If you’re active on CT, you must have come across the narrative war between prominent blockchain networks on who could be the best choice for the federal government if they want to move to a public chain for an efficiency push. If you don’t know here’s the background story:
In the latest presidential campaign, Trump reiterated that he would change the size, scope, and spending of the federal government to make America Great Again. And after coming to power, he wasted no time in taking prompt decisions to make federal bureaucracy more efficient by cutting billions – or even trillions- from the federal budget, which he claimed was riddled with ‘massive waste and fraud’. And Elon Musk was given the responsibility to lead the newly created Department of Government Efficiency, or DOGE, a playful nod to Musk’s favoured meme coin. And this whole story started to unfold with a Bloomberg article on January 25th that says ‘Musk Explores Blockchain Use in US Government Efficiency Effort’. And this started a who’s-who war to come on top of public sentiment.
In this article, we will see why we think Avalanche L1s could be a powerful fit as custom blockchains for government, not just the federal government, but any government that wants to leverage blockchain for public services. We will also see what factors any government might consider before they choose.
But Why Only Custom Blockchains and Not Any Other
Well, as the PR stunt mentions Public blockchains, a lot of names come to mind when people have to choose.
But I think if you take into account Trump’s America first policy, gut feelings say all of these potential blockchains will be US origin based. And the names are
Though, if you go by the Twitter sentiments, Ethereum, Algorand, and some more might come on the list.
Before we move on, quote unquote a line from the GAO report coming to mind,
“‘…the potential to reduce economic reliance on centralized authorities could generate great results for the government, but can only happen when you have systems in place that can provide a custom operational efficiency to the government…”
When a government wants to bring transparency and accountability to the public, general-purpose chains might be the last thing they will consider!
A government might have specific needs. For example, they might have to integrate the state excise supply chain, farm Insurance, candidate recruitment, land registry, and so on and so forth. Now, imagine the government apps are running on a public blockchain with too much noise. For validating any single transaction for fraud checking or others, the agencies will have to download the complete blockchain nodes, which could be time-consuming and expensive.
A custom blockchain for government could give specific departments an edge by helping them implement faster consensus mechanisms, restricting validator sets, reducing network congestion, and adjusting the block time as per their application-specific need, because, for context:
(i) The Bureau of Engraving and Printing (BEP) produces about 38 million notes (bills) per day, which is approximately 26,000 notes per minute.
(ii) The Bureau of the Fiscal Service handles approximately $5 trillion in payments per year, which includes Social Security, military payments, tax refunds, and other government transactions. This translates to about 9.5 million transactions per day or roughly 6,600 per minute.
If the agencies are putting everything on a public chain, the process can be very slow and inefficient, like on Solana, Cardano, Sui, or Ethereum, which handle other use-cases like DeFi, RWA, NFTs, Memes, and others. So, the agencies will have to fight for the block space.
If they are putting the same on a private blockchain, it will have restricted access. But as citizens, if one has to crosscheck, the opposition, as an equalizer, must have tools in place to verify the same and make that information available to the public. Likewise, the public should have a permissioned access to validate whatever has been broadcasted.
Instead, you need custom blockchains for government that could give you the best of both worlds: (i) Gas viability, control, and speed of private blockchains and (ii) Security of public blockchains.
Our take will be Avalanche L1s (agreeing to these 55.7% chads) and below are why we think so:
Why is Avalanche L1 the Right Fit for Government Use Cases?
- Dynamic Customization By Jurisdiction & Regulations
Regulatory compliance isn’t optional for governments—it’s the priority. And that’s why Custom blockchain for government is a prime pre-requisite. Unlike generic public chains, Avalanche allows governments to set up jurisdiction-specific rules (logical functions) at the infrastructure level through its unique Layer1 architecture.
Agencies can launch their own L1s, defining validator sets and governance models that adhere to local laws while still being interoperable with the larger blockchain network.
Each department can enforce specific compliance measures—whether it’s KYC requirements, tax regulations, or data retention laws—without affecting the entire ecosystem.
So, if a department is getting empowered by blockchain for verifiability and accountability, they can opt for dynamic customization where they can integrate compliance status, timestamps, and completeness of regulatory measures to operate freely at will without any state-sponsored intervention.
- Controlled Infrastructure for Risk Reduction
Security is non-negotiable. Government blockchains can’t afford network failures, validator manipulation, or third-party control risks. Avalanche L1 mitigates this.
With departments controlling their own validator nodes and chain configurations, Avalanche empowers government decision makers to enforce regulatory standards and legal accountability within their own ecosystem. Due to that, the governmental organizations will not have to succumb to a one-size-fits-all limitation which might deter advanced adoption of blockchain.
On the contrary, through Avalanche L1s, they can create permissioned access to restrict information based on geography and sensitivity. For example, in the name of public accountability, you are putting every information public, like procurement of defense equipment and others. It could jeopardize national security, but with the help of the Avalanche L1s, you can launch your own custom blockchains for the government to provide restricted access to specific entities only.
In this way, you can customize some specs that the complete public can see, while keeping the most sensitive ones confined to a specific operational body only within the loop of the government agencies and officials. Moreover, if in the near future, more applications are developed on top of blockchains operating under different environments, Avalanche has provision for that as well through its EVM-Based Avalanche L1s, Experimental Avalanche L1s, and Custom Avalanche L1s.
- Data Privacy by Design
Governments process vast amounts of sensitive data, from citizen IDs and tax records to election logs and national security details. The biggest concern with moving this data to blockchains? Privacy risks. Avalanche L1 tackles this at the infrastructure level with customizable privacy:
Avalanche L1s (prev. Subnets) can enforce encryption standards, including Zero-Knowledge Proofs (ZKPs) and homomorphic encryption, which would allow governments to verify transactions without exposing underlying citizen data.
eERC standards for private transactions: Avalanche enables selective disclosure of information—meaning, only authorized agencies can view transaction details, while others see anonymized versions.
For example, in the year 2023-24, the IRS has collected more than $4.7 trillion in gross taxes from over 271.5 million accounts. When you closely analyze the same, there are over 271.5 million accounts with sensitive data like social security, income, and other details getting checked in the process. Imagine putting all this data at stake and creating another Facebook Analytica fiasco because the government wants to show everything to the public using blockchains.
Avalanche L1s, by design, abstracts the same using its eERC standards that bring zero-knowledge proofs and homomorphic encryption to help protect the users’ data. For this, Avalanche is bringing the efficacies of Etra Pay to conceal sensitive data from the public, like account balances, transaction amounts, and user identities, while maintaining the compliances demanded by the government to fulfill their need of custom blockchains for the government.
- Department-Specific Chains with Seamless Interoperability
Government agencies don’t work in silos—a tax fraud case in one department could need instant verification from banking, judiciary, and law enforcement agencies. Avalanche L1s for Government makes this seamless through:
Departmental L1 that communicate effortlessly, allow different government chains to interoperate without bottlenecks.
Custom permissions for cross-departmental data sharing, ensures that while each department controls its own chain, inter-agency data exchange remains frictionless.
For example, if a fraudulent transaction is flagged in a tax department’s blockchain, law enforcement can automatically sync with the chain and take action without waiting for days of bureaucratic approval.
If a government wants to launch its CBDCs and wants a scalable blockchain, which is safe, secure, private, and has no limitations at all, they need custom blockchains for the government.
This level of secure, real-time data sharing is impossible on isolated private chains and too complex on congested public chains—but Avalanche L1 architecture nails it.
- Scalability That Matches the Need
Public blockchains struggle with high transaction volumes—a dealbreaker for government-grade applications.
Let’s take these examples:
The Bureau of Fiscal Service handles 9.5 million transactions per day (~6,600 per minute).
The Bureau of Engraving and Printing prints 26,000 currency notes per minute.
Daily trading volume for U.S. Treasury securities were around $574 billion on average, as per Federal Reserve and FINRA’s TRACE data.
A blockchain powering such high-frequency operations needs customized scalability, which Avalanche L1 enables through parallel processing of transactions on independent L1s, ensuring high throughput without network congestion from unrelated use cases (DeFi, NFTs, memes, etc.), adjustable block times, allowing each government chain to be fine-tuned for its workload—whether it’s batch processing high-volume payments or instant verifications for national ID systems, and low-latency consensus mechanisms, ensuring speed without compromising security.
Avalanche doesn’t just offer scalability—it lets governments customize their blockchain’s speed and efficiency based on their specific operational needs.
6. Transparency While Being Cost-Efficient
Government inefficiency isn’t just an inconvenience—it’s a trillion-dollar problem.
The US Treasury alone loses 24% of its budget to waste, fraud, and abuse.
Moving spending to blockchain? That drops to 0%—no middlemen, no corruption, just transparent, trackable transactions.
Even at just 1% waste, the US burns through $69 billion a year. Cut that by 5%, and we’re talking about $338 billion saved—almost 20% of the annual deficit.
So before governments raise taxes or print more money, why not stop lighting billions on fire? Governments want accountability but also cost control—and Avalanche excels at both. It doesn’t just promise transparency but does so at scale, without ballooning costs, and without slowing down critical government ops.
Avalanche’s Layer1 architecture powered Custom blockchain for government will allow governments to operate on their own execution layer, keeping fees predictable without suffering from network congestion. This independence is critical. Government services can’t afford fluctuating costs or transaction delays simply because another network participant is handling a high-volume DeFi liquidation. Beyond congestion control, Avalanche also offers customized fee structures. This means agencies can subsidize or even eliminate transaction costs for essential public services. Whether it’s processing tax refund nos, social security payments, or identity verification, governments can structure Avalanche L1 to ensure citizens don’t bear unnecessary fees while maintaining the financial sustainability of the network.
For instance, California’s DMV digitized 42 million car titles on Avalanche, reducing fraud and streamlining ownership transfers. If the same were done on a congested, high-fee blockchain, it would have been a logistical nightmare.
Avalanche Architecture is already Battle-tested for Government Use-cases
California Department of Motor Vehicles
The California Department of Motor Vehicles is digitizing 42 million car titles on Avalanche by the California Department of Motor Vehicles (DMV) on the Avalanche ecosystem to reduce fraud and streamline the title transfer process. This allowed over 39 million residents to access their digital ownership titles on the blockchain. Post the integration, the Californian State Department has levelled the move as a grand success.
FEMA Partnership
Another noteworthy example is the Deloitte and FEMA partnership using The Avalanche Blockchain for the “Close As You Go” (CYAG) platform for quick disbursement of funds to natural disaster victims. The main aim was to go for blockchain to make the process decentralized, transparent, and cost-efficient. Since Avalanche allows setting up separate nodes for departments that can easily interoperate and share data in a private manner, it was possible to scale operations at a custom level and improve recoveries by leaps and bounds in the US, allegiance to the custom blockchain for government capability of Avalanche.
Alex Haseley, principal, Deloitte & Touche LLP and Deloitte’s government and public services crisis management portfolio leader says,
“Due to Avalanche, we are able to do the same in real time because we can set up a specific validator network for each department and set up interoperability in a private and scalable manner. This expedites the process, which would have otherwise taken months to complete…”
Launch Your Avalanche L1 Public Testnet at Just $50 with Cogitus by Zeeve
If you are intrigued by the capabilities that Avalanche L1s have shown in all these years for public and custom chains and want to build one for your government oriented use-cases, Cogitus, powered by Zeeve, an enterprise grade platform is providing everything that you need for building, scaling and launching your Avalanche L1s for government use-cases. You can define your own L1 management dashboard, enterprise-grade SLA, node management, explorers, and others to run scalable and transparent blockchains.
For more information, you can schedule a call with us where our experts at Zeeve can help you resolve all your queries about launching a custom blockchain for government use cases.
Schedule your call today and let Zeeve help you in every manner possible.