Brazil Launches a Blockchain Network to Better Trace Public Expenditures

On May 30, Brazil’s new government blockchain network went live thanks to a cooperation agreement between the Court of Accounts of Uniam (TCU) and the Brazilian Development Bank (BNDES).

The launch event was live-streamed on the official YouTube channel of the Court of Accounts of Uniam (TCU). The event’s focus was to discuss the technical aspects of the project based on the experiences of several guests (public officials, company executives, and representatives of university institutions).

The Brazilian Blockchain Network (RBB) is still under development, but will initially be used in several public institutions, aiming to improve the services offered to citizens and provide greater traceability on public expenditures.

This is just part of the country’s broadest efforts to integrate blockchain technology into the public administration for a more eficcient and transparent workflow. This goes beyond simpiy regulating crypto from a financial point of view —which also happens to be the focus of many legislators in the country.

Brazil is betting on the blockchain to fight corruption or improve public institutions

The incorruptible nature of blockchain technology is a double-edged sword for many officials and politicians, as it makes it easier to immediately expose any type of corruption, embezzlement, or illegal activities, which TCU wants to prevent.

Ana Arraes, president of Uniam’s TCU said that the idea of using blockchain technology came up during the second half of 2019. In addition, she explained that this topic had been very relevant within the Government discussions, due to the advantages it offers when auditing the data provided for public spending.

“The use of Blockchain technology becomes widely discussed because it allows greater protection, transparency and integrity in the storage of information in public databases in order to allow auditability of the data placed.”

João Alexandre Lopes, manager of the Information Technology Area of BNDES, said that as soon as the project is formalized, they will open their doors so that all “partners can enjoy this common infrastructure”, to mutually benefit from blockchain technology, in addition, to share such “benefits for the public interest.”

Blockchain is used in several countries to improve public institutions

In Latin America, the use of blockchain technology within public institutions has been proposed repeatedly and has already been implemented in countries such as Colombia, Perú and Argentina, where citizens can audit some state activities.

At the end of 2021, Colombia announced the development of a pilot project with blockchain technology to fight corruption that lasted approximately 3 months. However, the MINTIC has not published official information on the progress or current status of the project.

Also, Peru is using blockchain technology as part of a project to improve traceability on public contracts. Peru joined LACChain to form a blockchain network focused on serving as a testing ground for the development of digital identity (ID) models and traceability solutions on which to rely. The companies will then create applications with blockchain technology to help them become more efficient or solve problems in their environment. This happened back in 2019, when the country wasn’t showing much interest in launching a CBDC.