Australia now has a roadmap for the blockchain sector - but is it bold enough to help realise the full potential of blockchain in Australia? We unpack Australia's national blockchain roadmap to find out.
The Department of Industry, Science, Energy and Resources released its National Blockchain Roadmap this month, which plans to capitalise on economic opportunities presented by blockchain technologies.
The general response from the blockchain community has been positive in the delivery of an Australian roadmap that highlights some applicable use cases and sector opportunities. However, there’s some disappointment that it’s light-touch in detail; and lacks funding and incentives for the sector.
In this article, we discuss the highlights and roadmap gaps and share key points where future efforts would make the 2.0 version roadmap better.
Blockchain is understood in some areas of government, but a broader reach into finance is still required.
The National Blockchain Roadmap is a great starting point for Australia. It demonstrates awareness within the government of blockchain-related issues, as well as the opportunity this technology enables in certain markets.
The rhetoric around blockchain has often revolved around the technology. This roadmap seeks to go beyond the tech; looking at case studies and delving into some sector use cases in the Australian context.
The back half of the roadmap specifies three use cases for agricultural supply chains, verifiable credentials, and “Know Your Customer” (KYC) processes. While these use cases help communicate the problem and potential solution, finance use cases were not included. It would have been good to see a more complete range of use cases and sectors highlighted.
Many of the use cases presented, are already being worked on, locally or internationally (or both). Blockchain products for verifiable credentials, identity management, and supply chain solutions are live now. Any action to drive Australian solution development in these areas will need to happen quickly, otherwise, participants could just join existing blockchains (public, consortium or private), that offer these solutions rather than investing and building in new ones.
Typically, solutions have better success when they are market-driven. The approach of the government picking the use cases, and driving working groups for them could be perceived as the government ‘picking winners.’ Additionally, the application of blockchain as a solution to these identified problems comes without any reference to the principled decision-making framework that considers the suitability of the technology as a solution in the first place.
The selection of use cases also highlights the narrow focus on private, permissioned blockchains. The roadmap failed to mention the important role that open, permissionless blockchains provide in the market. In particular, Bitcoin, which is the largest, most valuable, and most used blockchain the world has.
Regardless of how blockchain is framed, Bitcoin is the mother of all blockchains. Its value as an open blockchain for all should be neither understated, nor ignored. Its network provides the strongest assurances for the transfer of value across the internet, and anyone can participate. As an open network protocol, it is likely to be core to a future where many blockchains will interoperate with each other, creating many opportunities for business and users of all networks.
The internet was built on open protocols which enabled its global development, adoption, and growth. Public blockchain networks follow these same principles, and by failing to include them in the national roadmap, it has neglected how they will fit into Australia’s future view of blockchain.
This could leave Australia behind globally.
Blockchains are changing how our financial systems work. Given finance is the largest sector using blockchain, it’s disappointing to see no coverage in the roadmap of this sector. There was no talk of digital currencies, cryptoassets and tokenisation - which arguably are the largest blockchain use case right now. This was also particularly important given the era of CBDCs (central bank digital currencies) is approaching; where central banks will issue digital currency on a permissioned blockchain with commercial banks as network validators.
“We have the roadmap, but it presents a narrow view.”
There’s a real opportunity for the government to drive literacy and skills, but the detail on the action to get there is incomplete.
One of the highlights of the roadmap is that there is a recognised need to develop nationwide blockchain literacy and skills. It is positive that universities and organisations such as the CSIRO are investing in blockchain R&D. Education is a key driver for new technology adoption. For Australia to support this roadmap, there needs to be a commitment to build the skill base for it – and there is a real opportunity for the government here.
Missing this opportunity risks losing talent abroad and, losing our competitive edge on the global stage.
For the government, their role in energising universities to feature blockchain components on their curriculums is critical. Currently, STEM themes are part of the broader uplift of STEM initiatives across the country - blockchain must become part of that uplift.
However, it is also up to businesses – who require the knowledge and talent - to engage in this uplift too. There needs to be both a top-down and a bottom-up approach in igniting the right blockchain literacy, skills, and education. This requires a concerted effort between industry, research associations and government.
The roadmap, unfortunately, lacks the detail of future collaborative efforts between industry and government - latching onto existing structures, such as working with Austrade for startups.
The positive is that a government steering committee is being set up to help drive the roadmap and there is an intent to be collaborative. Whilst the roadmap doesn’t specify who will make up the steering committee, it’s expected to include critical industry representatives and research associations such as the CSIRO, universities, and Blockchain Australia.
The issue here is that part of this drive involves funding. While there’s a lot of opportunities to be had; apart from pre-existing commitments to Standards Australia, the roadmap doesn’t identify any new funding.
Regulation is here, but Australia could be doing more.
Last year, BDO participated in workshops in Canberra that informed the roadmap development. At this time, improved regulatory frameworks for the industry was one of the priority issues raised. Whilst largely related to finance use cases, we are surprised that there wasn’t more detail addressed in the roadmap. Any talk of regulation was past tense about what had been done – there were no forward-looking statements or funding commitments for initiatives by Treasury, ASIC, ATO or AUSTRAC.
From Singapore to Switzerland, many Asian and European jurisdictions are ahead of the regulatory curve updating policy to consider blockchain uses, such as publishing token classification frameworks. These approaches reduce regulatory uncertainty and make it easier for blockchain businesses to startups. Through these actions, these countries deliberately aim to attract investment, talent and new companies within a very competitive global market.
The potential for the emergence and growth of new blockchain-driven businesses in Australia is significant. For Australia to remain competitive, we must have supportive strategies that provide the right incentives for entrepreneurs and businesses to innovate in this space. Regulations should be clear and sensible whilst maintaining protections for consumers and investors alike.
The development of this roadmap was a participatory process between the government and industry. It is positive to see intent for this to continue through a formalised steering committee and establishment of working groups.
We hope as this work continues a bigger vision for this industry can emerge that incorporates all sectors, the role of public blockchains, increased funding and our current regulatory positioning.
“The opportunity to foster such a transformative innovative technology is in front of us, and one we cannot afford to miss.”
BDO welcomes the National Blockchain Roadmap and is excited to be part of this emerging era of blockchain in Australia. If you would like more information talk to an adviser.