The Department of the Treasury, a government agency that manages revenue as well as prints and circulates currency, is completing tests of a blockchain-based program that tokenizes the details and payments in electronic federal letters of credit sent to grant recipients.

The testing is part of a wider effort to modernize existing financial systems, Craig Fischer, program manager at the Treasury’s Office of Financial Innovation and Transformation said in a statement. 

The new technology tokenizes electronic federal letters of credit, improving transaction security and tracking capabilities. The resulting blockchain token is comprised of recipient identifiers, grant amounts and award dates.

Grant recipients would have a secure electronic wallet associated with their bank account.

“This isn’t the Bitcoin network, where everything is visible,” Fischer said. 

The program, a collaboration between San Diego State University, Duke University and the National Science Foundation, is set to conclude in January.

© 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.



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