What is Blockchain?
The development of Blockchain is rumoured to be by an individual or group of individuals by the pseudonym “Satoshi Nakamoto” and was initially developed for digital currencies.[1] However, Blockchain is gaining more potential use for the technology due to its decentralised nature. Blockchain, according to Maryanne Murray “is a database that is shared across a network of computers.”[2] The database is recorded and utilised by all and is difficult to change once recorded.
Thus, in a simple description, Blockchain is a “time-stamped series of immutable records of data that is managed by a cluster of computers not owned by any single entity. Each of these blocks of data (i.e. block) is secured and bound to each other using cryptographic principles (i.e. chain).”[3]
The following are traits that make Blockchain unique:
- It is decentralised with no central authority
- Enhanced security
- the information it holds is open to all and anything built on Blockchain is transparent to all.
- It utilises no transaction cost.
These traits have made Blockchain have disruptive characteristics as they may develop to replace all processes and business models that charge a small fee for transactions and major currencies.
What is the status of the guidelines?
As part of the Federal Government’s agenda for the digital economy, the Federal Ministry of Communications was re-designated as the Federal Ministry of Communications and Digital Economic (FMoCDE) on the 17th of October 2019. Therefore, the Ministry was charged with developing and implementing a Digital Economic Policy and Strategy for Nigeria. Thus, the drafting of the Draft National Blockchain Adoption Strategy (NBAS) by the Ministry is a Federal Government policy statement. The strategy is an “essential ‘pre-read’ to implementing a blockchain system in Nigeria and guide broader thinking in the area. Examination of the provisions Comparative analysis of other county’s policies.”[4]
Examination of the NBAS
An examination of the NBAS discloses the strategy for the Blockchain adoption in Nigeria to be focused on the following six key initiatives:[5]
1) Establishment of Nigeria Blockchain Consortium.
2) Strengthening the regulatory and legal framework based and technology-neutral and guided by the Oxford Blockchain Regulation Framework.
3) Focus on the provision of National Digital Identity through harmonisation of existing databases.
4) Promotion of Blockchain digital literacy and awareness.
5) Creation of Blockchain business incentive programmes.
6) Establishment of a national blockchain sandbox for proof of concepts and pilot implementation
The six key initiatives under the NBAS are derived from the eight pillars of Nigeria’s Digital Economy Policy and Strategy (2020 – 2030). Thus, the strategic objectives of the NBAS initiatives are:
1) the provision of Regulatory Oversight which entails the review of existing laws and compilation of laws relating to blockchain technology
2) Stimulation of innovation and entrepreneurship to promote the development of blockchain technology.
3) Security, trust, and transparency in the value chain
4) increasing investment opportunities and job creation based on the use of blockchain technologies.
5) Use of blockchain technology in governance through support and promote success stories on the integration of blockchain technologies in the public sector
Other Jurisdictions and Blockchain
The United Kingdom has implemented several initiatives in the development of Blockchain, especially in the financial sector. In terms of investment, the UK Government created a £20 million GovTech Catalyst Fund to explore technology-based solutions for public sector challenges, potentially including the use of Blockchain. However, there is no blockchain-specific legislation or regulatory rules addressing blockchain technologies.[6]
In the United States, there is no comprehensive set of legislation to govern Blockchain. However, the Federal and state governments acknowledge that blockchain technology is an integral part of US technological development. The following are draft bills:
- In February 2019, the Blockchain Promotion Act was introduced in the House of Representatives to establish a blockchain working group within the Department of Commerce.[7]
- In April 2019, the Token Taxonomy Act was introduced to clarify the status of certain cryptocurrency activities.[8]
- In September 2020, the Blockchain Innovation Act was introduced in the House of Representatives to direct the Secretary of Commerce to conduct studies and submit to Congress reports on the state of the blockchain technology.[9]
Additionally, in the European Union countries such as the Netherlands whilst having no comprehensive legislation governing Blockchain, they have also recognised the technology’s importance. They are developing policies to benefit from it.[10] The primary regulators in the Netherlands on this subject are the Data Protection Authority (Autoriteit Persoonsgegevens), the Netherlands Authority for Consumers and Markets (Autoriteit Consument & Markt), the Dutch Central Bank and the Dutch Authority for the Financial Markets.
Conclusion
It is without a doubt that the 21st century is riddled with technological marvels and development. Notably, digital technology continues to enhance day to day activities and daily routines. One of such digital technological marvels is the development and utilisation of blockchain technology. Whilst the NBAS does not go all the way to make concrete policy statements, it remains an essential document as it is one of the first governmental approval and recognition of the use of blockchain technology.
