.
Simplicity is critical when it comes to spearheading adoption.
Take as an example, the blockchain technology solution Coinberry implemented for Innisfil. Residents are able to pay their taxes in cryptocurrency. That cryptocurrency isn’t held by the government, (due to the current classification of cryptocurrency there are legal complications with that), but is instantly transferred to the local fiat currency (Canadian dollars) that the government does hold. It’s simple, it works, and it saves Innisfil on transaction costs while providing more options to pay taxes to the Town’s residents.
Are there more complex solutions that we could provide for the government? Sure.
Could we revolutionize various aspects of internal payment, payment processing, and more? Naturally.
But one step at a time! Governments need to see small, simple successes before they trust the blockchain ecosystem to handle more.
Simplicity is the start. Complex solutions are sure to follow.
Scaling up solutions, scaling up benefits, the way forward
Other jurisdictions have already approached us with more complex implementation ideas. We’re seeing a wave of interest from governments in Canada that I believe will continue to build momentum.
Scaling up is not limited to Canadian municipalities by any means either. Governments around the world are all keeping a lookout for successful implementations of technology that can help them drive more bottom line revenue.
While we’ve helped the first Canadian jurisdiction to adopt such an undertaking, two municipalities in the United States have also implemented similar payment systems. In 2018, both the state of Ohio and Florida’s Seminole County began accepting payment for government services.
The trend will continue. As we scale up to larger and larger cities, we will see governments looking to implement blockchain technology in multiple areas that will result in savings.
It starts with small, nimble governments and grows from there. These small governments will implement simple payment solutions to save on fees, and then realize that there are dozens of areas for efficiency and cost improvements with blockchain technology.
It shouldn’t be long before ‘Pay by Cryptocurrency’ is an option on your city’s website. As this happens, vendors, employees, and organizations that work with governments will start to look to blockchain technology as a way to derive their own cost savings and efficiencies.
Blockchain adoption is happening at core levels of our society.
The question you should ask is not ‘will this tremendous initiative come to my community?’ but rather ‘how soon will it be here?’