Web3 & Governments: An Evolving Landscape

For years, blockchain and Web3 were seen as disruptive technologies sneaking around at the edges of the financial system—something governments either ignored or sought to regulate out of existence. But that picture is changing quickly. From the Middle East to Eastern Europe to state-level governments in India, public-sector leaders are beginning to explore, and in some cases embrace, decentralized technologies.

The reasons vary—economic growth, transparency, efficiency, and even national sovereignty—but the trend is clear: governments are no longer bystanders in Web3’s story. They are becoming active participants. And in many cases, the innovations they’re piloting could have real, tangible benefits for everyday citizens.

Why Governments Are Getting Interested In Web3

Governments are drawn to Web3 for the same reasons individuals and businesses are: it offers a way to move value, verify information, and coordinate people. Unlike individuals and businesses, who also are drawn to the idea of not relying on a single central authority, governments are attracted to Webs for its ability to deploy transparency, automation, and trust features. This allows them reinforce their legitimacy, streamline operations, and attract economic growth—while still maintaining control over the legal and regulatory framework.

Where Web3 Is Already in Use

Across the world, governments are experimenting with Web3 in ways that range from the symbolic to the deeply structural.

United Arab Emirates: A Multi-Emirate Approach

The UAE leads the world in crypto adoption, with roughly one in four residents owning digital assets. But what’s striking is the tailored approach each Emirate is taking:

• Abu Dhabi is focusing on institutional-grade digital markets and tokenization platforms.

• Dubai has positioned itself as a hub for crypto entrepreneurs with flexible licensing.

• Ras Al-Khaimah is exploring legal frameworks for registering DAOs.

By making policy friendlier to innovators, the UAE is signaling that it wants to be a global Web3 capital—and it is succeeding.

Czech Republic: Making Everyday Crypto Use Easier

Prague’s lawmakers have passed legislation that exempts crypto from capital gains tax if held for more than three years. They’ve also removed tax-reporting requirements for small, everyday transactions—meaning you could buy a coffee with Bitcoin without a complicated filing at tax time.

Argentina: Bridging Traditional and Digital Markets

Argentina’s securities regulator recently approved trading of ETFs that invest in cryptocurrencies like Bitcoin and Ethereum, giving retail investors a bridge from the stock market to digital assets.

This is also happening in the United States and pathways to investing in crypto or crypto-based investments in retirement accounts is becoming a real possibility.

India: Building Policy Momentum

India’s federal government is moving toward a national framework for digital assets, while tech-forward states like Telangana are pushing practical pilots. Telangana’s government has explored blockchain for public services—and is even considering remote voting systems as part of its civic tech efforts.

Practical, People-Focused Applications

The most exciting part of governments embracing Web3 isn’t the policy announcements—it’s the projects that could improve citizens’ lives in direct ways.

Digital Identity (DIDs)

The EU’s upcoming European Digital Identity Wallet and China’s RealDID project are both exploring blockchain-based IDs. These systems could give citizens secure, reusable credentials for everything from paying taxes to proving voter eligibility—without oversharing personal information.

Land and Property Registries

In countries like Ukraine, Georgia, and Sweden, land titles have been recorded on blockchain to prevent fraud, streamline transfers, and ensure an immutable public record.

Transparent Aid and Supply Chains

The United Nations World Food Programme has piloted blockchain to track humanitarian aid, ensuring funds and goods get where they’re meant to go. This approach could easily extend to domestic procurement and disaster relief programs.

Energy and Sustainability Tracking

In Europe, a proof-of-concept project combines blockchain with IoT to optimize energy usage during low-carbon periods—automating the operation of public infrastructure like heating and cooling systems.

When Crypto Becomes National Policy

Some governments have gone a step further and integrated cryptocurrency directly into their national strategies:

• El Salvador made Bitcoin legal tender and is developing geothermal-powered Bitcoin mining.

• Bhutan is mining Bitcoin using hydroelectric energy, holding reserves that amount to nearly a third of its GDP.

• Ukraine has accepted millions in crypto donations for defense and relief efforts, integrating exchanges into its government portal.

• Iran has required miners to sell Bitcoin directly to the central bank for financing imports.

These moves are controversial and not without risk, but they show a willingness to use decentralized tools for strategic goals.

What This Means for Citizens

It’s one thing for a government to “embrace” Web3; it’s another for that embrace to improve people’s daily lives. The most promising government-led Web3 projects share a few traits:

• They are transparent by design—anyone can verify the data.

• They improve accessibility—like remote voting for overseas citizens.

• They focus on security and privacy—ensuring that digital rights are protected alongside digital services.

Done right, these initiatives can reduce corruption, make bureaucracy more efficient, and give citizens more control over how they interact with their government.

The Road Ahead

As more governments pilot Web3 applications, expect to see three trends:

1. Interoperable Standards – Countries will need to align on technical and legal frameworks so systems can work across borders. This of course will be a tricky process in the current political environment.

2. Hybrid Models – Not every government system will be fully decentralized, but blockchain components will increasingly handle key verification steps.

3. Citizen-Led Pressure – Demand for transparency and efficiency will push governments toward adoption, just as much as competition with other nations will.

The Bottom Line: Web3 isn’t just a financial technology. In the hands of forward-thinking governments, it’s a tool for building trust, streamlining public services, and empowering citizens. The question isn’t whether governments will use it—but whether they’ll use it well.

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Other Articles In This Issue:

• Editorial – Rebuilding Trust: How Web3 Can Revitalize American Democracy

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