Application of blockchain technologies to enhance the transparency of public finance

Abstract

The purpose of the study is to conduct a comprehensive analysis of the potential of blockchain technologies as an innovative tool for modernising the public finance management system of Ukraine in the context of digital transformation, increasing volumes of financial data, and increasing societal demands for transparency and accountability of state institutions. Results. It is argued that traditional centralised accounting and control models, on which most state financial systems are built, have several vulnerabilities, including the possibility of unauthorised changes to data, delays in publishing information, restrictions on access to primary transactions, and dependence on a narrow circle of administrators. Such shortcomings are exacerbated in conditions of martial law and hybrid threats, when the stability and reliability of state registers become critical. Blockchain, based on a decentralised architecture, record immutability, consensus algorithms, and cryptographic protection, can provide a qualitatively new level of transparency in state financial operations by enabling complete verification of each transaction, eliminating opportunities for manipulation, and establishing a single source of reliable data. Special emphasis is placed on implementing smart contracts to automate budget processes, public procurement, intergovernmental transfers, and tax liability administration. The paper identifies critical organisational, legal, and cybersecurity prerequisites for integrating blockchain into public finance structures: adapting legislation to decentralised models, establishing data exchange standards, developing interdepartmental digital interaction protocols, and building a national cyber defence infrastructure. Conclusions. Based on an analysis of modern scientific literature and international experience, it is proven that blockchain helps increase public trust, reduce corruption risks, optimise public financial processes, and harmonise Ukraine with European standards of digital governance. The implementation of blockchain in public finance should be considered a comprehensive institutional reform capable of ensuring sustainable development, technological stability, and transparency in the state's financial system.