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India rolls out 5 year roadmap for National Blockchain Strategy

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Last week, India’s Ministry of Electronics & Information Technology (MeitY) published its National Strategy on Blockchain. The five-year roadmap includes rolling out a National Blockchain Framework and a distributed Blockchain as a Service (BaaS) hosting infrastructure to launch an array of use cases initially focused on e-government. However, it plans to expand beyond government applications. 

A tricky topic raised in the document is a requirement for data localization. Given the initial focus on government solutions, this makes sense. However, several trade applications are mentioned as potential use cases, resulting in fragmentation, something that blockchain aims to address. China was one of the first to impose these data localization requirements, and as a result, the likes of supply chain network GSBN has a separate hosting infrastructure for China and the rest of the world.

The MeitY blockchain strategy paper touches on various blockchain technologies, both permissioned and permissionless. However, its Framework diagram lists three enterprise blockchains, Hyperledger Fabric, Hyperledger Sawtooth, R3’s Corda and “other platforms”.

It mentions adopting a consortium model initially for e-government applications. “Subsequently, transition should be made to incorporate various use cases beyond e-governance and the framework would be open for anyone to use.” However, it seems there will be some kind of vetting process, implying some level of ongoing permissioned infrastructure.

Although there will be centralized planning of the Framework, the paper emphasizes collaboration in various ways, including with government departments, states, academia, the private sector. It’s keen to involve startups and plans to run challenges to engage them.

There’s a bucket list of more than 40 potential applications, ranging from property to health, smart cities, education and insurance. Deploying blockchain in the court system is mentioned several times in the document. The roadmap expressly mentions implementing MeitY’s applications in year two. MeitY has been involved in a centralized Know Your Customer (KYC) solution, trade finance, and proof of existence for academic certificates, deeds and agreements.

One of India’s key benefits when it comes to this kind of Framework is its national identity system, Aadhaar. Additionally, it plans to integrate the blockchain infrastructure with its national public key infrastructure eSign, its Single Sing On solution ePramaan, and DigiLocker, a citizen cloud hosting solution for vehicle registrations, academic certificates, and the like. 

These key capabilities may enable it to move faster than other countries. Most other regional shared blockchain infrastructures are unique in their emphasis. For example, China’s Blockchain-based Service Network (BSN) focuses on low-cost small business blockchain hosting as opposed to e-government. Spain’s Alastria is also focused more on commerce. 

Europe’s EBSI has some similarities with MeitY’s plans. EBSI is rolling out educational certificates and a solution to enable any business or individual to track a document such as an agreement. It also developed a reference architecture for developing any solution that EBSI will host.

MeitY first planned to publish a national plan in late 2019. However, a draft version was released in January 2021 and released for public comment. In early 2020, India’s National Insitute for Smart Government (NISG) published its draft proposals. The NISG spent some time discussing a potential central bank digital currency (CBDC). That’s something that the MeitY paper largely avoided, perhaps given the digital rupee is now an ongoing project for the central bank. 

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