Blockchain network illuminating a cityscape, symbolizing transparent public spending.

Can Tracking Every Cent Save the Economy? A New Vision for Public Spending

Soraya Malik in Business & Economy June 2025 • 4 min read.

"Imagine a world where every penny spent by the government is transparent. A researcher proposes a radical idea: using blockchain to track all money, all the time, by all people."

In an era defined by digital transactions, the potential to monitor the flow of money with unprecedented accuracy has never been greater. Gonzalo Garcia-Atance Fatjo, a researcher at the University of Central Lancashire, proposes a revolutionary concept: tracking every digital cent in the economy using public distributed ledgers, more commonly known as blockchain technology. This isn't just about following the money; it's about creating a transparent, accountable, and data-rich economic ecosystem.

The core idea is simple yet profound: assign a unique serial number to each monetary unit (like a cent or penny) and record its movement through the economy on a public blockchain. Instead of tracking the amount of a transaction, the system focuses on the serial numbers of the individual units changing ownership. This detailed tracking, combined with anonymized transaction details, opens up new possibilities for understanding and optimizing public spending.

This approach promises to improve the effectiveness and efficiency of public spending, providing policymakers with the tools to demonstrate the societal benefits of their initiatives and make more informed decisions. Let's dive into the details of how this system could work and what impact it might have.

How Does Tracking Every Cent Work?

Blockchain network illuminating a cityscape, symbolizing transparent public spending.

The proposed system relies on a network of permissioned public blockchains or distributed ledgers organized in layers of detail and identification. In a two-ledger setup, the first ledger meticulously records the movement of each cent in every transaction, including detailed but anonymized information about the parties involved and the nature of the transaction. To maintain privacy, only generic identifiers for private companies and individuals are used, along with general transaction details, region, and date/time.

The second ledger provides a mechanism for individuals to verify that their transactions have been accurately recorded. Each block in this ledger is identified by a hash reference, which is also included on bank statements. This allows payers and payees to cross-reference transactions and ensure the integrity of the first ledger.

Enhanced Public Spending Scrutiny: Tracks public spending down to the cent, offering unprecedented transparency.
Real-Time Tax Collection Insights: Shows exactly where and when taxes are collected.
New Money Tracking: Identifies where newly “printed” money enters the economy.
Instant Inflation Monitoring: Provides immediate insights into inflationary pressures.
Data-Driven Economic Decisions: Enables statistical analysis and real-world experiments for better economic policymaking.

Transactions involving government entities are recorded with a higher level of detail in both ledgers, increasing transparency and accountability. This layered approach balances the need for detailed tracking with the critical requirement of protecting individual and corporate privacy.

The Future of Economic Transparency

Tracking every digital cent may seem like a radical idea, but it offers the potential to revolutionize how we understand and manage our economies. By increasing transparency, enhancing accountability, and enabling data-driven policymaking, this tool could pave the way for a more efficient and equitable economic future. As technology continues to evolve, innovative solutions like this may become essential for building trust and prosperity in the digital age.

About this Article -

This article was crafted using a human-AI hybrid and collaborative approach. AI assisted our team with initial drafting, research insights, identifying key questions, and image generation. Our human editors guided topic selection, defined the angle, structured the content, ensured factual accuracy and relevance, refined the tone, and conducted thorough editing to deliver helpful, high-quality information.See our About page for more information.

This article is based on research published under:

DOI-LINK: https://doi.org/10.48550/arXiv.2404.13189,

Title: Use Of Two Public Distributed Ledgers To Track The Money Of An Economy

Subject: econ.gn q-fin.ec

Authors: Gonzalo Garcia-Atance Fatjo

Published: 19-04-2024

Everything You Need To Know

What is the core concept proposed by Gonzalo Garcia-Atance Fatjo?

Gonzalo Garcia-Atance Fatjo proposes tracking every digital cent in the economy using public distributed ledgers, specifically blockchain technology. This involves assigning a unique serial number to each monetary unit and recording its movement on a public blockchain. Instead of tracking the amount of a transaction, the system focuses on the serial numbers of the individual units changing ownership, providing detailed, anonymized transaction details, leading to a transparent, accountable, and data-rich economic ecosystem.

How does the proposed system ensure privacy while tracking transactions?

The proposed system uses a two-ledger setup to balance detailed tracking with privacy. The first ledger records the movement of each cent with detailed but anonymized information, using generic identifiers for private entities and general transaction details. The second ledger allows individuals to verify their transactions have been accurately recorded, with each block identified by a hash reference included on bank statements. This setup ensures that the public can scrutinize transactions without compromising personal or corporate privacy.

What are the key benefits of tracking every digital cent for public spending and economic policymaking?

Tracking every digital cent offers several benefits. It enhances public spending scrutiny by providing unprecedented transparency, offering real-time tax collection insights, and identifying where new money enters the economy. It also enables instant inflation monitoring and data-driven economic decisions, allowing for statistical analysis and real-world experiments for better economic policymaking. Furthermore, transactions involving government entities are recorded with a higher level of detail, increasing transparency and accountability.

Can you explain how the two-ledger system works in detail, and what role each ledger plays?

The two-ledger system is designed to balance detailed tracking with privacy and verification. The first ledger meticulously records every cent's movement, including anonymized transaction details like parties involved, the nature of the transaction, region, and date/time. It uses generic identifiers for private entities to maintain privacy. The second ledger serves as a verification mechanism for individuals, allowing them to confirm that their transactions are accurately recorded. Each block in this second ledger is identified by a hash reference, which is also included on bank statements, enabling cross-referencing to ensure the integrity of the first ledger. This layered approach provides transparency while protecting sensitive information.

What are the potential implications of implementing such a system on a larger scale, and what challenges might arise?

Implementing a system that tracks every digital cent could revolutionize economic transparency, accountability, and policymaking. It could lead to more efficient and equitable economic practices by providing real-time insights into public spending, tax collection, and inflation. The main challenge involves safeguarding individual and corporate privacy while maintaining detailed transaction tracking. It also involves the technical complexity of handling vast amounts of data and ensuring the system's security and scalability. Additionally, regulatory frameworks would need to adapt to accommodate this new form of economic monitoring, potentially requiring new laws and data protection standards.