Fri. Oct 22nd, 2021


As per the draft framework, a copy of which has been reviewed by The Indian Express, all applications of blockchain technology are likely to be explored by the government under the leadership of the IT Ministry.

The Ministry of Electronics and Information Technology (MeitY) has prepared a draft framework for the use of blockchain technology in government services and intends to use it in the areas of property record keeping, digital certificates, power distribution, health records as well as supply chain management.

According to the draft framework, a copy of which has been seen by The Indian Express, all the applications of blockchain technology are likely to be explored by the government under the leadership of the IT ministry. The draft, called the National Strategy on Blockchain, is also likely to explore the possibility of use of the technology for vaccine and medical supplies logistics management for future purposes.

Virtual and digital currencies such as bitcoin, however, have been kept out of the ambit of this framework and are unlikely to be included in the near future, senior government officials said.

“Despite our best efforts, digitisation of the banking and currency system has picked up only of late. Our banking systems still need have non-repudiation requirements through in-person verification. Therefore this is a challenge to implement technological solutions for such requirements especially for crypto-currencies,” an official said.

Since the blockchain technology operates on a distributed ledger system which is owned by everyone, participants can read, write, or make changes to the ledger.

In order to make the technology better suited to the needs of the government and that of India, the national framework has therefore suggested that blockchain could be set up in one of the four architectures, namely, public and permission less, public but with permissions, private and permission less, and private and with permissions.

A public and permission less architecture would mean that anyone can join, read, write and commit changes to the blockchain, would be hosted on publicly available servers but would have low scalability. On the other hand, a public architecture with permissions would allow only authorised persons to write and commit changes to the architecture.

Similarly, a private and permission less architecture would mean that though only authorised persons would be allowed to make changes to the distributed ledger, there would be no bar on the number of number of participants that can operate on the technology.

The benefits of the technology aside, the draft framework has cautioned that legal rules and guidelines on how to use the technology and limit its abuse should be drawn up before proceeding further.

The framework draft has also cautioned about certain issues involved with the adoption of blockchain technology such as replication of data on all nodes, lack of appropriate skillset and human resources in the country as well as threat from rogue nation state actors.

“Blockchain data is stored on every node on the network and hence privacy is not an inherent feature that Blockchain traditionally provides. The data should be stored in such a way that the privacy of an individual is not compromised and appropriate consent mechanisms should be adopted in line with data protection laws,” the draft of the framework says.