Today the Australian government unveiled its National Blockchain Roadmap. The paper highlighted three specific use cases to explore. They include the wine supply chain, credentialing and Know Your Customer (KYC) identity checks.
Key aspects of the road map include setting up a steering committee, adapting regulations, collaborating domestically and internationally, and encouraging skills and capability.
Envisioning the future
The government document quotes Gartner’s predictions that the business value of blockchain will exceed US$175 billion by 2025 and $3 trillion by 2030.
Who knows what might happen in the future, but it also quoted some hard facts. SMEs conduct 93 % of blockchain activities. The 2018 figure for Australian startups that identify as blockchain-related was 8.1%. And it claims Australia ranks sixth internationally in blockchain patents.
Three specific use cases – wine
Another quoted statistic relates to the first use case for tracking the wine supply chain. The cost of food and wine counterfeits was A$1.68 billion in 2017. Wine was the second largest component at A$303 million. Australia is the world’s fifth-largest wine producer and exports 63% of its output. While the export figure is A$2.89 billion, the contribution of the sector to the economy is estimated at A$45 billion.
Apart from preventing counterfeits, blockchain could help to optimize cultivation, enhance inventory tracking, aid with cheaper trade finance and more. However, there are several challenges. These include the high cost of a solution with the benefits spread across numerous actors. And participants in the sector are generally not technophiles. It’s partly because of the collective benefits that this use case has been chosen.
As an example, the roadmap paper highlighted a KPMG Origins track and trace project with boutique wine producer Mitchell Wines.
Credentials and KYC
While Australia is known for its agriculture, it turns out that the top three exports are iron ore, coal and tertiary education. The sector is worth A$35.2 billion a year to the economy. It quoted one statistic that 25% of people include false information in their resumes. And credentialing is a popular blockchain use case and one of the Australian Government’s chosen three.
The third use case relates to Know Your Customer (KYC) checks. It’s a global issue that if a customer wants to have multiple bank accounts, they have to go through the tedious process again. Not mentioned is the fact that this inhibits competition.
So a customer should be able to tell one bank to share its KYC information with another. An obstacle to using blockchain for sharing data is the legal liability. If there’s an error, will the bank that did the sharing be liable? Australia has published a legal bill, which will mean if one organization is to rely on another’s KYC, it needs to perform due diligence on their processes. If it does so, and there’s a one-off KYC error, the organization that performed the KYC will not be liable.
Coming back to the guts of the Australian strategy. The first order of business is to set up a National Blockchain Roadmap Steering Committee and ensure a collaborative model with industry, research organizations and government departments.
It wants to revisit regulations, particularly concerning identity and privacy. In the latter case, current legislation requires the identification of a responsible party, which can be tricky with decentralized blockchains. Nonetheless, it wants to ensure that pseudonyms used on blockchains cannot be linked back to real people.
The roadmap highlighted an often under-appreciated topic – ensuring data added to an immutable blockchain is both accurate and not fraudulent. Hence other regulatory issues include security, data provenance, integrity and governance.
Other roadmap points involve investigating what other governments are doing, collaborating internationally, and attracting inward investment. Australia wants to provide sufficient skills and blockchain capability. Hence startups will get support and the government will ensure there are appropriate blockchain qualifications.
Australia is not alone in outlining a national strategy. Last week India published an audacious draft one proposing both a national blockchain and a central bank digital currency. And Germany released its strategy late last year.