Blockchain for public finance

Applications in capital markets and beyond

What should a well-designed public finance management system do? At its simplest, a PFM system should ensure that funds reach their intended recipients and are used for their intended purpose. And it must give the central budgetary authority accurate and regular reports of how its resources are being used, providing it with the information necessary to formulate and design fiscal policy.

The advent of digitalisation promised simplification and efficiency. However, since each entity involved in the finance management and budget delivery process uses their own systems, the consequence is often a huge duplication of effort — financial and nonfinancial reporting conducted anew at every level, requiring manual reconciliation. This duplication wastes time and resources. A more automated process would not only cut down on this, but also reduce the incidence of costly mistakes. A key challenge in the construction of an efficient PFM system is to address these problems.

Thanks to the sustainable finance movement, capital markets have become an important tool in the incentivisation of good behaviour in both the public and private sectors. The push for enhanced visibility on the use of funds began there with investors putting pressure on the recipients of their money to uphold these ESG standards. Meeting these demands for visibility requires a greater degree of transparency and oversight over how funds are spent.

Enter your details to download the report

In collaboration with:

EY logo better