The Official Monetary and Financial Institutions Forum (OMFIF), issued  a report with suggestions for blockchain in a public finance management network offering data crucial to “formulate and design fiscal policy.”

Specifically, the OMFIF – an independent global think tank for central banking and economic policy – reportedly claimed that blockchain-enabled modernization of public finance management could assist authorities in the identification of potential corruption and waste, via offering “enhanced transparency and traceability of payments.” 

Per the report, the technology is reportedly able to support the prevention of embezzlement of funds given the increase in fraud worldwide from cases including ransomware and cybersecurity attacks.

Apart from assisting bringing down the risk of theft from invoice fraud – making it possible for users to send payments with “the click of a button” instead of offering personal data – the think tank reported that with the system set up for a central bank digital currency, “the government’s financial position” could be made clear. 

A system updated using blockchain could provide transparency for government spending.

“While a digital currency would mesh well with this kind of system, it is certainly not a necessity. Many of the benefits can be achieved without changing payments rails, simply by improving the [public finance management] architecture. Governments would also be more effective at efficiently managing their cash and forecasting their future cash position.” The report further shared. 

“Blockchain for public finance can reduce the administrative effort associated with financial reconciliations, tracking and reporting. Business terms or eligibility and compliance rules can be embedded into the system to automate transaction controls via smart contracts. Automated tracking and reporting can significantly reduce the cost for partners of interacting with the government.”