Delivering public services transparently and securely is a challenge for governments and administrators and over the world they are turning to distributed ledger systems such as blockchain technology to offer more cost effective structures, that are secure, efficient, and reliable.

Last month the Indian government launched the Vishvasya-Blockchain Technology Stack, that would offer blockchain-as-service, the intention being to make governance more transparent, efficient, and accountable.

The government’s initiative will simplify the integration of blockchain technology into various applications, says Sharat Chandra, a blockchain and emerging tech evangelist.

Instances of data breaches and personal information of citizens floating around in the dark web is worrying for people.

“While Aadhaar provides identity verification, Vishvasya can ensure that the data associated with those identities is immutable and tamper-proof,” Chandra told businessline in an email interview, where he spoke about CBDCs leveraging blockchain tech, the potential of tokenisation in industry and distributed ledger technologies.

Chandra is working with a few state government-affiliated entities on establishing token standards for land records, with the goal of facilitating seamless transfers of land ownership and Transfer of Development Rights. He was also involved in shaping the National Strategy on Blockchain by the Ministry of Electronics and Information Technology (MEITY) in 2021.

Q

Recently, the Government of India launched a technology stack called ‘Vishvasya’ that would support Blockchain use across the country. How will it complement the existing tech stack comprising Protean, Aadhaar, Digilocker, DigitYatra?

The Vishvasya stack is designed as a Blockchain-as-a-Service (BaaS) platform, which means it simplifies the integration of blockchain technology into various applications for state governments such as Tamil Nadu, Odisha, Bihar and Karnataka which have blockchain projects underway and are leading in blockchain adoption.

By complementing existing frameworks like Aadhaar and Digilocker, Vishvasya enhances security, transparency, and efficiency in public service delivery. For instance, while Aadhaar provides identity verification, Vishvasya can ensure that the data associated with those identities is immutable and tamper-proof. This synergy allows for a more robust digital infrastructure where services can be delivered securely and efficiently across sectors like healthcare, education, and governance.

Q

How will CBDCs leverage Blockchain tech? How will it aid in offering cross-border payments, transactions and do you think at some point it will replace the existing networks such as SWIFT?

Central Bank Digital Currencies (CBDCs) are poised to significantly benefit from blockchain technology. By leveraging programmability, quantum resistant cryptography and on-chain settlement, CBDCs can enhance transaction speed and security, especially for cross-border payments. Blockchain allows for real-time settlement of transactions, which can drastically reduce costs associated with traditional systems like SWIFT. While it’s highly unlikely that CBDCs will completely replace SWIFT in the immediate future, they could serve as a complementary system that offers faster and more transparent transactions globally.

Q

There is a lot of buzz around tokenisation. While theoretically this enables historically illiquid assets to convert into tradeable value-generating assets, which industry is likely to be ahead? Also, from the perspective of government regulations, how equipped are we?

Tokenisation has immense potential across various industries, but I believe real estate and financial assets such as bonds, money market funds, private equity and government securities are likely to lead the charge. These sectors have traditionally faced liquidity challenges, and tokenisation can democratise access by allowing fractional ownership. However, regulatory frameworks are crucial here. While we’re making progress, ongoing dialogue between regulators and industry stakeholders will be key to navigating this evolving landscape.

Q

In the near future, where do you see usage of DLTs like blockchain gaining presence in the current financial infrastructure? Already smart contracts have found application in areas such as trade finance, supply chain management, insurance claims settlement, and real estate transactions.

In the long term, I see Distributed Ledger Technologies becoming integral to our financial market infrastructure in several ways. Full scale adoption of tokenisation and DLT markets are still a couple of years away. A lot of groundwork needs to happen in terms of building interoperability standards and consensus on regulation of digital assets.

Smart contracts can automate processes in trade finance and supply chain management, reducing delays and increasing trust among parties involved. Indian Banks’ Digital Infrastructure Company, a consortium of 18 banks , is currently working on tokenisation and smart contract-based deep-tier financing for MSMEs as part of RBI’s regulatory sandbox. These initiatives will aid in blockchain adoption in the banking and financial services sector.

As more industries recognise these efficiencies, I expect a broader adoption of blockchain solutions across sectors such as sustainable finance and blockchain based trading of carbon credits, especially under the aegis of GIFT - IFSCA.

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