Interview With Daniel Marco on the State of Blockchain in Catalonia

Several years ago, a blockchain strategy for Catalonia was revealed to the world, presenting a comprehensive outline of how a government — albeit a local one — can in time switch to being an e-government. Such a model would be backed by various blockchain systems that would accommodate the needs of the citizens for digital identities and voting, and could even be used to follow budgetary spending and recycling.

It is a brave and ambitious plan — though, not one that many have heard about, likely due to the lack of information. The first rumors around blockchain implementation in Catalonia appeared a few years ago and were later confirmed by an official statement. 

Just a year after the announcement, the official documents are now available online for all to see. But apart from a governmental report and several news articles, Catalonia’s blockchain initiative has not received much spotlight.

Cointelegraph spoke to Daniel Marco, the director general of innovation and the digital economy in the government of Catalonia, to find out how far along the region is on its path toward blockchain-enabled digitalization.

Cointelegraph: One of the biggest topics in the SmartCat strategy is focusing on urban development and services that people can actually use in their day-to-day lives. How much of that has already been implemented? 

Daniel Marco: Well, we are learning how blockchain can be applied. We are testing the technology and the governance of this technology. That means that to provide these kinds of large-scale projects, we need to have confidence. Smart Catalonia helped us because it's a connection between the digital strategy of the government and the local authorities who have the most innovative public administrations — not only the cities but also the counties. 

Another project we are doing right now is in the agricultural area, about the traceability of products. We have a company — a very small one, from Girona — that takes eggs and can track them through the supply chain. This is a way to start showing these kinds of use cases. 

We are also certifying knowledge with diplomas through the blockchain. Also, for example, in universities, there are bins for plastic bottles. When you throw a bottle into one of these bins, you can earn a token and then you can make donations with these tokens. 

CT: A big part of that strategy is the digital identity plan called IdentiCat. The idea sounds intriguing but then, when considering switching everything to that system over — like education, health care, pensions, etc. — the task becomes immense. What would you say are the main challenges?

DM: For us, digital identity is a key project of our blockchain strategy, but it's also a pillar for the overall digital approach because it will not only be helpful for just blockchain and other ledger projects. 

Why does the government — or a big corporation or a bank — need to manage your identity if you can do it by yourself? Technology can help with that. And if we arrive at that place, which is our goal and we are very committed to doing that, we will be the first public administration to promote digital identity without the control of the government. At the end, what we want is to validate identity and this will be our role — the validation that you are you. 

CT: So, in your view, such systems should be decentralized, and the government should create the system and then step aside?

DM: We are trying to develop an open-source system and give it to the community. Then, we would be a part of the governance, validating identity, which is the principal attribute of this technology.

And also, we would make sure that all the governance is fully legal and provides confidence, because the government also needs to define things and to put in all these processes and the legal framework.

CT: So, this blockchain system, would it be developed and powered by local companies, or will it be outsourced or maybe a combination of local and foreign firms?

DM: This blockchain strategy is a part of a national digital strategy. And we have two sides to it. One way is identifying technologies that can change our society. We’ve identified that 5G, blockchain and artificial intelligence are the main pillars. 

And that means that we are working on adoption and accelerating the adoption of these strategies to have a positive impact on our citizens. But at the same time, for us, it's a priority to have a local ecosystem to build this new economy. 

This kind of technology will be deployed everywhere and will work to transform our society and to advance as a digital nation. We need to have this talent. 

It's also relevant to attract investments from big firms. It's not only about having locals — we want international ecosystems. It’s not like the government only wants to work with local firms because they are here — we want that because it generates economic growth. 

Now, it's the really early stage because we have 76 companies identified as consultancies, developers or companies that are using blockchain in their core business. They are either in the finance or in the cultural sector — and I think that we are talking about around 500 employees. So, we are in the phase of developing proof of concepts, and in this, we are closer to research centers and small companies.

CT: But most small companies will likely need some help from the government. Is there some kind of backing from the government to develop the private sector?

DM: We are helping because we have established a national strategy with different departments. In the digital policy department, what we are doing is generating the right environment, meaning to connect all the different sides with the demand. I think that at the start, one of the best things that this ecosystem needs is to have projects and the right products.

For example, one month ago, we worked with a waste management agency where they had a challenge about how to engage the citizens to do selective recycling. And blockchain can help that. 

And then, we put the challenge to the community — and at the end, we had some different projects that will help accelerate that, because first we set a challenge, and then we help the smaller companies with development. 

The second one is the talent — we are helping companies to get more talent. But most of the developers that we have have learned on their own. Right now, we have two universities that are doing master's degrees in blockchain. One is more technological and is for developers, and  the other is more about the business model definition. 

CT: So, would you say that people in Catalonia are aware of the technology and they're ready to engage with it?

DM: Yes, and this is changing year-by-year because blockchain two years ago — when you were talking to any director, any head of department — only those people and some technical people know about it.

And then, we did a lot of work on building awareness. For us, it’s quite relevant that all the technology companies that we have in Catalonia have this blockchain approach. This allows for better awareness among businesspeople in Catalonia, but there is a lot of work to do. 

However, from the side of the citizens, civic movements are using blockchain technologies to develop their activities, and the mass media was reporting on the app Tsunami, which they are using.

We want to change the environment, and it is quite difficult to get there. But with tokenization models, we can take action and provide people with reactions or ramifications. We want to do all these things to pass all these theories on to our governance.

Adding an extra twist to the Catalan blockchain issue is a proposed law that seeks to grant the government the rights to turn on the internet-censorship guillotine. If imposed, the Spanish government would be able to cut off access to any website, much like it is now in Russia with Telegram, China with anything Google-related, and a whole host of other places. And according to the country's leader, Pedro Sanchez, this measure will prevent the Catalans from forming a digital, online independent republic. 

CT: Regarding the internet-censorship law, will Catalonia still push on to develop the technology?

DM: Right now, we have the biggest challenge, which is that we have a decree from the Spanish government that disallows any public institution to promote or develop this kind of technology. And right now, this is a bigger hurdle for us because it's also limiting the possibility of the private sector to develop this technology. It’s not only for public institutions and not only for Catalonia — it's for the whole state. 

We will fight against this because the position is not related to the technology of the Spanish government, but it's related only to the specific situation here in Catalonia. And this needs to be solved in another way. So, the technology, the innovation is not really the problem because the technology will arrive. If they stop or not, you cannot close the doors to the field. 

And also, we need the help of their blockchain communities because not having it stops innovation. This will stop investments in Catalonia as well as economic growth and the creation of new jobs. What you need if you are a startup or entrepreneur is a framework that helps you achieve objectives — otherwise, there are a lot of places to develop.

Marco admitted that the law makes it hard to continue the development of the digital identity system and the process therefore had to be stopped briefly before the situation becomes more clear. On a more optimistic note, however, Marco did admit that the Catalonian way of having Cat in the name of every project does not make it appealing to people outside of the region.

DM: But the biggest problem with digital identity, or IdentiCat, is that we are not very good with Catalan names. We always put “Cat” at the end. [Laughs] 

CT: But it creates an image and a certain style.

DM: But people abroad do not understand because “Cat” is local. We started with SmartCat and right now, our international name is Smart Catalonia. Because otherwise it seems like it is a cat that is smart. [Laughs] 

CT: Theoretically, blockchain is partially the solution to the problem, but yet you don't have enough time to develop that solution. The Internet of Things, 5G and blockchain combined together can provide all the necessary tools to form a digital government.

DM: This is because when you talk about all these free technologies, it's really kind of a radical new way of connection, which are intelligence networks that can connect anything, with any person, with anything — these identities that can talk to each other. And then you add distributed artificial intelligence and we will arrive at autonomous cars or industrial machines that will really be more secure and more connected.

And we are developing these three on more or less the same level. This is also a long-term vision. We are changing some status quos and we are changing the relationship between the people and the government — the business models. But it will not arrive in two or three years.

CT: Are you considering using blockchain-backed systems to facilitate voting and e-voting?

DM: Regarding e-voting and blockchain e-voting — because they're two separate things — the technology is there. We have, here in Catalonia, one of the most important e-voting companies in the world: Scytl.

It is starting to develop blockchain solutions, but the main projects that they are doing are not with blockchain. Also, we have other smaller companies that are doing blockchain voting. And we did it in SmartLab of Smart Catalonia. We had a blockchain-based vote in a village that has a road that was always busy. And then we, as the government, changed the route for the trucks to go to the highway.

We have two challenges for the Catalan government. The first is more about trust. I am sure that the thrust of the people that voted no or yes, depending on the results, may not agree with it because they are not used to the process. 

The people and the unions have voted with electronic ballots, and also the Chamber of Commerce has held such an election for the first time — and I do not know the numbers, but the increase of participation was very high. 

Also at the moment, the football club Barcelona is looking into having its voting through e-voting. At the end, if people vote in football and the Chamber of Commerce, and if it's okay, then why not scale up?

But the second challenge is the electoral law. We don't have a Catalan law — it’s a Spanish law. And to incorporate electronic voting, we need to change this law. And to change the electoral law, there will be problems with that. 

This interview has been edited and condensed.