Some state governments have already implemented blockchain based projects that do not require cryptocurrencies. Then why do we need cryptocurrency?

These projects are more comparable to setting up home wifi or a local area network than they are to using the internet. Such small-scale initiatives may and should coexist alongside other forms of private innovation. Furthermore, whether it is the ‘digital Rupee’ or state-run land records administration, such schemes would need the government to build all of the infrastructures on its own dime. The infrastructure is already established and may be used on a pay-per-use basis when these initiatives leverage an existing privately-made bitcoin network. It’s quite simple to upgrade the infrastructure and switch to a better service.

The debate now is whether such government services should be run on privately owned infrastructure. Yes, many government applications are accessible over the internet. Furthermore, when this technology is employed in a decentralized manner, its entire potential is realized. The records are only as safe as the central server when it is centralized (that is when it is managed by the government or an organization on its own infrastructure). A decentralized project, on the other hand, has no single point of attack and is therefore regarded as very secure.