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Small Business Administration: Exploring Potential Use of Blockchain

GAO-23-106051 Published: Jul 11, 2023. Publicly Released: Jul 11, 2023.
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Fast Facts

Data and recorded transactions can be stored in a shared, tamper-resistant, decentralized digital ledger known as "blockchain."

This Q&A looks at whether blockchain could help the Small Business Administration work more efficiently. For example, SBA's annual reports to Congress are often up to 16 months late. Blockchain could speed up the reporting process by eliminating the need to manually verify data and fix errors or inconsistencies.

But blockchain is most useful for users that don't necessarily trust each other. Since this isn't the case with SBA's annual reports to Congress, blockchain may make the reporting process unnecessarily complex.

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What GAO Found

Blockchain enables a community of users to record transactions in a ledger shared within that community. Once a transaction is published, any changes are easily detectable. Unlike traditional databases, blockchain ledgers do not require a central authority, such as a bank or government. Multiple federal agencies have explored blockchain's potential to enhance their operations. However, some efforts have concluded and others have not progressed beyond initial pilot phases.

Experts shared some potential uses and limitations of blockchain that may be applicable for the Small Business Administration (SBA). For example, they noted that a blockchain-based ledger might improve the timeliness of agency reporting for its Small Business Innovation Research and Small Business Technology Transfer programs, which support research and development projects carried out by small businesses. However, they noted that a blockchain may be unnecessarily complex for these programs, and generally emphasized the importance of analyzing programs' processes, workflows, and underlying challenges before exploring the technology.

Why GAO Did This Study

GAO was asked to examine blockchain's potential to address challenges faced by the SBA. This report describes what blockchain is, examples of how selected federal agencies have used or considered using it, factors that entities including SBA could consider in assessing blockchain's potential use, and blockchain's potential uses and limitations in addressing selected SBA program challenges.

To conduct this analysis, GAO reviewed its prior reports, as well as those of other organizations and agencies, including the SBA Office of Inspector General and the National Institute of Standards and Technology. In addition, GAO held a virtual panel discussion with experts from a range of stakeholder groups, including federal agencies, academia, and industry.

For more information, contact William B. Shear at (202) 512-8678 or

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