In its first step towards creating a legal and a regulatory architecture around blockchain technology, the National Institute for Smart Government (NISG) has sought stakeholder comments on the ‘National Strategy on Blockchain.’
NISG is a non-profit formed under the recommendations of The National Taskforce on Information Technology and Software Development. MeitY or the Ministry of Electronics and Information Technology had directed NISG to prepare a draft national strategy on Blockchain in July 2019.
The strategy paper, released on December 30, was drafted by the NISG in consultation with Shivendu S of University of South Florida.
In its attempt to bring India up to speed on the technology, the paper suggests setting up a National Public Blockchain for use by government departments and industry associations. It says such a set up sends a strong signal to startups and the technology industry that the government is keen on leveraging blockchain technology.
“This will institutionalise Blockchain applications, while availing the trust as a service facility of the public permissioned blockchain network under the aegis of various Indian regulators,” the paper says.
The paper also suggests setting up an office or body to coordinate the blockchain strategy. According to the paper, the body will not only determine applications of blockchain but will also help entrepreneurs understand laws surrounding blockchain and virtual currencies.
The strategy paper also outlines applications of blockchain technology in finance technology, including cross border remittance, bill discounting, insurance and trade financing.
Other sectors for application of the technology are digital identity management and related governance, blockchain in supply chain applications, manufacturing, issuance of education certificates, healthcare, telecommunications, decentralised marketplaces and other sectors.
Conflict with data localisation requirement under the Personal Data Protection Bill and Reserve Bank of India’s stance on in-person verification for KYC (know your customer) requirements are listed among the legal challenges for large scale adoption of the Blockchain technology in India in the strategy paper.