Blockchain App Test Scheduled for Use in Public Financial Management with KfW and Burkina Faso
KfW is a state-owned bank in Germany that is the third-largest institution, based on their total assets alone. To help with the progression of blockchain, they’ve teamed up with Burkina Faso’s Ministry of Finance, examining the fintech’s use in public financial management.
A statement regarding this test was posted on December 17th. KfW was also involved with the Burkinabe government in June, when they financed the water supply and sanitation in the area with a €7 million credit.
Based on this announcement, KfW’s TruBudget app will be the system used in Burkina Faso’s testing. The open-source app will be used over the course of six months, though the test will require the help of Accenture and BearingPoint, which are both global consulting companies.
The application makes it possible to use blockchain technology for real-time storage and approval of contracts, which means significantly shorter processes. The immutability and transparency of the technology also monitors the funding to ensure that it is used correctly.
Typically, to handle these types of risks, KfW says the bank would usually establish an office in the area. However, executive board member Joachim Nagel believes in blockchain’s ability to take care of these issues without creating a whole new base. Nagel added,
“With TruBudget, we create transparency for the benefit of all parties involved, and we enable donors to use funds safely, even using the structures of the partner country directly.”
Banks around the world are starting to turn to the use of blockchain, and most of the reasoning is the same – less paperwork, less expense, and less error. There are presently 26 French companies and five banks that used the R3 blockchain to hold a KYC test, which involved a commercial paper transaction.
In South Korea, Shinhan Bank announced their intention to use blockchain technology to support their processes to eliminate human mistakes and promote efficiency.