DHS Mulling Blockchain at the Border

An agent of the border patrol, observes near the Mexico-US border fence, on the Mexican side.

An agent of the border patrol, observes near the Mexico-US border fence, on the Mexican side. Christian Torres/AP File Photo

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An official struck a cautiously optimistic tone when discussing the decentralized ledger system.

The Homeland Security Department is investigating ways the decentralized ledger system used to track transactions that use bitcoin and other virtual currencies could be used at the nation’s borders.

Customs and Border Protection is working with Homeland Security’s Science and Technology Directorate on potential use cases, and is advising a group of technology companies on what their needs might be, Vincent Annunziato, a CBP Trade Transformation Office director, said at an event in Washington hosted by the government tech publication FCW. At least during those discussions, the companies they meet with can’t pitch their own products to DHS, he added.

But those conversations are at a very early stage. Annunziato said he was “cautiously optimistic” about integrating a ledger system into operations. While he “wouldn’t want to jump in” in the near-term, his team is considering blockchain for three, five or ten years in the future, he said.

The value of blockchain is that each time a virtual asset is transacted it adds a new encrypted element to the ledger, ensuring that outsiders can’t tamper with the transaction history.

Governments might use a blockchain system to track documents that need to be shipped internationally, serving the dual purpose of ensuring the integrity of those documents and also automating that assurance process, he explained. Federal agencies might use a similar system to track their own finances, maybe to document changes made to another part of the government.

Broadly, Border Protection is a “passive participant” in the technology, leaving much of the development to the private sector, he explained. Some companies use blockchain for logistical purposes, potentially to track the trajectory of items coming in from various countries, for instance. But “could the government make use of it? Absolutely.”

Homeland Security isn’t the only agency thinking about blockchain, but discussions are at a very early stage. The General Services Administration recently hosted a workshop to raise awareness about it. Leaders at that agency have emphasized that their role is to educate the government about technology, not to promote a specific solution.