Blockchain National Strategies Benchmarking
This is the third issue of Overtheblock’s Public Sector Series. As blockchain moves out from its niche, it requires institutional support in terms of legal frameworks, financial resources and a strategic vision. This post provides an international outlook on the actions that Governments around the world are taking to create a fertile ecosystem for blockchain-based innovation to flourish.
Why a blockchain national strategy?
Like other emerging technologies, DLTs and blockchain are gaining increasing importance and Governments are now considering how to use them to provide enhanced services to address societal needs. The potential impacts of blockchain in the Public Sector have been discussed in the previous Overtheblock Public Sector posts and have to do with greater transparency, enhanced security, and easier traceability. Moreover, in the last five years, important case studies and projects have been implemented in some countries where a fertile ecosystem of actors committed to the development of blockchain-based solutions for the Public Sector was stronger[1], [2], [3], [4], [5]. Taking into consideration these elements, in this post, we want to explore how national Governments are formally dealing with the issue of introducing blockchain technologies in their agenda, through the definition of blockchain national strategies. In order to achieve this, a review of national strategies focused on the blockchain has been conducted.
The analysis highlighted how in the countries where a strategy has been defined or drafted,
Governments consider exploring the DLT and blockchain venue as possibly existential for the future well-being and progress of its economy and society. The declaration of intent to develop a concerted national strategy includes building a framework, or guidelines, or a vision aimed at supporting technological progress and economic development.
What has been considered as a “national strategy” is a formal programme launched by the Government that includes different policies, memoranda, approaches and initiatives aimed to explore, evaluate, and promote blockchain and DLT innovation with special regard to economic and social progress for societies.
The definition of a national strategy focused on an emerging technology is not a new concept. As an example, the European Commission’s Coordinated Plan on Artificial Intelligence has encouraged Member States to develop their national AI strategies by the end of 2019. They are collected in the JRC report National strategies on Artificial Intelligence: A European perspective in 2019 [6]. A similar document summarizing all the blockchain national strategies does not exist, however relevant initiatives are in place. In order to cover this gap, this post analyses and compares the most prominent blockchain national strategies and provides a big picture of them. Specifically, the countries object of this study have been identified through the analysis of publicly available reports and articles [7], [8], integrated with an in-depth examination of specific cases selected on the basis of the presence of documented and relevant blockchain experimentations in the country. For each case, it has been possible to analyse the strategy features following the template described in Figure 1.
Blockchain National Strategies — Structure And Main Topics
Following the analysis model, the different initiatives have been compared and the main elements of a blockchain national strategy have been identified, using as a benchmark the ones observed to be at the highest levels of maturity. The main features of a blockchain national strategy are summed up in Figure 2.
Firstly, general observations regarding how the strategy is defined (1), its maturity level (2), and, potentially, the alignment with specific laws and/or partnerships (3).
1. Definition process: most of the times, the strategy has been built by leveraging the opinions expressed by expert groups, public consultations or preliminary workshops. Examples: Germany, Italy, India, Malta, USA, Canada.
2. Maturity level: Three maturity levels of the ongoing initiatives have been identified:
- Strategy defined: it is the case of the countries that have formally defined a blockchain strategy. The strategy is disclosed in an ad-hoc report and is promoted by the national Government. Examples: Germany, Spain-Catalunia, United Arab Emirates.
- Inclusion in the national digital / technology agenda: this typology encompasses the cases that have not defined an ad-hoc blockchain strategy but consider the relevance of the technology and include it in their national digital agendas. Examples: Estonia, China, Brazil.
- Draft/ guidelines/roadmap: it is the case of some countries that are moving towards the definition of a national strategy. So far, they have been working on the release of a draft, or for the provision of guidelines/recommendations to be considered as insights for the planned future strategy. Examples: USA, Italy, France, India, Canada.
3. Other features: some of the initiatives are strictly related to specific legislation/laws (example: France), or have been promoted through partnerships, like the European Blockchain Partnership or the ‘Declaration of the Southern Mediterranean Countries on Distributed Ledger Technologies’ aimed at enhancing international cooperation in the digital sector and making Southern Europe a leader in emerging technologies such as DLT.
At a further level of analysis, the main common elements of all national strategies are:
- Background: the background of the countries in which the national strategy has been defined is characterized by a mature ICT sector, an existing digital/technology agenda to be valorized and interested stakeholders coming from the academia and the private sectors.
- Collaboration: the collaboration between industry, education and research, the consultation of expert groups, as well as the creation of centres of excellence, are fundamental elements of almost all the considered strategies.
- Business ecosystem: another important element is related to the creation of a fertile business ecosystem in which new enterprises can grow up and existing ones can improve their business. The country is seen as an optimal location for blockchain companies (e.g. Switzerland) or an attractive hub for the development of blockchain applications in business and public administration (e.g. Germany).
- Issues: each strategy identifies specific issues to be taken into consideration. Regulatory issues are present in almost all strategies. They focus mainly on the need to understand how to deal with security, privacy, data protection and identity concerns. In addition, many initiatives focus on standards, on the need to increase digital competencies and skills within the population and to enhance the general awareness about the potential benefits of this technology for the society (examples: Cyprus, Australia, USA, United Arab Emirates). These issues are aligned with the barriers discussed in the first Overtheblock Public Sector post.
- Convergence with other technologies: many states recognise the importance of the convergence between blockchain and other emerging technologies — especially Internet of Things and Artificial Intelligence. They are paramount to the diffusion of innovation in Government (examples: Spain-Catalunia, USA, Italy).
- Application fields: almost all strategies present relevant application fields or use cases on which they plan to work in the next years. The use cases proposed are many and span from the most well-known ones (land registration, identity, education certificates) to others associated to specific sectors (e.g., health, transport, taxation, …).
It should be taken into consideration that, even though the strategies present similar traits and structures, the actions proposed by each country reflect specific local needs and contexts and, because of this, they can differ. Examples of “peculiar elements” of some strategies are the following:
- Despite Estonia has not been included in the countries that have defined an ad hoc blockchain strategy (being integrated in the general digital agenda), it is considered to be at the forefront of the blockchain movement. In fact, the Government has been working on DLTs since 2008 and was the first country to use blockchain on a national level.
- In France, differently from other countries, the first step of the blockchain strategy was to establish a clear legal, accounting, and fiscal framework, allowing the use of the blockchain for the transfer of financial instruments and the issuance of digital assets in a secure framework (within the PACTE law).
- Liechtenstein, as well, started by focusing on the legislation: in fact, it became the first country to have a comprehensive regulation of the token economy (Token and Trusted Technology Service Provider Act, 2020).
- Looking at the application fields, in addition to the most well-known ones (e.g., identity, land registration), the European guidelines put particular attention on a new topic considered only by a few of other countries (e.g., Italy): circular economy and environmental sustainability. According to this vision, blockchain can contribute to the definition of sustainable production and consumption models, in line with the Green Deal goals.
Blockchain National Strategies — Countries Profiles
Analysing the strategies in each country allows comparing different levels of progress and, thus, define a benchmark for innovation. For this purpose, two dimensions were considered:
- The maturity level of the strategy, as defined above;
- The presence or absence of specific work on legislation regarding blockchain in the country (otherwise, regulation issues are to be identified).
The results of the analysis are shown in Figure 3. Six main clusters were discovered: the first two include the countries that have already a defined blockchain strategy, distinguishing between the ones that have also worked on legislation and the ones that have, instead, identified regulatory issues. The third cluster includes the countries in which the blockchain focus is part of the national digital agenda. In these first three clusters, Switzerland, Estonia, the United Arab Emirates and Dubai are highlighted (in blue) since they are the countries in which, as well as presenting blockchain strategies, blockchain pilot projects were most successfully implemented in the Public Sector. The fourth and fifth clusters include those countries where the definition of a digital agenda is still in progress, though drafts, recommendations or guidelines were already released. Some of these states have already proposed specific laws that take into consideration the diffusion of blockchain technology. Last, the case of Liechtenstein is considered only for the legislation dimension: it has, in fact, introduced a new law and became the first country to have a comprehensive regulation of the token economy. The list of the countries within each cluster and their reference document are reported in the Appendix.
Finally, in addition to the national strategies analysed and compared in Figure 3, it is worth mentioning that also the European Commission has proposed its vision through the European blockchain strategy. It defines the key priorities (revolutionising how we share data, transforming Europe’s industries and cross-border public services, building a citizen-centric digital society, contributing to the European economy) and application fields (financial services, public services and digital identity, supply chain and trade finance, programmable money, sustainable energy, mobility and circular economy, healthcare and pharmaceuticals). Moreover, the European Commission is working on the regulatory issues enabling the development of a legal and regulatory framework for blockchain.
Takeaways
The main takeaways emerging from the analysis conducted can be summarised as follows:
1. Since blockchain is an emerging technology, existing strategies and initiatives have been developed recently (in the last 1–2 years) and, in some cases, still need to be improved or better defined. However, many countries are aware of the opportunities leveraged by this technology, and for the future, it is possible to forecast an increasing number of states working on the definition of more elaborated strategies for the effective implementation of this technology both in the private and in the public sector.
2. The presence of blockchain national strategies demonstrate the interest for this emerging technology and increasing awareness about the opportunities for the future well-being and progress of the economy and society, despite some issues that still need to be worked out, especially within the regulatory framework.
3. The states that have developed a blockchain strategy are not necessarily big countries, but they have a strong ecosystem of actors interested in the development of the technology and see it as an enabler of economic and social opportunities.
4. Interactions with key stakeholders and collaboration in international/interregional partnerships are facilitators for the development of a blockchain strategy.
METHODOLOGICAL REMARK: The main sources used for the survey are publicly available reports and articles, integrated with an in-depth analysis made on single countries. Even though a number of countries with a blockchain strategy at, at least, draft-level were identified, the omission of some cases is to be attributed to language constraints or difficulties in finding the relevant information on the Internet. For these reasons, in order to improve the quality of this research and to add data to the analysis, the authors ask the readers to contribute to the study by reporting on other strategies or initiatives, especially for those countries that were not analysed in this study.
REFERENCES
[1] M. P. Rodríguez Bolívar and H. J. Scholl, “Mapping potential impact areas of Blockchain use in the public sector,” Information Polity, vol. 24, no. 4, pp. 359–378., 2019.
[2] Deloitte Insights, “Will blockchain transform the Public Sector?,” 2017. [Online]. Available: https://www2.deloitte.com/us/en/insights/industry/public-sector/understanding-basics-of-blockchain-in-government.html.
[3] IBM, “Building trust in government — Exploring the potential of Blockchains,” 2017.
[4] JRC, “Blockchain for digital government,” 2019.
[5] OECD, “Blockchains Unchained,” 2018.
[6] E. Commission, “AI Watch — National strategies on Artificial Intelligence: A European perspective in 2019,” 2019. [Online]. Available: https://ec.europa.eu/jrc/en/publication/ai-watch-national-strategies-artificial-intelligence-european-perspective-2019.
[7] M. L., “Which Governments Are Using Blockchain Right Now?,” 2019. [Online]. Available: https://consensys.net/blog/enterprise-blockchain/which-governments-are-using-blockchain-right-now/.
[8] “Govchain,” [Online]. Available: www.govchain.world.
APPENDIX — LIST OF COUNTRIES AND RELATED DOCUMENTS
Cluster 1: defined strategy, Government is working on legal framework
1. Switzerland:
a. Strategy: Swiss blockchain federation (2020) DOC
b. Legislation: Switzerland is developing a comprehensive legal framework for DLT/blockchain businesses by adapting existing laws in a pragmatic, flexible, and principles-based way, instead of introducing a technology-specific law.
2. Malta:
a. Strategy: Malta blockchain strategy (2017, first draft) NEWS
b. Legislation: the Malta Digital Innovation Authority Bill, The Technology Arrangements and Services Bill and the Virtual Financial Assets Bill
Cluster 2: strategy defined, regulation issues identified
3. Germany: Blockchain Strategy of the Federal Government (2019) DOC
4. Bavaria (Germany) Bavaria Blockchain Strategy (2020) DOC (in German)
5. Catalunia (Spain): blockchain strategy of Catalonia (2019) DOC
6. United Arab Emirates: Emirates Blockchain Strategy (2021) DOC
7. Dubai: Dubai Blockchain strategy (launched 2016) DOC
8. Cyprus: Distributed ledger technologies (blockchain) — a national strategy for Cyprus (2019) DOC
Cluster 3: Blockchain strategy included in digital agendas, regulation issues identified
9. Brazil: Digital Government strategy (2020) NEWS
10. China: Blockchain Now Officially Part of China’s Technology Strategy (2020) NEWS
11. Estonia: Digital Agenda 2020 For Estonia (2018) DOC
Cluster 4: Draft strategy/roadmap, regulation issues identified
12. India: Blockchain: the India strategy (2020) DOC
13. Australia: The national blockchain roadmap: Progressing towards a blockchain-empowered future (2019) DOC
14. Italy: Proposte per la Strategia italiana in materia di tecnologie basate su registri condivisi e Blockchain (2020) DOC (In Italian)
15. Canada: Strategizing for the future: building a national framework for blockchain in Canada (2019) DOC
Cluster 5: Draft strategy / roadmap, Government is working on legal framework
16. USA:
a. Strategy: New Directions For Government In The Second Era Of The Digital Age (2021) DOC
b. Legislation: Specific blockchain legislation in some states: Delaware (corporate law), Arizona (law: HB 2417 — smart contracts), Wyoming (law: SF0125 — blockchain digital assets)
17. France:
a. Strategy: Stratégie Nationale Blockchain (2019) NEWS (In French)
b. Legislation: within PACTE law
Cluster 6: strategy under discussion, Government is working only on legal framework
18. Lietchestein: Token and Trusted Technology Service Provider Act (2019) LAW
Please cite as:
Pautasso E., Canova C., Ferro E., (2021) Blockchain National Strategies Benchmarking, Overtheblock Innovation Observatory, retrievable at https://medium.com/overtheblock/blockchain-national-strategies-benchmarking-a2923c2db910
OverTheBlock is a LINKS Foundation’s initiative carried out by a team of innovation researchers under the directorship of Enrico Ferro. The aim is to promote a wider awareness of the opportunities offered by the advent of exponential technologies in reshaping the way business is conducted, and society is governed.
We are chain agnostic, value-oriented, and open for discussion.
