UK Government Trials Blockchain Welfare Payments System

The UK government’s Department of Work and Pensions is spearheading an experiment in which a blockchain system is used to distribute welfare payments.

The department has partnered with UK-based banking institution Barclays, the UK arm of German energy firm RWE, fintech startup GovCoin and University College London.

The project was unveiled during a payments conference earlier this month during a talk given by David Freur, state minister for welfare reform. As quoted by regulatory data provider PaymentsCompliance, Freud suggested that the project's success or failure would be determined by the impact on those receiving welfare payments.

Freud reportedly told attendees:

"We started a small trial in the north west, designed to see if we can send welfare payments using this technology, and more importantly, to see if people reliant on welfare payments would benefit from this approach."

The system is said to entail a mobile app and a blockchain system that records payments sent or received by welfare recipients.

Notably, the trial was foreshadowed in a major report released by the UK Government Office for Science in January, which called for the government to conduct experiments using the technology.

The report directly refers to a hypothetical "system to manage welfare support payments for the Department for Work and Pensions", going on to highlight its potential security needs should it be built.

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