The U.S. Department of the Treasury, which manages government revenue, is testing blockchain technology for tracking federal grant payments.
The department is about to complete a proof of concept program for a blockchain-based letter of credit for grant recipients, Craig Fischer, innovation program manager at the Treasury, said at a recent conference, as reported by Federal Computer Week (FCW) on Friday.
The trial program tokenizes letters of credit to track the flow of grant money from federal reserves to grantees, per the report. Tokenization helps identify grant recipient, grant amount and key dates like when it was awarded, said Fischer.
He added that grant recipients would need to have an electronic wallet associated with a bank account to receive a tokenized letter of credit. Its access, however, will be limited. "This isn't the Bitcoin network, where everything is visible" to everyone, he said.
The Treasury Department is working with San Diego State University, Duke University and the National Science Foundation on the trial program since September, and it is expected to conclude at the end of this month, per the report.
This is not the first time the department has been exploring blockchain tech to improve its operations. In 2018, it worked on a pilot project to develop a blockchain-based prototype to manage physical assets such as computers and cell phones.