The United Nations Embraces Blockchain Technology for Pension System Overhaul
The United Nations recently made a significant leap forward by incorporating blockchain technology into its pension system, marking a pivotal moment in the organization’s embrace of digital innovation. A study on this groundbreaking process has highlighted blockchain as the “ultimate technology for digital identity verification,” prompting the UN to consider extending the system and sharing it with other international groups.
Revolutionizing the UN Pension System
The UN decided to test blockchain technology on its United Nations Joint Staff Pension Fund (UNJSPF), a move that aimed to enhance security, efficiency, and transparency in confirming individuals’ identities. Collaborating with the Hyperledger Foundation, the organization sought to modernize the pension process globally by implementing a blockchain-supported digital identification infrastructure.
Transitioning from Outdated Practices
Prior to the adoption of blockchain, the UN pension fund operated on a cumbersome 70-year-old system that required verifying over 70,000 beneficiaries across 190 countries through a paper-based method. This outdated approach was prone to errors and abuse, leading to approximately 1,400 payment suspensions annually. By transitioning to blockchain-powered digital certification, the UN was able to streamline the process, starting with a pilot program in 2020 and full implementation in 2021.
“The shift away from physical documentation has significantly reduced processing times previously spent on manual tasks like receiving, scanning, and archiving paper documents,” stated the report.
Advantages of Blockchain Integration
Blockchain technology addressed the issue of a single point of failure inherent in a centralized system, as outlined in the report. The authors emphasized the potential for replicating this success in other contexts, citing the open access and usability of blockchain by multiple entities as a key advantage that minimizes redundant identity checks.
Expanding Digital Innovations
Encouraged by the positive outcomes of the blockchain integration, the UN is exploring opportunities to expand similar technologies within its own framework and share them as a “digital public good” with other international organizations. The Digital Certificate of Entitlement approach is poised to be extended to a broader audience, paving the way for enhanced collaboration and digital infrastructure across the UN family.
“The project not only offers a technical prototype but also presents an operational model for fostering secure, scalable, and inclusive digital public infrastructure among UN entities,” remarked Sameer Chauhan, Director of the United Nations International Computing Centre, in the paper’s conclusion.