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Redesigning Trust: Blockchain Deployment Toolkit Supply Chain Focus April 2020 EXPERIENCE THE INTERACTIVE VERSION AT: wef.ch/blockchain-toolkit World Economic Forum 91-93 route de la Capite CH-1223 Cologny/Geneva Switzerland Tel.: +41 (0)22 869 1212 Fax: +41 (0)22 786 2744 Email: [email protected] www.weforum.org © 2020 World Economic Forum. This publication has been published by the World Economic Forum All rights reserved. No part of this as a contribution to a project, insight areas or interaction. The publication may be reproduced findings, interpretations and conclusions expressed herein area or transmitted in any form or by result of a collaborative process facilitated and endorsed by the any means, including World Economic Forum, but whose results do not necessarily photocopying and recording, or represent the views of the World Economic Forum, nor the entirety of by any information storage and its Members, Partners or other stakeholders. retrieval system. Preface The emergence of blockchain technology holds great promise for supply-chain organisations, perhaps as much as any new development in the industry’s infrastructure since it switched to standardised containers decades ago. The case for blockchain is stronger as the COVID-19 pandemic underscores the need for more resilient global supply chains, trusted data and an economic recovery enabled through trade digitization. At the same time, blockchain may engender a fair share of puzzlement and anxiety among supply-chain leaders unfamiliar with it as a new and unfamiliar digitisation tool. This toolkit is designed to help with the deployment journey, whether your organisation is seeking to gain increased efficiency, greater trust with counterparties, or other potential benefits offered by blockchain technology. Your organisation can use the toolkit to support more responsible blockchain Nadia Hewett deployments, de-risk early adoption, and ensure careful consideration of Project Lead – Blockchain and Digital unintended consequences. Currency, World Economic Forum, USA Unlocking opportunities means necessary consideration must be given to key technical and non-technical factors of success and the potential pitfalls in areas including consortium governance, interoperability, digital identity, cybersecurity, and regulatory – all included in this toolkit. The toolkit is the culmination of more than a year of World Economic Forum efforts to document tested-and-tried deployment best practices, insights and lessons from a community of 100+ organisations – and to address related issues that may arise in implementation projects. In addition to learning from their use cases, the toolkit draws from a series of seven white papers¹ that delved deeply intokey topics such as digital identity, security, and interoperability. Delivered through the Forum’s Centre for the Fourth Industrial Revolution, this work aims to shape the development and deployment of blockchain solutions and to provide a space for global cooperation to create Sheila Warren understanding and policies that accelerate these technologies’ positive Platform Head – Blockchain, Digital impact. Currency, and Data Policy, World Economic Forum, USA To accelerate the proliferation of responsible solutions and to level the playing field for partners upstream and downstream, we encourage sharing ofthe toolkit within your professional network. Sincere thanks to the generous commitment of the community who contributed their unique insights and expertise to this toolkit. Murat Sönmez Managing Director, World Economic Forum, USA Inclusivity • Integrity • Responsibility TABLE OF CONTENTS Preface 3 Table of Contents 4 Introduction 6 Executive Summary 14 Ecosystem 19 Consortium Formation 32 Consortium Governance 52 Digital Identity 73 Interoperability 97 Structure: Public/Private 110 Data Protection 121 Data Integrity 131 Personal Data Handling 151 Cybersecurity 163 Legal and Regulatory Compliance 177 Tax Implications 197 Financial Reporting and Controls 206 Risk Factors 214 Navigate Key Questions 225 Glossary 230 Contributors 236 Endnotes 240 Inclusivity • Integrity • Responsibility This toolkit combines best practices from dozens of experts across relevant domains Companies Technology and supply chain Fortune Global 500 and start-ups 80 Civic and International Organizations Academia Professional services firms Blockchain use cases Product provenance and traceability Streamlining global supply-chain 40 operations Automation and smart contracts Trade finance and many others Governments Customs and border protection Ministries of transportation 20 Ministries related to technology and digitisation Trade single window ecosystems Countries 50 Spans 6 continents Industries are increasingly With the proliferation of Blockchain offers supply forming consortia to explore the blockchain-based solutions in our chain functions a full range of transformative potential of industry, this toolkit serves as a benefits, including a reimagination blockchain technology. Drawn from resource for those becoming of the trust that is so vital to the an unparalleled community of familiar with blockchain solutions. supply chain ecosystem. But for business and technology experts, Developed by a community of supply chain leaders to derive the this toolkit will guide business industry and technology experts, benefits that blockchain executives and deployment teams the toolkit offers a wealth of technologies offer, they have to through essential processes and expertise and a practical guide for navigate a thorny set of issues and resources to make informed, supply chain leaders. trade-offs. This toolkit is a practical, and timely decisions for a comprehensive array of principles Gene Seroka, successful blockchain solution. Executive Director, Port of Los Angeles and best practices to guide supply chain practitioners through a broad Nabil Alnuaim, Chief Digital Officer, Saudi Aramco set of considerations to shape strategies, enhance processes, and deploy truly transformative solutions throughout the global supply chain ecosystem. Linda Pawczuk, Global Consulting Blockchain and Digital Assets Leader, Deloitte Inclusivity • Integrity • Responsibility Introduction Welcome to the Redesigning Trust toolkit, designed to guide you and your Supplementary reading - organisation through the development and deployment of a new blockchain This toolkit builds upon previous solution. Before you get started, a few things you should know: publications released by the World Economic Forum. The following Who is the toolkit for? While anyone can use the toolkit, the content assumes whitepapers were published as a series on that your team or organisation has identified a good blockchain use case via Inclusive Deployment of Blockchain for an honest evaluation of the technology as compared to other options. While Supply Chains:² useful for blockchain deployments generally, this toolkit focuses on supply- • Part 1 – Introduction³ chain deployments. • Part 2 – Trustworthy Verification of Digital Identities⁴ What’s in the toolkit? There are 14 modules in this toolkit with specific tools • Part 3 – Public or Private and resources throughout to help make the included information more readily Blockchains – Which One Is Right for useful to your project. It draws upon lessons from more than 40+ global supply You?⁵ ¹⁰ • Part 4 – Protecting Your Data⁶ chain use cases. • Part 5 – A Framework for Blockchain Cybersecurity⁷ • Case studies and learnings from the Data Protection Ecosystem United Arab Emirates⁸ • Part 6 – A Framework for Blockchain Interoperability⁹ Structure: Consortium Formation Public / Private Consortium Governance Cybersecurity C on ne c t Digital Identity e t a e r C C o Financial Reporting and 14 m Modules p l y Controls Data Integrity Tax Implications Risk Factors Legal & Regulatory Compliance Interoperability Personal Data Handling Figure 1.1 – All 14 modules available in this toolkit What’s not in the toolkit? This toolkit does not include resources for Interactive version determining whether blockchain technology is the right fit for your use case or An interactive version of this toolkit is for evaluating your organisation’s digital maturity. More information about the available online and it offers a digital scope of the document can be found in the Assumptions section. spreadsheet consolidating the main tools and key questions of the toolkit for you to How should the toolkit be used? The content is modular, not linear. The aim download and tailor. is that you will use the toolkit as a handy reference for your project, reviewing different modules as needed, whenever needed, depending on your particular project’s needs. More details are included in the Using the toolkit section at the end of the Introduction module. Inclusivity • Integrity • Responsibility INTRODUCTION 6 The foundations: How to think about blockchain deployments Before you dive into the modules, there is some important context to keep in mind. Remember that blockchain is simply one tool in an organisation’s digitisation journey. As such, here are a few foundational themes: The enterprise environment: meeting enterprise rigor and requirements While the technology is still nascent, blockchain requires the same features and rigor that one would find in almost any government or corporate technology implementation. Figure 1.2 shows nine essential considerations that organisations typically need to address to ensure the success of any new enterprise solution. The items on this list are grounded in IT
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