Blockchain could be 'transformational' for small businesses, says Minister
Significant potential for distributed ledgers in ensuring prompter payments, says Margot James, Minister of State at the DCMS
Late payments are one of the biggest issues facing small businesses, and it's an area where distributed ledger technologies (DLT) could provide substantial assistance, according to Margot James, Minister of State for the Department for Digital, Culture, Media and Sport (DCMS).
Speaking at the Blockchain Live event in London yesterday, James said that decentralised trustless systems for recording transactions could be beneficial in many areas, including transport, smart cities, finance, tourism, agriculture and health, but as former Minister for Small Business in the Department for Industrial Strategy and head of a small business prior to that, this was a focus of her presentation.
"There are huge problems here that blockchain could help us resolve through the supply chain management opportunity," James said.
"Blockchain could be transformational in the campaign for prompter payments, and I hope the government can partner with industry to look at some ways of demonstrating blockchain's potential in this area."
Blockchain developments are at an early stage in their evolution, but James said that proof-of-concept trials are underway in a number of government departments including HMRC, DEFRA, DWP and DFID.
In addition, some regulators including the Financial Conduct Authority (FCA) are offering a live sandboxed environment for testing new technologies, of which blockchain has proved the most popular, James said.
Fraud reduction is another potential use case, with the potential to reduce the estimated £30bn lost annually in fraud through a combination of transparent record keeping and secure identities. James admitted that previous efforts in the area of online identity had largely failed, with just three million people signing up for Gov.UK Verify two years after its (much delayed) launch. She put this down to the system being too difficult to use.
Another project she mentioned was Archangel, a joint venture between the National Archives and the University of Surrey aimed at finding a sustainable way of securing and ensuring the integrity and availability of digital archives.
The government is supporting such efforts through Innovate UK and other bodies, she went on, with the aim of kick-starting adoption of DLT technologies.
So far the funding is piecemeal, with the DCMS having a coordinating role across the departments but James, who started in her role in January, said she hoped the government would organise something along the lines of it's Digital Strategy for 5G.
"Testbed pilot programmes will help the UK become a leader in 5G and I want the same for blockchain," James declared.
However, there remain a number of hurdles to be overcome, not least the regulation of data stored across internationally dispersed nodes, and the specific nature of smart contracts compared with the interpreted approach of the law.
"Decentralised technologies are hard to regulate," James said. "Who is liable for data shared across thousands of different computers in a decentralised system?"
The Law Commission is currently looking into how to legislate for smart contracts and would welcome contributions from the industry, she added.
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