Tracking grants by blockchain
The Treasury Department is finishing up tests of a blockchain-based letter of credit capability — its latest push to discover how the distributed-ledger technology can streamline operations.
The program tokenizes the details and payments in electronic federal letters of credit sent out from the National Science Foundation to grant recipients, Craig Fischer, innovation program manager at Treasury, said at a recent conference on financial modernization. Now, rather than having to rely on regular reporting from the prime and sub-grantee recipients, NSF can use the blockchain to track the grant payments and ensure that the terms of the grant are being followed and that the whole transaction is more secure. Grantees would be relieved of some of their reporting requirements.
The blockchain-based letter of credit enables peer-to-peer funds transfers, according to Fischer. Grant recipients need an electronic wallet associated with a bank account to receive the tokenized letter, he said, and access to the letter can be role-based for security, he said.
Fischer said the innovation group has been working with San Diego State University, Duke University and NSF on the program since September. It is set to conclude at the end of January.
The department has been investigating ways to leverage blockchain for a couple of years. In 2018, it worked on a pilot project to develop a prototype blockchain to manage physical assets (such as computers and cell phones), noting the technology has “great potential for streamlining burdensome reconciliation operations that are involved in many financial transactions.”
This article was first posted to FCW, a sibling site to GCN.
Mark Rockwell is a senior staff writer at FCW, whose beat focuses on acquisition, the Department of Homeland Security and the Department of Energy.
Before joining FCW, Rockwell was Washington correspondent for Government Security News, where he covered all aspects of homeland security from IT to detection dogs and border security. Over the last 25 years in Washington as a reporter, editor and correspondent, he has covered an increasingly wide array of high-tech issues for publications like Communications Week, Internet Week, Fiber Optics News, tele.com magazine and Wireless Week.
Rockwell received a Jesse H. Neal Award for his work covering telecommunications issues, and is a graduate of James Madison University.
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