The UN is testing blockchain, leaving paperwork behind: it's testing a system that will transform pensions around the world.

The UN has used blockchain technology to modernize its pension system, boosting efficiency and security in identity management globally.

By testing blockchain, the underlying technology of Bitcoin and cryptocurrencies, in its global pension system, the UN highlights that this innovation has the potential to revolutionize digital identity management and reduce paperwork. According to the study, its use offers a secure, efficient, and replicable model for managing digital identities worldwide, and it has the potential to transform public services beyond pensions. 

The recent study, Titulado "Transforming Public Digital Identity. A Blockchain Case in Action from the UN System", published in September, details the progress and implications of this pioneering implementation, which paves the way for widespread use of blockchain in international public administration.

Blockchain as digital public infrastructure: a shift in government management

Originally designed to support cryptocurrencies, blockchain has evolved into a key digital public infrastructure. The technology offers transparency, security and reliability, essential elements for systems that handle sensitive data such as digital identities. Governments and multilateral organizations, including the UN, are exploring how this technology can serve as the foundation for public services, ensuring integrity and efficiency at all times. 

This approach is manifested in international initiatives such as the Brazilian Blockchain Network and European Blockchain Services Infrastructure, which use this innovative technology to build scalable and secure interoperability and data management platforms. 

The UN is leveraging blockchain capabilities to transform its pension system, facilitating access to benefits through a robust digital identity that overcomes the limitations of centralized or federated systems.

“Blockchain technology has evolved beyond its cryptocurrency origins to become a fundamental digital public infrastructure, and governments and institutions around the world recognize its transformative potential.”said the UN.

According to the study, blockchain technology allows manage identities in a decentralized manner, giving each user direct control over their data and eliminating intermediaries that, in traditional models, represent vulnerable points to security breaches or fraud. 

This new paradigm is supported by international standards such as Decentralized Identifiers (DIDs) and Verifiable Credentials (VCs), developed with the collaboration of the World Wide Web ConsortiumThese components not only guarantee authenticity through cryptography, but also facilitate interoperability between systems and countries.

Decentralized digital identity in the transformation of pensions

The UN pension system has seen significant improvements thanks to the incorporation of blockchain technology into digital identity management. According to the organization, replacing paperwork-based processes with a digital model has reduced operational costs associated with paperwork and significantly streamlined benefit administration.

In this scheme, each pensioner has a decentralized identifier that manages their own digital identity and presents verifiable credentials to access services. The cryptographic nature of blockchain strengthens security and makes identity theft more difficult, while decentralization contributes to the system resilience, avoiding single points of failure.

The UN study highlights that this experience is not only applicable to the pension system, but can also be replicated in other public services that require reliable and efficient digital identity management. In short, the technology helps simplify procedures and ensure transparency, key aspects for international organizations operating in multiple jurisdictions.

“Blockchain addresses several challenges of current identification systems”, the organization noted.

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Reinventing digital identity with blockchain for an inclusive future

The deployment of blockchain technology in public systems like the UN's involves an adaptation process that combines technological innovation with strategic governance decisions. Therefore, the implementation reported in the aforementioned UN report underscores the importance of designing flexible systems that allow for future technological improvements without sacrificing the necessary security and data protection standards.

This balance is achieved through hybrid models in which decentralization coexists with appropriate levels of oversight to ensure institutional integrity and public trust. Furthermore, interoperability between platforms ensures that different actors and regions can validate identities in a harmonized manner, thus facilitating global operations and the mobility of people.

The UN also highlights in its analysis the need to provide users with simple tools to manage their identities, taking into account different levels of digital literacy. This aspect is essential to ensure that the digital agenda does not leave out populations with less technological knowledge.

In conclusion, the UN's experience with blockchain represents a significant advance in the digital transformation of global public administration. By applying this technology to its global pension program, the organization not only has optimized the management of digital identities, but has also set a benchmark for other entities seeking to modernize services with criteria of security, efficiency, and transparency.

The report published this month documents a practical case that goes beyond mere technical innovation, laying the groundwork for broader and more coordinated adoption of blockchain in public systems globally. This initiative thus provides a solution that can revolutionize the way governments and international organizations manage sensitive information, with direct benefits for millions of users around the world.