The Netherlands is flexing its bureaucratic muscles to renovate a range of public services with blockchain, a decentralized digital ledger technology, which also constitutes an underlying algorithm of bitcoin and other cryptocurrencies.
Major government agencies here, including the Ministry of Economic Affairs and Climate Policy and the Ministry of Justice and Security, have launched dozens of pilot projects with private enterprises and universities to test how much blockchain can build trust and transparency of public services without traditional centralized data collectors and managers.
Building a manipulation-proof digital identity is one of the core projects. Other ongoing projects include establishing a blockchain network ensuring trusted transaction of subsidies, real estate registry and trans-border transport of toxic waste, to name a few.
Behind the Dutch government’s aggressive push is Prince Constantijn van Oranje, a reform-minded younger brother of the reigning Dutch king, Willem-Alexander. In a televised speech in May 2017, the prince called blockchain “a catalyst for change.”
Several Dutch officials told me that Prince Constantijn was a “vocal supporter” of blockchain-driven innovation and that his publicized advocacy had encouraged decision makers in public sectors to think of how to improve public systems with the new technology.
“Blockchain is a brand new technology. We are carrying out various experiments to learn what it is and how to apply and to where,” said Marloes Pomp, program manager for blockchain projects within the Dutch government.
“We started with small experiments. If they go well, we will apply it to bigger and more sensitive projects that can have far-reaching impact here and around the world.”
It remains to be seen if the Dutch government’s efforts will bear any tangible fruit. But it seems clear the Dutch government is considering blockchain as a key driver of self-innovation to bolster trust, transparency and efficiency of public and private services.
“If I can trust you, doing anything together is possible,” said Frans Rijkers, strategic adviser at the National Office for Identity Information under the Ministry for the Interior and Kingdom Relations. “Blockchain is a technology making it possible for people to trust those who otherwise are untrustworthy.”
The Dutch government is mapping out plans for a “blockchain revolution” with collective wisdom from public and private sectors.
In March 2017, it launched a public-private partnership, named the Dutch Blockchain Coalition (DBC), with a mission of testing the possibilities of blockchain, investigating legislative aspects and coming up with new agendas to discuss.
The coalition has 35 members ― five ministries, 15 private companies (from the financial services, insurance, logistics and energy sectors) and 15 universities and think tanks. Amsterdam-based international insurer ING, ANB AMRO bank, De Volksbank bank, energy company Alliander, Port of Rotterdam, Delft University of Technology and Tilburg University are among participating organizations.
The 35 members belong to 20 working groups, carrying out 35 pilot projects. The coalition’s 2018 budget is one million euros ($1.16 million), 25 percent of which comes from the state coffers.
Frans van Ette, a DBC manager, explains the coalition’s core projects. / Korea Times photo by Park Si-soo
“We had 25 members last year. The size (of the coalition) will continue to expand to explore more diverse areas,” said Frans van Ette, a DBC manager.
Asked why the Netherlands was enthusiastic about embracing blockchain, he explained the nation’s trade-driven economic structure.
“Our economy is propelled by trade, logistics, finance and food businesses, in which mutual trust and cooperation of involved parties are crucial,” Ette said. “We believe blockchain has the potential to make things better.”
The manager hinted at the Dutch government’s regulatory position on blockchain and cryptocurrencies.
“The government doesn’t tell people what they are allowed to do and not,” he said. “If a conflict happens between existing laws and ICO (initial coin offering), cryptocurrencies or blockchain, we talk each other and explain to narrow the (opinion) gap and work together to find a point at which the trouble can be settled. We also try to set the best position of the law and newly created values.”
Making “strong and reliable” digital identities is one of the coalition’s key projects. A technological prototype ― a smartphone app ― was made recently and the Dutch government plans to test it with selected people and municipalities to ascertain if”life without tangible IDs” can be realized.
In another trial, the Dutch government and its Canadian counterpart have agreed that from 2019 selected people of each country will travel between Amsterdam’s Schiphol airport and Toronto airport without passports.
“There is still a long way to go for its use in the real economy,” said Frans Rijkers, strategic adviser at the National Office for Identity Information under the Ministry for the Interior and Kingdom Relations. “But it doesn’t mean it’s a mission impossible.”
Here is another case reflecting Amsterdam’s enthusiasm in embracing blockchain and cryptocyrrencies: crypto ATM.
In June, Amsterdam’s Schiphol Airport installed a crypto ATM offering bitcoin and ethereum. The airport claims to be the first one in Europe to offer a crypto ATM service, which is on a six-month trial.
“Schiphol is constantly looking for ways to innovate and provide optimum service to passengers,” said Nicky Bresser, the airport’s manager of commercial services.
“With the ATM, we hope to provide a useful service to passengers by allowing them to easily exchange ‘local’ euros for the ‘global’ cryptocurrencies bitcoin and ethereum. That can be beneficial if, for instance, it’s not possible to spend euros in their home country.”
Schiphol worked with local software solutions provider ByeleX Data Solutions BV to install the machine.
The airport will review the ATM’s transactions in December to decide whether to install more of the machines.