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Blockchains: Ukraine’s Solution to Ending Corruption?

The power of blockchains go far beyond cryptocurrency.

Cecille De JesusJuly 14th 2016

Extinction of Corruption?

While blockchains are more commonly associated with cryptocurrency, the truth is they have a huge potential for a wide variety of uses, with transparency being one of its most significant values. Blockchains can execute actions fast and since transactions are recorded in a public ledger synced with all computers running the blockchain from all over the world, it is highly resistant to manipulation and any suspicious activity is difficult to conceal.  

It looks like Ukraine not only recognizes this potential but is actually making the move towards evolving into one of the first blockchain-integrated government systems bit by bit. At the Blockchain Incredible Party (BIP001), held in Odessa on July 7th, Ukrainian Minister of Finance, Alexander Danilyuk, announced his vision of the country’s public service management sector being blockchain-based to improve efficiency and transparency.

He added that the Ministry plans to sell government property through Auction 3.0, a blockchain-based auction trade system.“We would like Ukraine to be the first country in the world that use the blockchain in selling state assets: to sell them transparently at the highest price and to make sure that there’s no place for corruption. And I believe that the blockchain offers such opportunities. That’s why I’m actively supporting the project Auction 3.0, which is done in partnership with Georgian Innovations and Development Foundation”, the Minister explained.

Blockchain in Charge

Moving these transactions into blockchain systems could very well address both the security and transparency issues compelling the need for total privatization of public enterprises, as well as the lack of efficient auction mechanisms that prevent it from happening. “We have a specific problem in DGF (Deposit Guarantee Fund), which has a lot of assets. And there are a lot of suspicions that these assets could be sold in non-transparent manner. What is the answer? I believe in a new mechanism – this Auction 3.0, that would allow to do it in a quick and transparent way,” Danilyuk says.

Apart from this, Danilyuk says Ukraine does not intend to stop there: they intend to get the National Bank on board. This is only the beginning of an overhaul for the country. The minister is hopeful, saying, “This is our opportunity to change the approach to privatization, the overall approach to selling the state assets, and this is our chance to change the country.”

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