In India, the government is playing a key role as a consumer of blockchain solutions and in driving mass adoption of the technology. Nearly half of the states in India have initiated blockchain projects to address different challenges of citizen service delivery, with the government of Telangana and the government of Andhra Pradesh emerging as two of the leading states in terms of blockchain adoption in the country, a new research by the National Association of Software and Services Companies (NASSCOM) and Avasant found.
According to the India Blockhain Report 2019, released in February, there are currently more than 40 blockchain initiatives being undertaken by the public sector in India with about 92% of those in proof-of-concept or pilot phase and 8% in the production phase. While most of these projects are still in the early stages, state governments have taken a progressive approach to ensure startups and niche providers have a conducive framework to participate in these initiatives.
State governments are collaborating with different stakeholders to accelerate blockchain adoption in public sector projects. Such partnerships include the government of Andhra Pradesh and Zebi, a partnership that focuses on developing blockchain-based solutions in land registry, the municipal corporations of Bankura and Durgapur districts in West Bengal and Netherlands-based company Lynked.World, which are building a blockchain-based platform for issuing birth certificates, and the Assam government and Nucleus Vision, which are working on setting up blockchain solutions for governance process and other citizen-facing applications.
According to the report, prevalent use cases in India’s public sector include land registry, farm insurance, digital certificates, and e-governance.
In addition to the public sector, private enterprises across all key industries are also identifying different applications of blockchain technology. The banking and financial services industry has seen the highest adoption, but other industries, including healthcare, retail and logistics are rapidly catching up.
Top use cases being explored in the private sector include trade finance, record keeping, supply chain management, anti-counterfeiting, peer-to-peer insurance, KYC, cross-border payments, asset tracking, food distribution, drug provenance, health records, intellectual property management and fraud detection.
Though blockchain adoption in India is rapidly growing, the country’s blockchain ecosystem has not taken off as fast as it has globally, the report claims. Of the US$5.6 billion raised by blockchain startups globally to date, India has attracted only a tiny fraction (0.2%). Furthermore, Indian startups only accounts for just 2% of all blockchain startups worldwide.
To accelerate startup growth and drive the sector forward, the report advises for the establishment of conducive regulatory and government procurement policy environment, including the creation of a blockchain working group and a regulatory sandbox to encourage blockchain innovation.
“India needs to act fast and work consultatively with the key stakeholders in the crypto/blockchain community and provide regulatory certainty and clarity around blockchain technology (specifically around cryptocurrencies and digital tokens),” the report says.
“A blockchain working group (similar to the Dutch Blockchain Coalition) or a self-regulatory body (similar to the one in Japan) can help drive the development of regulations or standards required for the growth of the overall ecosystem in India … A blockchain regulatory sandbox could also help drive product innovation in the country and also signal positive intent to the blockchain startup/developer community, while protecting investor and consumer interests.”