Indian National Strategy on Blockchain-Ministry of Electronics and Information Technology-2021

A national-level strategy is required to create a National Blockchain infrastructure that can be used to experiment with solutions developed and latter used for providing services as well.

The ‘National Strategy on Blockchain’ as brought out by the Ministry of Electronics and Information Technology (MeitY), Government of India, is the move in the direction towards enabling trusted digital platforms creating blockchain framework for the development of applications based on this technology.

The document introduces Blockchain technology in simple terms, giving the international scene on its adaption, highlighting national initiatives, and projecting various directions in which developmental work needs to be done. A survey has been presented on the adaption of this technology in different countries and the predictions/forecast on the Global Blockchain Government Market. The document also describes SWOT analysis, the challenges ahead, the concerns – technological as well as regulatory – and the mechanisms for the creation of the National Blockchain Framework and implementation of the strategy in a coordinated manner [Office of the Principal Scientific Adviser to the Govt of India-www.psa.gov.in]

NATIONAL STRATEGY ON BLOCKCHAIN
MINISTRY OF ELECTRONICS & INFORMATION TECHNOLOGY
Government of India
UPDATE DATE: December 2021

Need for a National Blockchain Framework

National Blockchain Framework can aid in scaling up the deployments for developed applications, developing shared infrastructure and enabling cross domain application development. Initially the framework may support Government applications and later it can be extended / adopted for other relevant applications. 

Since no single platform is capable of meeting the requirements of different application domains of the country, the proposed infrastructure can help in hosting multiple Blockchain platforms. This will enable each application to benefit from the platform specific strengths. It is also proposed to design and develop an indigenous Blockchain platform incorporating identified best practices and advanced technological features. On each of these platforms, the domain specific chain such as property chain, health chain, education chain, etc. may be hosted and controlled using the smart contract logic. The framework would be capable of hosting multiple smart contracts and ledger meeting the broader requirements of the country. Basic process automation functional aspects related to assets such as asset creation, linking of asset to users, transferring or tracking of asset, etc. could be provided using easy to use and standard APIs using the National Blockchain API. This will facilitate in customizing the application software for any workflow requirements and get the benefits of the National Blockchain infrastructure.

Other generic value addition features such as proof-of-storage, proof-of-existence and predictive visual analytics and intelligence can be used by any application to extend its functionality. Predictive visual analytics and intelligence will help to build business intelligence from the metadata of Blockchain. The applications can also have integration points with existing national services such as e-Pramaan, Aadhaar, eSign, Digilocker, etc. Security and privacy aspects can be enabled across the layers of the Blockchain Framework.

1. VISION, MISSION, OBJECTIVES AND SCOPE

1.1. Vision
To create trusted digital platforms through shared Blockchain infrastructure; promoting research and development, innovation, technology and application development; and facilitating state of the art, transparent, secure and trusted digital service delivery to citizens and businesses, thus making India a global leader in Blockchain Technology.

1.2. Mission
Endeavour to evolve a vigilant and trusted collaborative digital ecosystem to provide a consensus based, tamper-evident, transparent and open framework for offering eGovernance services to citizens and businesses involving multiple organizations in a participating environment assuring trust, security, track and trace, integrity and regulatory compliance.

1.3. Objectives
1. Create a trusted digital platform by evolving a national Blockchain infrastructure that can be used for development and deployment of applications supported with a sandbox for testing multiple Blockchain based solutions.

2. Foster research & development in Blockchain technology to address challenges related
to rapid application development & deployment, interoperability, scalability, security and privacy.

3. Create and update an innovation roadmap for trusted digital platform, addressing various challenges towards Blockchain technology adoption

4. Plan for production grade applications of national interest focusing on providing faster, secure, transparent, trusted and efficient delivery of services to the citizens and businesses.

5. Encourage development of standards in the area of Blockchain technology.

6. Identify the legal and policy requirements towards regulating Blockchain for offering services to citizens and businesses.

7. Encourage multi stakeholder model in evolving national Blockchain infrastructure for offering citizen services thereby assuring transparency, trust and provenance.

8. Strengthen India’s collaboration with global organizations and innovation andresearch centres working in the area of Blockchain technologies.

9. Evolve a centralized planning and decentralized execution model for large scale
adoption.

10. Promote capacity building, skill development and innovation in Blockchain technology.

1.4. Scope

This document provides an insight on strategies and recommendations for creating a trusted digital platform using Blockchain Technology facilitating trusted service delivery to citizens and businesses and also make India a global leader in terms of research and development and harnessing the benefits of this emerging technology by focusing on the
following elements:

1.5. Technological Aspects

1. Evolve a national Blockchain infrastructure that can be used for development and deployment of Blockchain applications supported with a sandbox for testing multiple Blockchain solutions.

2. Provide support to stakeholders who are in need of distributed data provenance architectures with inherent scalability, security resilient and privacy-based data sharing capabilities.

3. Provide support for naturally evolving interoperability across different Blockchain platforms amongst participating entities.

4. Focus on capacity building and skill development to ramp-up technology insight and encourage innovation across various stakeholders including students, practitioners, management executives, policy and decision makers, etc.

5. Contribute towards creation of Intellectual Property Rights (IPR).

6. Enable global access to the developed technology as necessary and contribute towards development of cross-border solutions.

7. Contribute towards development of national and global level standards.

1.5.1 Administrative Aspects

1. Carryout detailed study and identify the legal and policy requirements towards Blockchain regulation and governance for offering citizen services.

2. Evolve multi stakeholder model towards creating the national Blockchain infrastructure.

2. INTRODUCTION

Blockchain is an innovative distributed ledger technology which was first introduced in the design and development of cryptocurrency, Bitcoin in 2009 by Satoshi Nakamoto. Blockchain is an amalgamation of various innovations, with a clear business value. Blockchain enables a shared ledger among the various parties involved in business transactions, which acts as the single source of truth. Blockchain eliminates the need for a central entity to validate the transactions.

Blockchain can be used in both Permissioned and Permissionless models. These models have applications in various domains such as education, governance, finance & banking, healthcare, logistics, cyber security, media, legal, power sector, etc. Globally and nationally, various efforts are being made towards implementing Blockchain based applications. Proof-of-concepts (PoCs) and pilot deployments have been successfully carried out. In order to reap the benefits of this technology, there is a need for a national level strategy on Blockchain technology.

2.1. Technology Overview

Blockchain, a distributed ledger technology, enables a layer of trust and eliminates the need for a third party to validate the transactions. Blockchain technology is an amalgamation of various technologies such as distributed systems, cryptography, etc.. Data and transactions stored in blocks of Blockchain are secured against tampering using cryptographic hash algorithms. Blocks are linked with each other with proper security using hash function. This leads to a Blockchain, which is a distributed ledger stored at various nodes in the network. Each block contains details of transactions, hash of the previous block, timestamp etc., as shown in Figure 2.1. It is difficult for an adversary to modify the stored details at majority points. Therefore, Blockchain provides better security when compared with a centralized system.

Applications in Prototype, Pilot and Production Globally many countries have launched platforms and services using Blockchain technology and many vendors are offering Blockchain-as-a-Service to the customers.

1. Blockchain-based Service Network (BSN) initiative of China aims at helping companies and individuals deploy Blockchain applications faster and cheaper. BSN hosts a number of tools for developers which aid in developing applications majorly focused on smart cities and digital economy.

2. China has planned Blockchain based identification system for smart city infrastructure. This system will assign a unique, global digital ID to Chinese smart cities, aiming to improve the connectivity and data sharing between these cities. China has also planned Blockchain enabled Notary Service.

3. European Blockchain Partnership (EBP) aims to use Blockchain and distributed ledger technologies to develop a trusted, secure and resilient European Blockchain Services Infrastructure (EBSI) to meet the highest standards in terms of interoperability, privacy, cyber security and regulation in applying policies.

4. Keyless Signature Infrastructure (KSI) is a kind of Blockchain designed in Estonia. This technology is used in Estonian government to prove the authenticity of the electronic records. They have also implemented X-Road, which is an open source data exchange layer. X-Road enables different organization to exchange information securely.

5. United Arab Emirates has Smart Dubai initiative, which aims to become the first city fully powered by Blockchain by 2021 and enhance everything from healthcare and education to traffic management and environmental sustainability.

6. In the US, food and drug inspection to address the problem of lack of transparency and security in health data processing is using Blockchain. In the UK, Food Standards agency is using Blockchain to track the distribution of meat to enhance food traceability.

7. The Brazilian government is focusing on Ethereum platform for developing various applications including voting. Brazil is also focusing on public bidding of contracts with the government’s on-line bid solution to ensure secure and transparent deals for agriculture applications, student certificates and tracking student performance.

8. Chile is using Ethereum platform to enable transparency in energy grid by tracking data and finances related to it. Switzerland is offering digital IDs through Ethereum platform.

9. Canada is using Ethereum platform to bring transparency in the spending of government grants. Sweden is focusing on conducting real estate deals and Ghana on land registry and cadastral register based on the Blockchain to collect property taxes on them.

10. The Monetary Authority of Singapore (MAS) is focusing on using Blockchain technology in financial and technological domains. Blockchain technology is used to enable cross-border payments. They are working towards designing a solution for securing healthcare data and also smart contracts are adopted by Insurance companies.

11. Zug, in Switzerland, is the first place in the world to accept Bitcoin payments for tax purposes. They have successfully developed Blockchain based voting system and also created Blockchain TaskForce, for guiding companies towards implementing Blockchain framework.

12. Samsung Blockchain Wallet powered by COSMOCHAIN Blockchain has developed CosmeeDApp for purchase of contents using cryptocurrency. If a company utilized information provided or created by customers, the information providers get rewards for using Blockchain in a completely transparent manner.

13. LG has launched Blockchain platform with applications for digital authentication, community token and supply chain management.

14. Amazon Managed Blockchain, Microsoft Azure Workbench, IBM Blockchain, Oracle Blockchain and BlockappsStrato are some of the Blockchain services offered.

List of Potential Applications

(i) Transfer of land records / property
(ii) Digital certificates management
(iii) Pharmaceutical supply chain
(iv) e-Notary service
(v) Blockchain enabled e-Sign solution
(vi) Farm insurance
(vii) Identity management
(viii) Duty payments
(ix) Automated customs enforcement and compliance
(x) Agriculture / farm produce supply chains
(xi) E-Voting
(xii) Smart Grid applications include energy transmission, distribution, trading and marketing of energy
(xiii) Authorized access to relaying in the substation protection system
(xiv) Government crypto wallet platform for selling, buying and trading
(xv) Multiple layer and multiple level access Blockchain based cloud storage of health test records
(xvi) Validation of Bill of Lading in cross-border transport
(xvii) Ease of validation of documents at the customs at the ports of entry and exit (xviii) Electronic health record management
(xix) Digital evidence management system
(xx) Public service delivery
(xxi) Blockchain for social good use cases (charity, donations)
(xxii) Metering and settlement
(xxiii) Payment security mechanism
(xxiv) Authentication and authorization services
(xxv) Automated control of decentralized power
(xxvi) Smart grid application and grid management
(xxvii) Microfinance for Self-Help Groups (SHG)
(xxviii) Customs and trade finance
(xxix) Cross border trade
(xxx) Renewable energy trading and management
(xxxi) Insurance underwriting and claims management
(xxxii) Aggrotech environment
(xxxiii) Micro-financing, financing small businesses or individuals
(xxxiv) Secured logistics document exchange (SLDE)
(xxxv) Cold chain for supply chain
(xxxvi) National and state highways, toll collection, tracking of public infrastructure
(xxxvii) Blockchain for urban development tracking through Public Private Partnership
(xxxviii) Tracking the progress on climate agreement through Blockchain
(xxxix) Asset transfer across different government departments
(xl) Digital identities, verifiable credentials to secure privacy and enable new use cases
(xli) Safe and secure vaccine distribution and administration
(xlii) IoT device management and security
(xliii) Vehicle lifecycle management
(xliv) Chit fund operation and administration.

CONCLUSION

The National Strategy to evolve a trusted digital platform for providing e-Governance services using Blockchain lays out overall vision and the development and implementation strategies for a National Blockchain Platform covering the technology stack, legal and regulatory framework, standards development, collaboration, human resource development and potential use cases. It is hoped that this strategy document would provide the necessary guidance and support for realizing the vision and creating a nationwide ecosystem for creating the National Blockchain Platform and development of relevant applications using this platform in various domains.

MeitY will work with various Government organizations and other stakeholders in implementing this strategy and realizing the various advantages of the Blockchain technology in terms of enhanced security, trust and its ability to ensure tamper-evident transactions. A dedicated team would be identified to hand-hold the implementers at various central / state government applications. Existing services offered by MeitY and other Government organizations would also be onboarded onto the trusted digital platform.

Read the whole Document

Indian National Strategy on Blockchain-Ministry of Electronics and Information Technology-2021


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