Blockchain’s role in India’s digital vision

We live in an age of technological dominance where most activities are fluidly intertwined with technology, whether it is daily life or larger socio-economic initiatives, making technology more relevant than ever before.

Among the new technologies, blockchain technology is one of the often discussed technologies with great potential. Blockchain is seen as an all-encompassing technology with the potential to disrupt almost every industry. It is an integral part of the next evolution of the web called Web3. According to a report by The World Economic Forum (WEF), as much as 10% of global GDP will be stored on the blockchain by 2025.

Blockchain technology essentially creates a layer of trust by facilitating immutable records over distributed ledgers. It also provides the right privacy, security and eliminates human discretion by using rule-based actions using smart contracts, making it resistant to modifications and manipulation. This has great significance in a country like India where trust and transparency have often been a struggle, especially in the delivery of public goods given the scale, diversity and complexity unique to India.

Relying on correct data is essential for deliver efficient and targeted citizen services. Nevertheless, the biggest challenge the authorities face is that the data is inside silos and often inconsistently across government departments. Blockchain can create a huge impact in many services involving government, and here are two examples:

Country records: Deed of sale, property tax receipts, survey documents are among the many documents used to claim ownership of land. However, these are all subject to challenges since they are not a state-guaranteed property right, but merely a record of transfer of property. According to some estimates, more than 60% of litigation pending before our courts is related to land records and allied issues. This also has implications for agricultural credit. Disputed titles hamper the flow of institutional credit, especially to the small and marginal farmers.

Targeted subsidy: The government spends a lot of money on subsidies. Organizing this data to beneficiaries across multiple departments on blockchain, using smart contracts to avoid human intervention and origination of all transactions can have a huge impact on the efficient distribution of grants to the real beneficiaries.

The end use of the grant can also be regulated by programmable tokens that can be facilitated by the blockchain. In this way, the grant can only be redeemed for the intended purpose. Furthermore, the government will also have the power to dynamically manage the validity and value of these tokens based on the evolving situation in terms of emergencies such as natural disasters or pandemics such as covid.

Thus, Blockchain has the potential to radically transform the lives of its citizens and propel India to a leading position in the global economy.

In addition to the above use cases of blockchain primarily by government to citizens, there are several use cases spanning multiple industries that adopt blockchain. Some of the notable examples are:

Blockchain login information: Fake credentials ranging from educational certificates to work experience are a major threat. Startups like VeriOnce are addressing this issue by facilitating issuers to issue these credentials on the blockchain and allowing verifiers to verify the same seamlessly on the blockchain platform thereby saving time and cost for the industry and creating a fair and level playing field for genuine candidates .

Ride sharing using blockchain: The original promise of ride-sharing apps was to improve the quality of service and benefit both drivers and customers by providing a transparent platform. But due to skewed business models and unprecedented power of data, complaints from customers and drivers alike are on the rise. Start-ups such as DRIVE, a blockchain-based mobility platform that seeks to decentralize the ride hailing ecosystem set to provide the much-needed transparency.

Metaverse: Since its launch in 2021, Metaverse has spiraled traditional communication and brings enormous opportunities with it to businesses and people in general. Blockchain is an important building block for the metaverse. Several companies across industry segments have publicly announced their interest in the metaverse. Metaverse platforms like Partynite are revolutionizing the customer experience across a wide range of areas from banking to e-commerce and gaming.

Notably, blockchain is still evolving as a technology, and challenges remain regarding policy and regulatory clarity, decoupling of blockchain technology with crypto, standardization and interoperability. It is also important to understand that blockchain is a foundational technology and requires all stakeholders in the business ecosystem to participate and adopt it.

Industry bodies have played a very constructive role in creating awareness and helping policy makers, industry and start-ups work together to harness the true potential of blockchain technology. It is also encouraging to see regulatory bodies like RBI, IFSCA and SEBI and some state governments like Telangana creating sandboxes to help startups build and showcase solutions and allow a nuanced debate before mass adoption.

Blockchain has actually come a long way from being called a “Solution searching for a Problem” to effective pilots, proof of concepts (PoCs) and full-fledged implementations. The adoption of blockchain has also gone through a maturity curve in terms of identifying real use cases that provide value – now we are at a tipping point in the mass adoption of blockchain. Blockchain has the potential to be a game changer and a leading catalyst in India’s digital vision.

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