Since 2018 when the World Economic Forum declared that blockchain would be among other technologies defining the emerging revolution, there has been a lot of scepticism around what it can do that cannot be done with existing systems.
Academics argued that there isn’t a problem that blockchain is solving. In particular, Stefaan Verhulst, co-founder of the Governance Laboratory (GovLab) at New York University said recently that some of the technology’s challenges are a "lack of governance and ethical frameworks that can help scale the use of blockchain” and that it is "still being promoted as a solution in search of a problem.”
To the contrary, blockchain’s safety, transparency and immutability have never been questioned. There is always a problem when these three attributes are missing especially in transferring or exchanging anything of value, ranging from assets to payments and even data transfer.
What has not happened is the articulation of policy and regulatory frameworks that will guide further development of the technology.
This is perhaps what has triggered a series of high-level policy engagements across the world to chart the way forward.
Last week, the Organisation for Economic Co-operation and Development (OECD) hosted a Global Blockchain Policy Forum in Paris to deliberate its development.
Specifically, the forum sought to assess the development of blockchain in the past 12 months and delve into some of the specific challenges to implementation and adoption, discuss the emerging policy responses, and share the best practices, and investigate uses of blockchain in specific policy areas, highlighting the work that the OECD and other stakeholders are doing.
I chaired a panel discussion on blockchain in Emerging Markets: Exploring the Challenges and Opportunities.
Some of the specific emerging markets issues included lack of ICT infrastructure to support emerging technologies, bureaucratic governments that do not tolerate innovations that seem to undermine their grip of power on citizens, and lack of policies to govern blockchain applications.
It was, however, noted that most emerging markets have found the lack of 20th-century legacy systems an advantage to leapfrog.
The tempo for policy engagements around blockchain is gaining momentum, especially in Europe.
On the application side, the revelation by CoinDesk that the government of Catalonia in Spain is developing a Digital Ledger Technology-based identity platform that seeks to "give citizens control of their own data when interacting with online services,” heralds the beginning of dealing with the problem of privacy breaches by organisations that hold individual data.
The Catalonia Identity project falls within the EU’s standards that were developed to encourage digital identities, according to the May 2019 report, Blockchain and Digital, by the European Union Blockchain Observatory and Forum.
The report aims to help streamline the identity systems used in the Union by using DLT to minimise breaches. They have established that blockchain is a powerful tool for developing digital identity systems, notarising credentials and facilitating smart payments.
In these emerging technologies, Africa has one last chance to see the advantage not having legacy systems, a young population and access to knowledge through the Internet to boost economic development for greater prosperity in the continent.
For this to happen, the African Union must lead the way in dynamic policy formulation, individual countries must make the right decisions to invest in ICTS and facilitate its accessibility and affordability.
There is no doubt that blockchain and other exponential technologies are gaining acceptance across the World. We cannot be left behind once more.
The author is an associate professor at the University of Nairobi’s School of Business.