Blockchain refers to a range of general purpose technologies to exchange information and transact digital assets in distributed networks. The core question addressed in this paper is whether blockchain technology will lead to innovation and transformation of governmental processes. To address this question we present a critical assessment of the often exaggerated benefits of blockchain technology found in the literature and discuss their implications for governmental organizations and processes. We plea for a shift from a technology-driven to need-driven approach in which blockchain applications are customized to ensure a fit with requirements of administrative processes and in which the administrative processes are changed to benefit from the technology. Having sound governance models are found to be a condition for realizing benefits. Based on a critical assessment we offer directions for further research into the potential benefits of BC applications in e-government and the role of governance of BC architectures and applications to comply with societal needs and public values.