Application of Blockchain in State Management: Balancing Benefits and Operational Risk

On October 31st, the Ho Chi Minh City Department of Science and Technology organized a seminar titled “Application of Blockchain Solutions in State Management” to promote the deployment of digital transformation, encompassing the digitization of daily tasks within government agencies and enhancing the effectiveness of legislative document construction through soliciting contributions from civil servants and citizens.

Mr. Le Thanh Minh – Deputy Director of the Ho Chi Minh City Department of Science and Technology, mentioned that blockchain technology is a priority for the city’s research efforts as part of its digital transformation, specifically focusing on applying blockchain solutions to build a comprehensive platform for collecting, managing, and synthesizing feedback on documents.

As per the city’s request, the feedback collection software system must operate across multiple platforms and devices. Each individual providing feedback at various government agencies will be issued a certificate, detailing the feedback results, the specific feedback process, the executing unit, and the corresponding time. The city proposes applying blockchain technology to ensure data reliability, reduce efforts in the feedback aggregation process, and enhance accuracy in verifying feedback information for each document.

Participating in the seminar as an expert contributing to the development of this system for Ho Chi Minh City, Mr. Tran Dinh, Head of the Fintech Application Committee of the Vietnam Blockchain Association, shared insights gained from countries that have employed blockchain in building digital governments and facilitating information exchange among agencies and leadership levels.

Notably, the experience from Estonia, a Northern European country with a population of around 1.3 million but a GDP exceeding 38 billion USD in 2022. Estonia consistently ranks among countries with a high GovTech Maturity Index (GTMI), which assesses a nation’s public sector capability in leveraging technology to provide better services to citizens.

According to PwC, 99% of public services in Estonia are offered electronically. All state-related activities – excluding marriages, divorces, and real estate transactions – can be conducted digitally.

Regarding data sharing between the public and private sectors, Estonia uses the X-Road platform, an open ecosystem providing unified and secure data exchange, the backbone of e-Estonia, allowing the national public and private electronic service information systems to link and function harmoniously.

Mr. Tran Dinh emphasized the importance of assessing the suitability of applying blockchain in each specific case, he highlighted  “Maintaining a blockchain system is resource-intensive and costly. Therefore, more discussions, research promotion, and development of GovTech and RegTech groups are necessary. Strengthening collaboration among state agencies is vital before concluding whether blockchain is suitable for the feedback system Ho Chi Minh City is constructing,” 

Mr. Ly Minh Tuan, Head of the Information Technology Department at the Ho Chi Minh City Department of Information and Communications, acknowledged the contributions from the Vietnam Blockchain Association. He mentioned that Estonia’s X-Road platform has been referenced and studied for implementing an interconnectivity architecture between provinces and cities. Mr. Tuan also agreed on the need for further research, experimentation, and narrow-scale application to assess the feasibility and risks of blockchain-based systems, emphasizing the necessity for input from experts in this field.