TOKYO -- Japan wants to use the data storage technology behind bitcoin and similar virtual currencies to update how individuals and companies interact electronically with government, aiming to bolster information security while cutting administrative costs.
The Ministry of Internal Affairs and Communications will test a blockchain-based system for processing government tenders in the fiscal year through March 2018. Next fiscal year, it plans to lay out a roadmap for incorporating distributed-ledger technology in e-government systems and begin moving in that direction.
Blockchains have drawn worldwide attention for their ability to create highly transparent and secure systems for such purposes as transferring money. Forging entries in a blockchain-based distributed ledger is extremely difficult, since data is shared by everyone in the system rather than stored in any single computer.
The centralized servers behind much of today's IT systems require costly protection against cyberattacks, and the risk of data theft places limits on the types of information that can be shared with and within government, officials say.
The ministry envisions a blockchain-based system making tender applications easier for both the private sector and government. Instead of applicants collecting the tax payment certificates and other necessary documents from various government offices, for example, the agency issuing the tender would be able to gather the information electronically.
Further down the road, the Japanese government will consider sharing its blockchain-related know-how with the private sector. Some have suggested the use of blockchain technology in securing data involved with autonomous driving, power stations and other key infrastructure.