Ukraine plans to create and implement a decentralised system of online auctions for municipal and regional government institutions. It will be the first time blockchain is used for state property privatisation.

On March 23, at the Foundation for Innovation and Development (IDF Reforms Lab) in Kiev, a memorandum will be signed concerning the e-Auction 3.0 project. The event will be attended by the governor of Odessa province and ex-president of Georgia, Mikhail Saakashvili, and the founder of the Foundation, former Georgian Deputy Minister of Justice Giorgi Vashadze. Both of them, being citizens of Georgia, currently work as Ukrainian officials. Among the attendees are representatives of partner companies that have contributed to the development of the service: Ukrainian financial organisations Oschadbank and PrivatBank, as well as Distributed Lab, Microsoft and Unity-Bars.

According to the announcement, the decentralised horizontal auction system “is able to fundamentally change the economic model and allows to surpass existing borders.” The main advantage of an e-auction is that the blockchain technology helps to eliminate corruption, and all participants of the auction will be offered equal and transparent opportunities. The government will also benefit from this blockchain service as it will be financed by bidders and private providers, not from the state budget money.

In February, the team led by Georgian developer Lasha Antadze released an e-Auction version for public testing. The online auction system is based on blockchain architecture with the Proof-of-stake (PoS) protection method. Node operators work as bridges between the participants and collect fees. Payments can be made both in digital and in fiat currencies via bank transfer, using e-Auction’s API that checks bank account details.

The interest of Ukrainian companies and officials to bitcoin and the decentralised ledger technology has notably increased over the last year. On 19 March, the concept of blockchain-based governmental portal E-Ukraine was presented at the Blockchain Conference in Kyiv. The platform will enable citizens not only to use e-services but also to control the work of the government. The project was backed by Ukrainian Cabinet of Ministers.

“I am confident that many public services can be successfully built on the basis of the distributed ledger technology,” said Yegor Stefanovic, Director of Information Technology Department of the Secretariat of the Ukrainian Cabinet of Ministers. “Portal E-Ukraine is a takeoff strip for such start-ups.”

In early February, a memorandum about the creation of a blockchain system for electronic voting E-vox was signed in Kiev. According to its developers, Ethereum-based E-vox can be applied to all types of voting, from intra-company polling and electronic petitions to political referendums and council and parliament elections. Its implementation will prevent tampering with data and fraud during voting.

Even Ukrainian presidential administration admits the advantages of the blockchain. In February, the head of the Presidential Administration of Ukraine Boris Lozhkin reported that a group of Georgian experts working with Ukrainian government proposed to create a blockchain-based governmental database. Lozhkin also supposed that blockchain could be implemented for the purpose of tax collection.

Elena Platonova