Past event

Polish government sets out plans for blockchain to BPCC members

Dr Maciej Kawecki, director of the data-management department of the Ministry of Digital Affairs, was the keynote speaker at a meeting of the BPCC’s Technology, Media and Telecoms policy group on 3 April 2019, which focused on blockchain (distributed ledger technology, or DLT).

He set out the Polish government’s current agenda on innovation, based on three areas: artificial intelligence, blockchain and the internet of things, and announced work on a project that will go live this autumn, Inteligentna Kancelaria Ogólna (Intelligent General Office). This project, aimed at streamlining the public administration, uses machine learning to scan inbound letters and emails from citizens to offer faster response times and greater accuracy in official responses. Dr Kawecki mentioned interesting IoT projects, such intelligent bins for household rubbish that send signals to municipal waste collection departments when they are full, or urban maps showing free parking spaces in real time, chatbots to offer advice to disabled people.

Piotr Rutkowski, the Ministry’s DLT/blockchain advisor, set out its approach to the subject. He pointed out that aspects of blockchain’s first and best-know applications – cryptocurrency – was the remit of the Ministry of Finance, National Bank of Poland, and financial regulator KNF, which were also concerned with anti-money laundering.

The Ministry of Digital Affairs is looking at DLT applications in four specific areas – finance and insurance (in particular the use of smart contracts); real estate (land and mortgage registers – księgi wieczyste), healthcare and energy (smart grids/smart meters). Other blockchain projects include the dematerialization of bills of exchange (dematerializacja weksli) and registration of a simplified form of the joint stock company (uproszczona Spółka Akcyjna or prosta S.A.). The Ministry runs sectoral policy groups on blockchain applications to discuss it with business stakeholders as well.

A spirited discussion followed regarding the public procurement of blockchain technologies, given the inefficiencies of the current public tendering system. There was consensus that without technical dialogue preceding the tender, it makes little sense for private-sector IT vendors to submit bids.

A further obstacle identified by the BPCC policy group members was the unreadiness of Polish universities to teach DLT (with two exceptions noted – Warsaw University of Technology and Warsaw School of Economics SGW); in most universities, IT students know more about how blockchain works than do their professors.

Fears that DLT uses huge amounts of energy are unfounded, said Mr Rutkowski, who said that early blockchain ‘mines’ (vast server farms used to crunch encrypted data) were indeed inefficient, but that as the technology spreads, so it will become more energy efficient.

The role of blockchain in trade finance was mentioned by three representatives of banks, where two already use DLT to trace and verify shipments of goods, and the conditions required to release payment to the vendor. Payment can be speeded up from three weeks to 24 hours, with the potential to cut the cost of trade finance by 60% or more.

High cost of entry to DLT makes it a technology that will give larger players with global reach an advantage over small, local firms.

The BPCC announced a willingness to support work in the insurance and real estate, and further meetings about the implementation of blockchain in these sectors.