With Sinclair Davidson and Jason Potts
Executive Summary: This paper introduces the radical opportunities that the invention of distributed ledger technologies offer for government, using the Australian payments system as a case study. The paper presents a model for the reform of government in light of the blockchain based on the new comparative institutional economics literature. In response to invention of the blockchain, governments should:
- Allow firms to experiment and introduce blockchain enabled services – that is, take “permissionless innovation” approach.
- Adapt regulatory environments to accommodate the use of blockchain applications where those applications cross over existing regulatory requirements – for example, in the space of taxation, and financial and prudential reporting.
- Directly adopt blockchain technologies for delivering government services and to enhance (or replace) existing government processes.