Blockchain Moves to the Public Sector

[Music] great that is yours thank you so much hello and welcome everyone uh good morning if you're in the uh the the northern uh sorry you're in the the us or in north america south america good afternoon if you're here in europe and good evening if you're in asia um we're um so hello and welcome to blockchain moves to the public sector i'm going to be the the host today as as mentioned by daniel myself i'm i'm the ceo and founder of a company called settlement we've worked on a number of government related initiatives from voting in the 2019 presidential election in indonesia to land registration use cases digital identity and company identities um the data for common uh purpose initiative at the world economic forum we're supporting and also an initiative around subsidy and aid distribution that we did together with the islamic development bank so quite a lot of um interesting experience and throughout the week we've heard a lot of got a lot of insights into you know blockchain and supply chain and blockchain and pharma we there was sessions on d5 and cbdc and now i guess the question is what about the government sector and what about the public sector so i'm really excited to have um uh kimo makinen from the ministry of finance in finland uh petra zilgelvis who's responsible for digital innovation and blockchain at the eu and of course on last but not least andreas hartel who's the head of strategy covering ai data economy blockchain and so forth at the the german federal ministry for economic affairs and energy but so welcome everyone and welcome to the panelists and uh i would thanks for joining uh today for this uh exciting session to hear more about what's happening in the public sector uh to kick it off why don't we start with a round of introduction so andreas could you maybe give us a bit more information a few minutes to introduce yourself in your background and matthew thank you very much for the european blockchain convention thank you very much for having me and for organizing this panel i think it's a great opportunity to discuss how blockchain can improve the public sector um and and the digital transformation as such so as already said i'm head of the division artificial intelligence data economy blockchain within the federal ministry of economic professionality i'm located in the task force artificial intelligence and digital technologies so next to artificial intelligence not the strategic um issues that go with that um regulatory issues so we currently prepare in the ai regulation where we are awaiting uh proposals from the european commission i'm also in charge of the data economy and all that goes with that and also blockchain and the division i'm hadi was one of the drafting units for the national blockchain strategy i think we will talk about that later on i already presented it at the previous european blockchain convention in september previous year uh so i will not go again on that in in much into depth but um yeah i'm really happy to be here again and um thank you very much hey thanks for that andres uh petrus can we come over to you for an introduction gladly i'm better silgalvis i'm head of unit for digital innovation and blockchain in the european commission i'm also co-chair of the european commission's fintech task force i'm a lawyer by background my doctorate is in is in law so hopefully i understand relatively well the the computer science the technical specifications but i'm coming from the legal side and that also hints at a little bit our strategy which started us with a think tank uh the eu blockchain observatory and forum which is the knowledge for us we work with andreas and the other member states in the european blockchain partnership of 29 countries building the european blockchain services infrastructure and then we come with complementary and targeted legislation as well as working on technical standards and financing research supporting startups and with a investment fund for ai and blockchain well very broad scope of responsibilities but i'm sure you have a lot of insights to share with uh with the audience today uh so over to yukimo can you tell us a bit about yourself yeah sure thanks thanks for the invitation i come from ministry of finance where i work as a senior advisor in department which is responsible among other things for steering the public sector digitalization funding and common e-gallery components also like public sector eid portal and authorization services i'm not a lawyer not an economist my background is from computer science with blockchain scene i have to say i wasn't there in the early days but ever since 2016 uh i've been involved in various discussions i would also like to point out that um one of the activities we have had is the public sector blockchain uh network for experts in in various agencies uh which which is it has been ongoing ever since 2017 and it is actually now a nordic uh network of experts since uh 2019 we had our first uh meeting in stockholm where norway and sweden was also participating as well but that's maybe a short introduction of me great okay thanks chemo uh all right so with introductions out of the way i'd like to start with the first question and for this one i'm going to pose the question to to we'll go around the same circle andreas to petrus to chemo to share views on on the topic of um on on on well blockchain is you know seen as a layer of trust and transparency um and in the context of the collector um how do you in your opinion or in your view how can dlt and blockchain optimize citizen trust for in government um would you like to share thoughts on that starting with you andreas so thank you so i mean it's very basic um transparency and accountability are key in an open and democratic society for for the public service um we're not here on our own we have a mission uh for you know uh the city the the society for citizens for the companies and i think that you know a decentral and open source solution is um in principle improving transparency and therefore accountability in um public services i think there is you know this this um promise we see in in dlt and blockchain solutions to improve transparency and accountability that are very democratic you know values um to serve i think where um especially when it comes to public services i see two major fields not exhaustive but maybe two major fields of application for blockchain technologies one is registers the other is identity so i mean having a register is very typical for a public administration um i'm also in charge of open data i'm currently implementing the open data public sector information directive international law we're currently in the legislative procedure and um you know it's very typical that that public administrations have registers and the other field of application i see for blockchain is identity and this is also one of the larger fields of action we currently have in germany uh to improve identities for citizens but also and this becomes more and more important also on the internet of things that also you know things that may need a secure identity in the in the network in the internet of things so with registers maybe to you know um uh to i don't know a race a larger question the thing is at least in germany there are already lots of lots of registers in place and actually they work very good and the the big question is now and i'm really you know um someone who supports blockchain but the big question is is blockchain more efficient should i switch the operator the in operation the register operation into blockchain just because there's blockchain so what i think really is a decisive question is is blockchain more efficient to have any benefit in you know changing to to blockchain and maybe a third field of action would be notification but i think this is not necessarily something for the public administration in germany it's a big system you know we have um private um people call notaries they're not really part of the public administration but they are on the other hand too but it's it's a mixed uh situation but i think since we have and peter has mentioned the european blockchain partnership and the blockchain services infrastructure since we have a use case for that i think that i mean we can we can see that also as maybe a field of action for the public service yeah yeah and i i i got a question on the registries and and why putting them on chain and or maybe a thought on that but before maybe i'll come back to that after um uh going around the table here uh so petrus i don't know if there if there are specific topics um where you see um in terms of how dlt and blockchain can can optimize trust in in in in the public sector is do you have specific views you want to share on that one or if there are specific areas [Music] gladly i mean first of all i think our approach is very much both to to build we move fast and make things ourselves as well as um we are trying to make sure that there is a conducive ecosystem for the private sector to to innovate so our actions work in these two directions when we talk about our own public services which is the purpose of the european blockchain services infrastructure uh a commentator from the the other side of the atlantic was saying in a panel that i was in that the um blockchain technologies are the perfect fit for the multi-level governance of the european union and this is exactly the way that we do see for instance the european blockchain services infrastructure decentralized not one database in brussels but on a spectrum of decentralized nodes in every member state and probably in the future nodes in regions nodes in cities so reflecting again the european uh institutions and the european project and an important import important point to make here is sometimes there's to my mind a rather simplistic criticism of utilizing blockchain and public sector applications and that oh it's government or between governments everybody trusts each other but actually i mean if you look at something like the united states on the other side of the atlantic you have a balance of powers our own mechanisms in the european union we have for instance in legislation the european commission proposing backed by the evidence of an impact assessment the legislative proposals being debated and eventually adopted if they're adopted in the parliament and the council and the whole system of eu law has preliminary rulings on eu legislation secondary legislation individuals able to um put in their uh objection to a a certain ruling by an european institution with the legitimacy being checked by courts so blockchain actually fits nicely into this as well but then my final point agreeing completely with andreas and underlining that i'm a believer in what sometimes people call the convergence stack that blockchain is part of a system of in the future utilizing artificial intelligence data from internet of things and where blockchain can be a way to organize this data and where you need it to be made permanent and how to say immutable then it is i think a very nice tool because even in a trusted environment as we all know things are verified there's regular reporting there's not usually blind trust especially between economic actors or societal actors in a wider system thanks uh thanks for that and chemo how about you do you have uh additional thoughts to add to on the topic yeah try i i think much of things that i was thinking was already covered but i tried i'll start with the concept of trust and it was also mentioned before that i think that the philosophy behind the original idea of the blockchain well it kind of like included the claim that you should not trust the governments and and so on and also there are also some ideas that that the blockchain will like enhance trust towards governments but i think it's also worth mentioning that if there already is existed very good trust like in in the nordic area there is very profound trust on government uh doing like good things for the for the citizens so so the trust layer question is not that relevant i think but the transparency angle is really interesting one and and that's really something that i think we will pursue in in coming years so so having the possibility to assure that the government processes are transparent and we can kind of like prove that that things happen in in the right way so so that's really something worth studying uh if i would point out some specific applications um [Music] i think most of them are inspired by the work done in european blockchain partnership like the european self-sovereign identity framework which i believe is really pioneering work what has been doing there and and also the notarization use case previously mentioned this is very i mean really significant work there as well and the education sector it's it's very available that that sector will will have significant uh benefits or potential of using blockchain technologies uh i i know that for example in finland there is uh they are planning to start a project that that will uh utilize fc and micro credentials like between two countries they are figuring out how to do this so that's that's really interesting one and then of course different kind of like uh proofs like vaccination proofs uh social security passport and so on are are really interesting ones and last i would like to mention this is like something i have people personally very very interested in is digital euro and and the possibilities that lie behind that especially on on on public sector services i'm not talking about the money policy at the moment but for the public sector services digital europe may offer quite interesting possibilities so there's certainly no shortage of potential use cases and and and maybe on andreas you mentioned about uh the registries and everything works fine and and um and um so you know if it's not broke don't fix it kind of a mindset um but i think that uh where blockchain can add something to this is is there a lot of um not not speaking to germany in particular different countries where you have you know government service one government service two government service three and they all have good registries and good digital processes but from a citizen perspective sometimes it's difficult to to jump from one to the next so i you know have to start one process at one and go to the next and go to the next in order to for instance buy a house i don't know maybe i have to talk to three different uh parts or get information from three different parts so i'm wondering if there's even though the systems are working great sometimes uh it's potential to gain you know provide information once or make a request once and be able to retrieve information at one time is is maybe a potential benefit that can still come to uh economies uh and public services that are quite advanced already um but uh that was just my reflection when you mentioned that uh the digital services are quite strong and i think that's uh common across europe there are a lot of other parts of the world where there's a lot of improvements still to be made but um we benefit from the digital digitalization and transformation that's happened in europe of course um and i i just thank you matthew i agree but the figures in germany you know with the history we have with two um totalitarian systems in one century the german society is very very very aware of registries that can be combined so by now there's no single identifier for every citizen in germany so it is a bit pro programmed in germany that you know this link between registries uh or not it is a heavy discussion in germany to put it this way yeah yeah okay great and i think there was one other use case uh that i was quite fond of in the land registration topic i think it was georgia who was putting all of their their land registries on on chain and um the reason that they were quite eager to do that is because it leads to a permanent and immutable record when you put it on chain so um they they they have a history as well of being um ruled by a foreign foreign country and then being able to have you know throughout time irrespective of whether um there's a foreign state that's taken over uh the the record will make bill will still be there um down the road which is one of the benefits i think that they saw to to having uh the land records on chain as well so the the the province and ownership is is forever maintained um great yeah but it's uh great and i'm going to move on in the the question but just one last thought there was i think it was ronald reagan from the u.s that said uh you know trust split verify uh as kind of the the motto and looking at what chemo said about um being having the transparency dimension but to have the transparency of course you need to be able to verify that's uh i think the trust may not be the biggest issue but to be able to have transparency you need to be able to verify some very interesting stuff um i'm gonna move on to a next question and chemo i see your your image has dropped but i i hope you're still with us and can hear us um are you there chemo perfect uh so kim i wanted to come back to you and and and looking at um um in the in the previous panel uh we had a number of uh experts on the topic of of digital identity and and sovereign identity to be more precise and so it's um something that has i think it's been mentioned by a number of panelists as well and um according to the self-sovereign identity uh you know users should be able to create and control their own identity without relying on a centralized author um can you share your view on the potential of decentralized identities and how these can improve the quality of life yeah sure uh there are a couple of views maybe maybe i start with the iris regulation because uh it is uh something that is now very uh very interesting phase so uh it is anticipated that uh and also the commission proposed that there is an uh component that kind of like includes the idea of self-sovereign identity which at that context we are talking about these new uh trust service providers that could could uh provide even identity attributes uh i think uh as we are now moving to the level that there will be a european i hope there will be a european legislation on on this but there is also like national efforts on going here in finland there is very active uh discussion between public sector and private sector on how to implement self-sovereign identity and and very we have like um at the moment multiple opinions what should be the role of government in in this context for example how to provide the uh base identity into these uh new new identity wallets is something that we are very much talking about uh i think um why it is so important if if i start to that angle as well is the idea that that we should like have this european uh way of of exchanging data which should be human-centric like like not controlled by any any central platform like the big platform provider from from outside the europe so so the human is in the center of it that's very important angle and i i have heard many times um this kind of a like metaphor of that this self-sovereign identity is like transform firming the current post office model into the new model like in the post office model you as a citizen you ask from multiple agencies please give me this and that information and then you would kind of like pass it along to the uh uh party who who needs that information but with the self-sovereign identity the post office model is no longer needed and and so so you you are actually sitting on top of that information and that really like i think enhances the and empowers the citizen and of course enhances this process overall great uh so thanks for that chemo and um and in in order to to those what do you see as some challenges uh that need to be overcome uh in order to successfully rule out such a digital innovation and transformation uh well the challenges uh um of course there are legal challenges which are i think very very difficult ones uh like the status of these new new digital identity wallet providers what kind of status will they have uh and what what is uh needed for citizen in order to kind of like confirm that he is willing to to use this kind of a new wallet for example here in finland uh we have legislation that states that you are allowed to get any uh personal information from each public sector agency but legislation does not uh say that it needs to be in electronic form so it can be printed in paper as well so and and it doesn't state anything that how how fast you should be able to give answer back to the citizen so it's not like fitting into this new uh world that that the the agency should be like it should be mandatory for agencies to provide this information to digital wallet okay um so i think the there's a lot of uh initiative i don't know petrus if you had any any thoughts on on the is within the european blockchain service infrastructure uh digital identity is is of course a very common theme and are there things being done at the level of ebsc that would support in in the member countries to alleviate some of these challenges i mean exactly one of the use cases is self-sovereign identity so it is one of the ones that we intend to deploy with the member states already by the end of this year we're also coming forward with a new regulation on eu eid extending the identification regime to the private sector and one of the aspects will be the possibility to use self-sovereign identity a little bit like in finland part of the discussion is having as the anchor a official formal id but how often do you use your passport or your formal id or how to say electronic formal state id daily most of us not so much many of the credentials are other things for perhaps reserving a tennis court or something to do with children's school activities uh et cetera where you don't necessarily we're just doing something on the internet where you don't necessarily need to be formally identified so again uh agreeing with uh our colleague from uh from one of our uh i'd say most advanced digital member states finland um it's really the um imperative is to put the citizen at the center and for these tools to work with them sometimes you do need to identify people you also do get the issues of i don't know hate crimes or something else on on the internet which is an issue that we face more and more but ordinarily you can allow people to remain not formally identified but being able to use identity themselves and to give them a european option again not forcing this on them but we see some of the issues with uh huge data data flow data breaches that have taken place exactly in the identification aspect of a couple of large platforms and it would be nice if there is a secure european alternative that citizens can use if they want to yeah yeah and maybe i'm gonna gonna ask you another question and follow on to that petroleus so there's um you know there's some um we we've heard and of course on dresses from the german perspective in finland uh as chemo is sharing insights into and uh there are also i think every member country has a lot happening at um with with public services that are with blockchain but it it kind of for for for people that are joining us from outside of europe it might sound a bit frank that we're creating kind of a fragmented system um so i'm curious to hear your thoughts um like uh is there um is is do you see this leading to more fragmentation uh as as the countries move ahead and then how does the efforts at european uh commission level combine with the the member state level uh can you share some insights for people i think many viewers in in in europe probably can fit it together and understand how it works but for others that are outside of europe how do the the efforts of the european commission with ebc and so forth um how does that fit with the individual um member state level initiatives that are taught that are that are taking place well fundamental principle of the european union is subsidiarity so that which member states can do which it is more efficient and better for the citizen to do at their level or even lower at a regional or local level should be done there where we need to do something at the european level to prevent fragmentation of the single market or for instance to battle against climate change then following the competences of the european union treaty we do that at the european union level having a european blockchain services infrastructure which all the member states are building together with us and which is free for all the member states to use is part of this this landscape then if member states wish to utilize some other blockchain application to do something locally or in the country where they think this better fits solely local conditions and they don't need to do it with partners elsewhere in the eu or where the citizens probably wouldn't need to port this to have portability of it to to other countries this is of course more than fine this is their freedom and their possibility to target um applications to the the needs that are there we do underline that fcd is being built and is already there so use it also basically for for free you have to build your own application but also for things within your own country but again this is uh the freedom of the european union we are a set of sovereign member states that are pooling sovereignty in certain areas but then have freedom to act nationally and also regionally and locally as appropriate thanks for that petrus uh we see blockchain um initiatives from from china and uh from the year from europe and and also from the u.s so it's interesting to compare approaches and and how they reflect the different um um um let's say political the way that the public services is organized but i want to come back to you andreas to look a little bit further into another role like is we've talked really you know different applications different regulations and so forth that uh are taking place throughout europe um but you know obviously another role that um i think for the for the public service and petrus mentioned about the uh investment fund for ai and blockchain but you know for in order to see innovative technologies flourish in europe and in germany it seems that you know government also has an important role to play in in creating a an ecosystem where innovation can flourish and i think in germany in particular we see in my view of what's happening is a very good example and we see a lot of blockchain startups coming out of germany a lot in berlin is a bit of a hotbed um and um and a lot more promising german companies in the blockchain space so can you share with with us a little bit uh you know the role of government has played in creating a conducive environment for such innovative innovative companies to to come up thank you excellent question um first of all i'd like to underline that i think supporting startups is a general issue not only based for you know blockchain uh startups but it's it's a general issue and um so we have funding schemes and many startups tell us that especially you know in the early stages um the the funding schemes are exhaustive so that there's you know for for good startups and good ideas i would say that we we have money for the later stages uh you know when it comes to um scaling up maybe gaining a global footprint there's a gap in in financing which especially is a gap in private venture capital compared to other regions of the world uh what we also do is you know help with uh networking so what we're doing is for instance not now with the corona virus but organizing startup nights to to matchmake um to to facilitate matchmaking we also exist and the accelerator program where we you know bring startups to let's say the bay area or boston singapore so that they can um improve their business model and their technology their where the hot spots the global outsports are what i think still is something where we can get better is procurement so trusting more in uh startups i think the united states is much better there in you know trusting uh startups and and to be honest i think this is something that we could improve i think what's also very is very important for this enabling infrastructure we have is that the importance of r d and qualification education and i mean germany and europe as whole we are net talent exporters we export our talent and um so we have many inventive people and the big question is why do they why are they being invented in germany in europe and i think it's because um up to a certain stage it's we have great cities we have great regions and you know it's just great to live here in europe and i think that's nothing to underestimate and of course our blockchain strategy i think was a very important signal to the blockchain community not only in berlin you also have great startups in cologne ubuntu for instance they're working currently on this vaccination certification issue or helix id that are connected with fc the ssi use case so it's not only berlin we have great regions as we have many great member states in europe yeah yeah thank you thank you andreas and and and petrus i'm going to come back to you because you mentioned uh in your introduction about the um and i know that there are there's a mix of viewers today a lot of uh the viewers are from from industry and enterprise and i think at least as many are from smes and aspiring uh companies that are in the blockchain space so the real builders um can you can you say a little bit more about the investment fund because i think that probably caught the year of a lot of the uh the people in the panel that i'm sure they're curious to hear more about the investment for ai and blockchain that uh the fund you mentioned at the beginning i'm very very glad to because i mean this is something andreas mentioned is as well this is an analysis that many of us share um the startup ecosystem in europe is very strong in talent actually we have per capita even more startups than even silicon valley at the early stages of financing with seed capital we also look uh quite fine for the size of our economy and for our population but it's at later growth stages where the venture capital is less um less prominent than for instance in silicon valley and in some other regions of the world and this is something that we are aiming with some public intervention which is also actually the uh the history of venture capital partially in this in the same united states um how it started uh to to strengthen it especially for some of these deep tech areas uh artificial intelligence and blockchain so it was actually in my unit we set up an artificial intelligence blockchain fund with an initial investment of 100 million euro which has since been uh leveraged to 700 million euro and is being replenished in the upcoming budget uh probably at a uh a larger amount including also implications uh implementation from the member states and the recovery and resilience facility plans where they have the opportunity to use the fund like this i think people will be hopefully happy to hear but uh and i am that it's not us civil servants bureaucrats who are making the choices we're not uh picking champions this goes out through the european investment fund and to active venture capitalists who can utilize this um with i mean a few conditions and the conditions are how to say fairly simple among them that they should be invested in ai and blockchain ai or blockchain um some combination of those three because this is an area that we want to support in the european union and so again it is in the market and these are market participants who know enterprises and know the entrepreneurial culture and who are also probably working with their invested capital with their uh mentored organizations with the enterprises the startups and we hope to also to strengthen this and if you're interested in that you can find information at the european investment fund webpage or i mean you can also contact me but again which i think is important to underline because sometimes we get which would be well funded criticism for this that it's not us a policymaker in the european commission picking it's this startup or that startup it is really a set of decisions that are made on a commercial basis by active venture capitalists experienced venture capitalists in the space yeah great all right uh thanks for that petrus and um i'm looking at we had quite an active um well well we were talking there were a lot of questions from uh from the audience so i i'd like to pick a couple of those if i can and for the first one i'm going to come back to kimo so the the comment is from if i i'm sorry i missed the name here but uh that you're that finland is quite famous for the quality of education and um talking about uh projects in blockchain but uh the the individual the participants did not catch the name um would you be able to share more information about which projects you were referring to when you talked about education with blockchain well i know that the ministry of education has been an active member of this fc diplomacy use case and they have been working with that and i also know that some uh some agencies are working also with that but i don't have like direct uh contact information but i can look if you contact me by email and one also interesting project is this micro credentials uh project that i know is about to start in tampere university of tampere is is going to run this project and i can also provide contact information to to that project if you send me email all right so please feel free to reach out to chemo and he'll provide you more details and it's just one more maybe uh topic and as we're getting close to the end i'm gonna put this one it's maybe a controversial one in a way but uh i think it's what a lot of people are wondering um and uh the comment was that um you know what what europe um is planning to achieve in two years china has deployed with deployed will deploy in the next two months um how can this be that's the the comment from one of the uh participants of the the session and um but i think it begs another question which maybe is is linked to that is how how will you know the chinese blockchain infrastructure uh interoperate with uh or work together with european or with ebc um but maybe uh petrus do you have a view on that like um do they compete is the china blockchain infrastructure compete with ebc compete with what will come in the us or how do the two fit together well i mean we're we're collaborators and we're competitors we're we're market economies at least definitely in in europe so i mean we welcome foreign players who come in of course as long as they observe uh eu law and we participate as well in international markets i mean obviously a very interesting advance is the work that the chinese colleagues are doing towards a digital one which i heard about in the imf fintech roundtable already almost two years ago when the deputy governor was announcing it there we also have a set of working groups i mean uh several of them uh with the european central bank european commission with the european central bank on the technical policy and legal issues of a digital euro so probably uh on the international market you could see a digital one and also a digital euro which we think is also part of our monetary policy and our monetary sovereignty um but obviously the chinese companies are are active in europe are active investors and employers and also globally countries that are buying blockchain products we'll look to the united states we'll look to china we'll look at the european union also also other countries japan etc um so yes it's it's it's competition it's collaboration and uh it's going to be an interesting time ahead i think um you know what you mentioned there petra said you know we often say that you know blockchain is a team sport and whether that's talking about um an organization working within its ecosystem or a country working with other countries or um or regions working with other regions i suppose the the same holds true blockchain is a team sport you compete but you cooperate so i think that's maybe a nice way to to wrap up i see daniel has joined us uh which tells me where we've taken our our time uh so with that i'd really like to thank you andreas and kimo and petras for for sharing your insights with the the panelists sorry with the audience today thank you so much for your time thanks