2018: A year in DLT
Wallet.Services’ Strategic Transformation Director Dr Hannah Rudman reviews a year in which Distributed Ledger Technology has moved into the mainsteam, with public sector projects building trust and transparency into citizen services, and private sector projects reducing timescales for tracking and tracing products from a week to just 2.2 seconds.
2018 was a year of maturation for distributed ledger technologies (DLT) with ever increasing clarity from regulatory authorities regarding DLT, blockchain and digital assets. Fortune 500 companies and institutional investors are accepting cryptocurrencies, utility tokens, and stable coins as an asset class. Regulators and governments around the world (in India, Malta, Gibraltar, and various US states) released frameworks that foster innovation rather than hinder it, and this should enable the full potential of DLT to be proven during 2019.
In April, 22 countries — 21 EU member states including the UK, and Norway — signed a declaration that created a European Blockchain Partnership (EBP). During 2018, five more European countries joined the EBP: Greece and Romania in May, Denmark and Cyprus in June, and Italy in September. The EU is expected to increase its investment in DLT-related projects from $94 million in 2018 to $386 million by 2020. Finally, in December, The European Parliament called for measures to boost blockchain adoption in trade and business across the region. The Parliament adopted a resolution “Blockchain: a forward-looking trade policy,” setting out how this nascent technology could improve EU trade, including free trade and mutual recognition agreements. The resolution marks the latest positive step toward blockchain adoption in the EU region. On 4th December, seven southern European states – France, Italy, Spain, Malta, Cyprus, Portugal and Spain – signed a joint declaration to promote the use of blockchain in order to transform their economies. Switzerland (not a member state) also developed friendly regulation during 2018.
UK MPs Eddie Hughes, Luke Graham and Lee Rowley built on the work of the All Party Parliamentary Group, and wrote Unlocking Blockchain, which the Prime Minister endorsed, in a Prime Minister’s Question time in July, and recommended should be read by all MPs.
There was a 2018 update by Lord Holmes of his 2017 “DLT For Public Good” report, detailing that HMRC has confirmed the need for proofs of concept for future borders; FSA and Defra have funded proof of concepts and pilots; MOD, NHS, DfT, DWP and the Police are all considering or planning DLT proofs of concepts or pilots; and regulators are conducting studies and assessments. Meanwhile, HM Land Registry’s Digital Street initiative has been researching the innovations possible if they use DLT.
Scottish MPs such as Joanna Cherry MP QC, Martin Docherty-Hughes MP, Tavish Scott MP and Liam Kerr MP, and Ministers such as Ivan McKee MSP welcomed Wallet.Services’ report commissioned by The Scottish Government: Distributed Ledger Technologies in the Public Sector.
Wallet.Services was also awarded a two year contract to work with the Scottish Government to reduce friction and build trust and transparency into their citizen services.
In the private sector, Maersk, Carrefour and Walmart completed pilots testing distributed ledger supply chains for shipping and food. Using existing systems to trace food from producer to consumer took a week, whilst the blockchain system took 2.2 seconds. Maersk, one of the biggest logistics companies in the world, now has a single source of truth shared by its customers and suppliers. Its DLT system at international ports reduced the transit time of a shipment by 40%. The World Economic Forum estimated in September that DLT could stimulate a trillion dollars more trade from underdeveloped countries and small businesses, potentially increasing total global trade by 15%.
In 2019, Wallet.Services is looking forward to working with our customers to build further DLT proofs of concept, pilots and production systems using SICCAR software. This will build on previous work in a number of sectors, including complex supply chains in the oil and gas sector.
As well as increasing trade and reducing cost, SICCAR helps public and private sector bodies work together to build trust, security and transparency. This is highly relevant, for example around the integration of health and social care, where the cross-organisational delivery of services is increasingly required. SICCAR improves safety for citizens by breaking down organisational silos and allowing the secure sharing of sensitive data.