Blockchain in Canada’s public sector: Crossing the Chasm
While cryptocurrencies continue their valuation challenges, the underlying technology is thriving
Co-authored with Ken Saloranta, Chief Technology Officer, Public Sector, IBM Services. This material is our own and don’t necessarily represent IBM’s positions, strategies or opinions.
Blockchain is maturing. 2016 and 2017 were the years of the innovators. 2018 is the year of early adopters in Canadian Public Sector. We see strong evidence for our point-of-view on this.
In January of 2018, cryptocurrencies reached a market capitalization of 0.5% of global non-cryptocurrency market capitalization at $400 billion USD. It’s declined from its peak, but initial coin offerings continue.
Institutional investors are now in the cryptocurrency marketplace. In January of 2018 a major Canadian investment fund took a strong stand.
Ontario pension giant OMERS is pushing further into the rapidly expanding cryptocurrency business through the creation of an Ethereum-focused public company that is planning to raise $50-million.
Blockchain has, of course, crossed the chasm in financial services. Ripple has blockchain and a cryptocurrency as part of their global foreign exchange platform, although its use is not mandatory for their banking institution customers. The other day in Toronto one of us was talking with a short-term money manager for one of Canada’s largest banks. Part of his money-market portfolio includes taking effectively foreign exchange positions in cryptocurrency pairs.
IBM partnered with the open-source Ripple alternative Stellar to deliver three solutions. Most prominent is its Asia-Pacific initiative:
The Universal Payment Solution on the Stellar network is live in the South Pacific and matches currencies across 13 countries and 7 different trade lanes. It uses a bridge asset to take the 3–5 day clearing and settlement process of today down to near real-time.
We’ve already engaged with a healthcare client who has selected Stellar as a claims-settlement blockchain solution. As the IBM Institute for Business Value’s Healthcare Rallies for Blockchain report pointed out, a majority of early adopters viewed claims as one of the key disruptive areas of blockchain in healthcare.
In public sector in Canada, we see two first-movers, the government of British Columbia and the Federal government.
Two years ago, British Columbia in conjunction with the Digital ID & Authentication Council of Canada (DIACC) performed a proof-of-concept of a corporate registry using Hyperledger Fabric 0.6. While successful as a POC, the solution was not picked up by other jurisdictions, and in the absence of participants to collaborate did not progress beyond this stage. In our earlier blog post, we explored the conditions for success which we see as essential for blockchain solution success in public sector. Using that framework, we can see that the BC-DIACC solution did not have the conditions to move beyond the POC stage.
BC is continuing to be a leader in digital identity using blockchain in Canada and is working to establish a solution which moves beyond the POC stage which we expect they should be able to do this year. They are working with Hyperledger Indy, donated to the Hyperledger Foundation by Sovrin, and another IBM-affiliated blockchain along with Hyperledger Fabric and Stellar.
The federal government in conjunction with the World Economic Forum (WEF) and other global partners in the public and private sector are testing a new airport digital ID system powered by blockchain technology. They expect to move the system to pilot in 2018.
These two examples highlight one of the key areas where blockchain will see first uses in public sector, identity.
We’re seeing strong movement toward production blockchain solutions in public sector in 2018 to match the movement in financial services. The technologies have differentiated and matured, the conditions for success are better understood and the clear advantages of blockchain are making movement essential for more efficient governance.
Ken Saloranta, Chief Technology Officer, Public Sector, IBM Services
I’m passionate about learning my client’s businesses in depth, gaining insight into the challenges that face them on a daily basis, and applying solutions and technology to overcome those challenges. I provide technical guidance and oversight to the IBM Public Sector consulting practice in Canada serving government and healthcare organizations.
Michael Barnard, Executive Consultant — Cloud, Blockchain and Health, IBM Services
Focused on helping clients with their strategies related to Cloud transformation and on blockchain solutions in the Health and Public Sector. He has over 20 years of delivery, innovation, transformation and consulting experience, covering a wide span of business and technical domains. Specialties: Healthcare, grid transformation, blockchain, Cloud portfolio transformation strategy, complex program startup.
