[Policy Speech] Caroline Malcolm OECD Head, Blockchain Policy Centre

[Music] hi everyone thank you very much for inviting me to be here I'm really excited to be back in Seoul and to be here for the first Korean blockchain week as Gabriele mentioned I'm from the OECD the Organization for Economic Cooperation and Development and I head the blockchain policy Center at the OECD Korea is of course a member of the OECD as well as 35 other countries across the world representing a very broad swath of the globe we also tend to work very closely with other forums such as the g20 APEC so you may have seen our work and our name across these different forum I'm going to talk to you today a little bit about the work that we've been doing at the OECD since we established the blockchain policy Center where we see the vision going forward in terms of policy and the importance of having an internationally agreed policy framework when it comes to blockchain innovation and adoption that first I'll start with being a bit of the history of the OECD's blockchain policy Center because the center in is actually quite a new innovation for the OECD there is a reason doing work in this space for about five years so far beginning looking like most people do when they come to blockchain and DLT looking at crypto currencies in particular assessing their impact on financial markets in the last two two-and-a-half years our work has expanded greatly however and I'll talk to you a little bit about that across the various different areas that we now cover which really crosses all of the policy areas that the OECD now covers but it was at the end of 2018 as part of a broad horizontal project that the OECD called going digital which looked at digitalization across the policy spectrum that the OECD members decided to focus going forward on to technologies in particular you'll be unsurprised probably to know that those two technologies were artificial intelligence and blockchain and that led to the creation of the blockchain Policy Center when I think about the work that we do at the blockchain Policy Center it really covers these five areas that you see on the screen and I'll talk about each of these in a little bit more detail but policy research guidance and the development of recommendations and international standards capacity building convening events and of course partnerships because we know it's so important to work with different stakeholders including through events like this one and I really hope that I was in coming days that I'll have a chance to talk with many of you about the work that you're doing as well as the work we're doing and how those two may intersect but firstly on on policy research and I'll just slip forward there the word that we do as I said began looking at cryptocurrencies but today covers a much broader range of policy areas which we try and fit into one of four broad themes finance supply chains government and public goods what we call governing blockchain when I think about finance it's quite a broad area however it includes things like cryptocurrency stable coins tokenization of physical assets and securities IC owes the tax implications of all of these new DLT based digital financial assets but also things like corporate governance for example we've just published some work looking at how blockchain can be used to improve corporate governance we've just started a new study focusing particularly on use of DLT to improve proxy voting processes the OECD also houses the Financial Action Task Force and I'm sure many of you are very familiar with their new regulations in the AML and CTF sector concerning virtual assets we've also done work on looking at blockchain as an enabler of infrastructure investment because what we really see in the large infrastructure project space is difficulties with access to finance and a lot of those difficulties come around having good quality information that finance institutions financial institutions are willing to take on the commitments that are involved in very large projects what we're thinking in this space there could be a good opportunity to use blockchain to improve the availability of reliable high quality information about different infrastructure projects and in turn that that will give financial institutions greater faith in the projects in which they are asked to invest in so just through those few examples you can see the really broad scope of the work under the heading that we call finance then we come to supply chains supply chains is work for us which really has has two aspects on one it's the sort of more traditional track and trace so how to improve efficiencies and global value chains and the role that blockchain and DLT can play in that but it also looks at more qualitative aspects of supply chains for example where the company is a meeting that you do certain due diligence requirements in their supply chains is there child labor is there slave labor being used in a particular supply chain can that information be tracked using DLT what are the working conditions across the supply chain if a company has agreed to meet certain conditions through its suppliers can we use this technology to better understand whether those commitments are truly being met and provide greater confidence not just to shareholders but also to consumers as well so Daria's government and public goods now this sort of headline report in this areas a piece called blockchains unchained and really looked at the development of public services using this technology examples which I'm sure you've all heard about you know whether it be iid for citizens land registries medical records but for us it also includes looking at issues like development aid can we make the development aid process better can we make it more consistent can we really make sure we have a true understanding of where money that is spent the development of is really being spent it's also issues like migration some interesting projects going on across the world looking at how we can improve migration policy using this technology and fourthly is the area that we call governing blockchain probably a cross-cutting area of things which are relevant regardless of the particular application of the technology so if I think about those we're talking about things like digital identity interoperability and scalability data management and data privacy so who actually owns and controls the data on a blockchain and how can we make sure that that actually meets data standards which are put in place by different governments so those are all areas that that we work on when we talk about doing policy research and also guidance recommendations and standards we also want to take capacity-building so working with OECD staff but also with OCD member countries to improve awareness old deity and how it is being used to both change the environment in which policies that governments develop with the assistance of organizations like the OECD take place so how is the environment that we working and changing and how is it being changed by deity and what does that mean for policy makers but also how can be used as a tool to achieve policy objectives so some of those ideas I was just talking about in terms of government and its applications convening events some of you may be aware we recently held our global blockchain Policy Forum so it's a it's a blockchain forum very much like this but entirely dedicated to the policy implications of the technology we hope that in Paris it's an annual event of course you're all very welcome to join us next year but if you missed this year you can also find all of the details and all of the sessions recorded live online had some very interesting discussions particularly around issues like Central Bank digital currencies the new Libre stable coin developments but also across all of these areas which i've been mentioning and finally partnerships so this is working with other international organizations the IMF the World Bank the U in regional organizations and agencies I know Pateros is just on stage earlier talking about the work that's being undertaken at the European Commission and they're one of our closest partners in this space - just Maps focus because I know that we've covered a lot of different topics that the OECD is currently working on if I think about what is the main area that we're now looking forward to develop you might think about the sort of emergence of the understanding of our members of Technology I bring it back to the OECD for blockchain forum in the first year was really very much about educating members you know what is blockchain what's happening in industry trying to understand what this is technology as we know policymakers can sometimes lag a little bit behind the industry when it comes to these questions that was really helping them understand what's this technology and why is it such a breakthrough technology and why do you need to be paying attention this year we focus a little bit more on the policy aspects so yes an update on what is happening in industry and what we can expect going forward but also starting to consider well ok translate that into policy what does it mean we've taken for granted for a long time that a lot of the policies we develop what we call tech neutral however when we come up with a technology like blockchain which in its foundations differs fundamentally from many to technologies we've seen previously those ideas of tech neutrality and our policies start to really shift and I think some of the best examples that can be seen for example and think about data privacy policy some of you may be aware may be impacted but for example by the new European GDP our regulations data privacy regulations some of the very concepts in that look for somebody who is the data controller for example how does that work though when you were having a decentralized system who actually controls the data who has ownership over the data and so how do you apply that policy framework to such a very fundamentally different technology like DLT with the closure of this year's forum what we're going to be looking at more closely in the 12 months to come is this first idea see on the screen a framework of policy principles for blockchain and distributed ledger technologies more broadly while we're looking here is to seek an international consensus on an overarching policy framework that can guide governments through the process of blockchain innovation and adoption to make sure it's in line with the community standards that are expected but also to support innovation make sure the innovation is not crushed through regulation and policy it's a delicate balance but we want to make sure that we're not left in the position we were left in in more recent technological developments where policy makers have come very late to the table and then they're trying to apply regulation over an industry which is already very well developed causing disruption for the industry we want to provide certainty to the industry and we want to do that as early on in the cycle as possible we recognize at the same time policies coming too early can again hamper innovation so it's again for making that balance between principles which are meaningful but also high-level enough to actually allow innovation to continue in the industry so if I think about what you can look to see from the OECD in the next 12 months and also working with our partners such as the g20 it's a framework of policy principles for block trade and I think that will be quite a fundamental shift from where we are today to where the industry can expect to be and in 12 months time we also have some work ongoing of course a very popular topic of stable coins and central bank digital currencies as well as the tokenization of physical assets we're looking at blockchain to improve due diligence and supply chains and actually just released a report on this topic and will be undertaking some pilot work with some partners over the next six months government policies to support DLC innovation and adoption in small to medium enterprises the OECD has done a lot of work around digitalization more generally and what we've seen of course is that you tend to have the industry led by either very very large players or very small star making sure that others who are not necessarily blocking companies or technology companies understanding the technology can access the technology and then implement it into their processes is a really important meeting sure that everybody takes part in the revolution that is coming through technologies like blockchain making sure there is not a two-tier development of the technology in effect and of course you know the OECD one of the cool things that we do is work on international cooperation and so looking at how blockchain based systems can be used to improve international cooperation I think about one specific project we have in this space for example it's looking at how and the anti-corruption networks that we have how law enforcement officials in different agencies could work better together through access to a deal tea based system I think that's something elsea coming out of the work we're doing in the next 12 months or so there's a lot more which I could cover but I know that that time is limited so I'll just leave you there with my detail so that we can follow up and I hope to have the chance when I'm here in co2 to speak with many of you but if we don't have the opportunity please follow our work and also please feel free to to reach out to me through my email there also online on social media so please don't hesitate don't be shy to talk with us about the work that you're doing how you think it may be affected by the work that governments are doing in terms of setting a policy framework because we really want to make sure that this overarching framework of blockchain policy principles doesn't hamper innovation but does provide guidance to how innovation can occur in a way that meets community standards thank you very much [Applause] [Music] you