The Government of Chile, at the Forefront of Innovation with its New Blockchain Project

Contxto – Who said governments are old fashioned and inefficient?

Well, almost everyone. But the Chilean Government is taking action in order to change that perception.

According to its recent press release, the General Treasury of The Republic (TGR) launched a new blockchain program, in collaboration with the government’s technological arm, División de Gobierno Digital, to better manage tax collection.

The purpose of such project is to eliminate money transfer discrepancies between the municipalities and institutions, and the payment processors, aka the banks.

Usually, when a citizen pays taxes or any patent fee, the bank transfers the money to the municipality, while the TGR merely observes the transaction. However, at the end of the month, when the three parties have to balance the accounts, there are some small differences between one another.

As Clear As Water

Blockchain technology, as many of you may know, works as an incorruptible and transparent system. The transactions take place on a “public ledger” recording every single block. That way anyone could trace where the money is, making it inalterable.

The program’s pilot started in October last year, and it was officially launched in December.

The Government aims to eliminate balance differences, as well as payment processing time. This will help not only the institutions, but also citizens to cut down transactional costs.

Way to go, Chile! We hope other Latin American governments follow through.

– VC