US state benefits pilot to use blockchain for combined payments in 2027

Blockchain pilot for US state benefits planned for 2027

Digital Asset, the company behind the Canton Network, and the American Idea Foundation, led by former US House Speaker Paul Ryan, have announced a pilot program to use blockchain technology for distributing state-administered benefits. The program, called RISE, is set to begin in the first quarter of 2027.

The pilot will combine multiple benefits into single payments, either monthly or twice a month. These payments will include spending rules for categories like food, child care, and cash. The system aims to automatically adjust benefit levels as household incomes change.

Three US states will participate, but their names and the specific benefit programs involved have not been disclosed. The pilot also requires federal approval before it can proceed.

How the system will work

• The Canton Network, a blockchain platform, will coordinate the rules, permissions, and transactions for distributing benefits.
• Participating agencies will be able to track payments, balances, spending, and compliance data through the network.
• The system is designed to limit access to sensitive personal information while ensuring benefits are distributed according to the rules.
• Payments will include spending restrictions for specific categories like food and child care.

What Paul Ryan said about the pilot

Paul Ryan stated that the pilot aims to address issues in the current benefits system, such as penalties that can occur when recipients' incomes increase. He said:

"By combining fragmented benefits, reducing penalties as families earn more, and rigorously measuring results, these pilots can help show what a modern safety net should look like."

What is confirmed about the pilot

• The pilot is called RISE and is planned to launch in Q1 2027.
• It will involve three unnamed US states.
• The Canton Network will be used to manage and distribute benefits.
• Federal approval is required for the pilot to proceed.
• The system will combine multiple benefits into single payments with spending rules.

What is still unclear

• The names of the three participating states have not been disclosed.
• The specific benefit programs included in the pilot are not specified.
• It is unknown whether federal approval has been secured or when it might be granted.

Why this pilot could matter

The pilot aims to test whether blockchain technology can make benefit distribution more efficient and reduce penalties for recipients whose incomes rise. If successful, it could provide a model for modernizing how state-administered benefits are managed across the US.

The Canton Network has previously been used in institutional finance, including projects involving government securities. This pilot would expand its use into public benefits, potentially demonstrating new applications for blockchain technology in government services.

Sources

• Cointelegraph