Part of a larger bill called the National Defense Authorization Act (NDAA), the Modernizing Government Technology Act (MGT) will allow the public sector to redirect cost savings (which normally must be returned to the Treasury Department) into internal working capital funds that can be used to upgrade their IT systems. This is reported by the CoinDesk.
Projects that fall into one of three buckets: cybersecurity, migrating legacy systems to the cloud and "other innovative platforms and technologies" will be able to use the working capital funds of agencies for modernization.
Blockchain is not explicitly mentioned in MGT's text. But it fits greatly law's parameters and objectives to advance the technology beyond the proof-of-concept stage at the agency level.
Blockchain was clearly one of the technological capabilities that Congress meant for agencies to look at, and what they were trying to do was create dollars with some flexibility to them so that agencies would have their own discretion on what they invest in.
Senior vice president of public sector, Information Technology Industry Council in Washington, D.C.
A lot of companies echoed Hodgkins' optimism that the act could provide a way for enterprise blockchain services on the governmental level.
We are excited about the MGT Act because it provides incentives to federal agencies to move away from high-cost, low performing legacy systems toward new technologies, like blockchain and smart contracts.
U.S. markets lead, ChromaWay
But even if MGT provides a window of opportunity for blockchain within government "modernization" projects, the technology must demonstrate it has utility at an enterprise level before agencies can fully embrace it.
Government agencies are, after all, still grappling with the cybersecurity risks associated with blockchain.