Blockchain: a peek into the future of the Indian framework
In the last week of January 2021, Ministry of Electronics & Information Technology (MeitY) has come up with a national strategy document for adoption of blockchain technology. The document has recommendations for implementing a national level blockchain framework. This article highlights the salient points from the strategy document and attempts to gives a sneak peak into the future regulatory framework
- A key debate in the document is on public versus private architecture. The document takes note of the Blockchain Service Network (BSN) of China and the European Blockchain Partnership (EBP). BSN offers centralized blockchain protocols via two architectures — a public permissioned architecture called BSN International, that creates an ecosystem for global developers and a private permissioned blockchain with no access to public blockchain networks. The EBP intends to harmonize protocols across these member states to ensure these incorporate values of privacy and sustainability. Blockchain architecture and corresponding standards is cultural in nature. The MeitY proposes a multi-institutional collaborative framework and notes that only private blockchains will have the necessary scale, which will be critical to building a digital economy. The protocols will have social welfare as the core much like the draft PDPB bill, whose principles were different to the GDPR
- The framework has three kinds of participants — infrastructure providers (BaaS), application developers and the tech stack provider. In terms of the participants, a crowd sourced model is proposed for infrastructure ownership led by NIC /NICSI which will create an “indigenous blockchain platform” or a private blockchain network with regional nodes. BaaS application developers may be from either private or public sector. The government might open the standards for interoperability with public blockchains, but these are likely to be regulated. The tech stack provider will be an IP creator such as iSpirt or NPCI or GSTN. Public blockchains in the cryptocurrency are already in the process of being banned with the likely introduction of the bill in the budget session
- Transparency, accountability, and efficiency in delivery of government services and consequently, record management and digital certificates is the focus area and a core element of the national blockchain strategy. Inspiration is drawn from Estonia, Dubai and Brazil as being examples of countries which have implemented blockchain based governance initiatives. The recommendations also highlight agriculture, health and energy as key potential areas for more security. The document mentions the use of blockchain in health data processing in the US and the use of blockchain in the food supply chain in the UK. The document also mentions the use of blockchain in energy grid management in Chile. Possible areas of focus shall include health records management and administration, agricultural supply chain and power distribution.
- The document outlines the objective of making India a global leader in technology as also catering to global needs. It notes that there are various challenges to be addressed in adoption of the technology. These include performance and scalability challenges, skillset and awareness challenges & security, privacy, and challenges in coming up with a regulatory framework. The document demonstrates an intent to solve these through focus on research in these areas, crowd sourced model for infrastructure including neighbouring countries, capacity building, skill development and user awareness initiatives. It also envisages an integration of blockchain strategy with other strategies such as Artificial Intelligence and creation of sandbox for testing applications.