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The main German state bank KfW and the Burkina Faso Ministry of Finance will test a blockchain application for public finance management, according to a statement published on Monday 17 December.
KfQ, ranked in 2017 as the third largest bank in the country by total assets, had already signed an agreement with the Burkinabe government in June 2018, providing the country with a credit of 7 million euros (7.9 million dollars) to finance water supply and sanitation.
According to the recent blockchain announcement, TruBudget, an open source app developed by KfW, will be tested in Burkina Faso, Africa in the next six months with the assistance of the global consulting firm Accenture and BearingPoint.
The application will allow users to archive and approve all contracts in the industry using blockchain in real time mode. The bank expects it to help reduce long manual processes and ensure that funds are used correctly.
According to KfW, the bank will normally open an office in a partner country to address risks. Joachim Nagel, a member of the KfW executive committee, believes that blockchain can help to monitor these processes at a distance:
"With TruBudget we create transparency for the benefit of all the parties involved and allow donors to use the funds in a safe way, even using directly the structures of the partner country".
As Cointelegraph often refers, global banks use blockchain to reduce documents, reduce costs and reduce human errors.
For example, 26 French companies and five major banks conducted a Know Your Customer (KYC) test based on the blockchain of the R3 blockchain consortium, completing a commercial transaction in real time.
And in December, South Korea's second largest commercial bank, Shinhan Bank, announced that it will implement blockchain in its internal processes to avoid the possibility of human error and improve overall efficiency in financial transactions.
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