The successful use of Blockchain in various aspects of data security does not need any introduction. In lay terms, we can consider Blockchain to be like a peer review process where different and unconnected networks must validate the entry to add to the network. Besides serving the basis of cryptocurrencies, Blockchain has been used in supply chain management, maintenance of land records, banking transactions, copyright purposes etcetera. In India, Blockchain remains a late beginner, considering the gradually evolving regulatory framework. Nevertheless, as an initial step, various state governments have been proactive in promoting Blockchain through policy application or pilot projects for property registration and taxation, issuance of caste certificates and even P2P solar energy trading.
Given the volatile nature of global geopolitics, both, government and private sector could explore synergies in strengthening financial and logistics security through traceable supply chains, financial flows and even building its own Blockchain based 5G network. Our National Strategy on Blockchain is an ambitious document in this regard, working its way to include security beyond just privacy related aspects. The strategy only mentions about endeavours to set up a “multi stakeholder model in evolving national Blockchain infrastructure”, thus leaving substantial room to elaborate on it. The strategy also lists over 40 different applications of Blockchain which, if worked on, could potentially revolutionize our communications and national security infrastructure.
We need to bring these issues in discussion especially when the prevailing international situation demands a complete control and indigenization of critical infrastructure. The Ukraine-Russia war is the latest reminder of the need for having an indigenous communications network that is immune to external destabilizing forces. As the Russian missiles targeted Ukraine’s communications infrastructure, distressed Ukrainians turned to SpaceX’s internet services. In such potentialities, Blockchain based 5G network offers a promising solution. It is an opportune moment for India to explore a decentralized network on the lines of Helium 5G network. Helium’s pioneering efforts in developing P2P wireless network, connecting the IOT devices with the internet network by hotspot hosts to provide coverage could lead the Indian government’s efforts in facilitating its own version of 5G on these lines. An IoT network, as we know, could facilitate connecting devices in a cost-efficient manner. Foremostly, this saves large scale investments in physical infrastructure which still remains the classical mode of building communications infrastructure.
Next, India could explore building its own supply chain network on the lines of Vechain. In lay terms, we can think of Vechain as a “supply chain based solution on Blockchain”. Already, large brands like BMW and Walmart have switched to using Vechain to eliminate discrepancies. Tracking orders moving from origin to destination through blockchain technology will ensure any potential leakage will be checked. This raises the question of its utility especially when we have RFIDs and QR codes to do the same function. The difference is that Vechain integrates the same technology with Internet of Things, wherein the different devices are interconnected at different points of the supply chain and all of this data becomes part of the Blockchain, thus becoming unalterable. Most importantly, a Vechain based solution could help detect counterfeiting of goods, which thrives in India on a very large scale.
Again, the Ukraine Russia war offers some lessons even in the matters of financial security. Following its exclusion from the international financial system, Russia reportedly explored using cryptocurrencies on a large scale as an alternative to continue its trade. This would naturally require large private crypto exchanges to facilitate the fiat conversions. This is an opportune moment for India to think about building its own decentralized exchange to escape dependency on private exchanges. India could also consider building its own blockchain based stock exchange. Foremostly, this will eliminate the brokerage related entanglements and most importantly contribute to transparency of transactions, which will become traceable to the source. Based on the needs of the Indian market, examples of both centralised and decentralised exchanges could be analysed.
Although the Government of India is working on setting up a level playing field for cryptocurrencies, it could still think of a medium-term plan for addressing financial frauds by building its own crypto wallet, backing it with sovereign guarantees. This could become the biggest source of stability for the investors potentially adding to predictable crypto-trends in India.
These suggestions are not novel since they are being implemented by different governments and large-scale private players abroad. Thus, India should not miss the bus.
About the authors
Siddharth Acharya is an advocate with the Supreme Court of India and co-founder of Centre for Blockchain Policy and Research (CBPR). A researcher on tech-security interface, he is an empanelled lawyer with Brahmos Aerospace, Public Sector banks and PSUs.
Prateek Joshi is a Dphil candidate at the University of Oxford and a co-founder of CBPR.