The Emergence Of Blockchain Technology – Key Points And Takeaways Discussed In The September 2018 OECD Blockchain Policy Forum

; posted on
September 19th, 2018

On September 4 and 5th, a Forum on the future for global Blockchain policies was held at the OECD in Paris. The Blockchain Forum was brilliantly hosted by the OECD representatives, specially by its Secretary-General, Mr. Angel Gurría, Director for Financial and Enterprise Affairs, Mr. Greg Medcraft, “#Going Digital” OECD team, Ambassadors Mrs. Monica Aspé and Mr. Chris Sharrock and several other OECD members.

Also, Prime Ministers of Mauritius, Serbia, the Premier of Bermuda, as well as representatives from civil society, organised labour and other International Organisations, corporations and consulting firms joined the Forum presenting their actively pursue to the opportunities presented by Blockchain technology.

The origin of Blockchain resembles the year 2008, curiously in the middle of the financial crisis, as the underlying technology of bitcoin; however, Blockchain technology is broader than bitcoin or cryptocurrencies, is a form of distributed ledger technology, that acts as a distributed and trusted block record of transactions from one party to another. Due to its distributed ledger and shared technological nature, as well as, no requirement of manual intervention, Blockchain has a great potential to drive efficiencies, more transparency, and bring new ways of doing business in several sectors, from transfer pricing, tax and finance to healthcare and in other industries.

Blockchain is already being used by several governments and goes far beyond a simple financial application.

Some interesting applications of Blockchain were presented in the Forum by countries’ representatives, corporations and consulting firms, looking at how Blockchain can improve the transparency, accountability and efficiency of transactions and services.

To name a few, Ghana developed a solution named “BenBen”, that provides an Ethereum-run digital register system of all land registries across the country. The system is able to certify land information through a combination of satellite imagery and on-the-ground verifications. The Monetary Authority of Singapore is developing a project named “Project Ubin”, comprised of a consortium of banks and regulators specialized in digital ledger technologies (Ethereum platform) to develop and apply a Blockchain-based transaction process with a digital Singaporean dolar to allow incorruptibility and to faster conclusion of financial transactions with no centralized human checks required. Sweden, in its turn, is conducting trials which reduces the time it takes to buy property from several months to a few hours. Other interesting example, is of the City of Zug in Switzerland, that is developing a Blockchain-based identity management solution, which will be used to bring security to distance voting in the US elections.

Although Blockchain technology has evolved from a specific niche to a wider digital economic transformation, there is still no clear understanding about what a Blockchain technology is and its potential impact to private and public sector. Therefore, the OECD aim, in addition to several other initiatives as part of the “#Going Digital” Project, was to bring about open and multi-lateral discussion over a better understanding of the technology and keep governments and private sector up to date with the developments.

Key takeaways of the Forum

The OECD initiatives on digital transformation intend to focus on some of the emerging technologies which will drive the digital transformation: specially, Artificial Intelligence (AI) and Blockchain. The Forum contributed to bring about the discussion of the future use of Blockchain in areas such as migration, health, energy, transport, agriculture and development assistance, as well as, its potential benefits for compliance and enforcement, on supply chain management, tax and finance sector, that could disrupt the current business models of corporations, citizens, governments and regulators.

The key takeaways are:

  1. It is essential to build an understanding in the policy community of what blockchain is and what it does; 
  2. It is important to identifying what impact this technology could have across a wide range of fields and for specific policy outcomes and to balance this with the need of data privacy; and 
  3. It is crucial to articulate the role of governments and international organisations in helping economies and corporations adapt.

OECD is going to publish a report, planned to be issued in October 2018, that aims to be used as a guidance to implementing a Blockchain technology. We congratulate the OECD for the excellent initiative undertaken to prepare such comprehensive Blockchain Forum, and bring this new technology to a wider audience. Blockchain can be an efficient technology to track inter-companies’ transactions, enabling a more accurate delineation of transactional datapoints to drive a more precise compliance on transfer pricing documentation. 

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