Tokenized Payment Instruments for Transparent Grant Disbursement in Government-Led Social Programs

Abstract

Ensuring transparency, accountability, and efficiency in grant disbursement remains a persistent
challenge across government-led social programs, especially in large welfare schemes in developing countries.
Traditional disbursement systems often suffer from leakage, delays, corruption risks, and limited auditability. This
paper proposes a blockchain-driven tokenization framework that leverages programmable payment instruments
using ERC-1155 multi-token standards to streamline grant distribution for healthcare, education, employment, and
rural development initiatives. Smart contracts are employed to automate eligibility verification, fund utilization
tracking, milestone-based release, and real-time reporting, enabling a shift from manual oversight toward
autonomous and rule-bound financial governance. The model introduces multi-tiered wallets for beneficiaries,
service providers, and government agencies to ensure that funds are used strictly for intended purposes. Pilot case
study simulations demonstrate improved traceability, reduced administrative burden, enhanced beneficiary trust, and
measurable declines in financial discrepancies. The proposed system also supports analytical dashboards for
policymakers, enabling instant anomaly detection and performance evaluation. This study highlights that tokenized
public finance mechanisms not only strengthen institutional transparency but also provide a scalable architecture for
future digital welfare ecosystems. (200 words)