We believe that the features of private blockchains can be leveraged in fields such as government and social infrastructure. Let's look at how private blockchains are being applied to business and other fields through three examples of digital transformation (DX) currently being carried out using BC+.
① Local government DX: Using BC+ in the digitalization of contract administration
The local government DX promotion plan being advanced by the Ministry of Internal Affairs and Communications advocates using digital technologies to improve the efficiency of operations. Until now, contract administration has been a field where efficiency improvements are difficult to achieve, because contracts are concluded by applying seals to physical contracts. The Enforcement Regulations of the Local Autonomy Act were revised in January 2021, making it possible to conclude electronic contracts with electronic signatures in accordance with the Electronic Signature Act. A great deal of progress has since been made in the digitalization of contract procedures. We have proposed an electronic contract service that utilizes BC+, and are currently working with local governments to perform verification testing of contract administration for procurement operations (covering all operations from operator registration to bidding, contract conclusion, contract execution, and delivery).
This electronic contract service creates the hash value of contract documents (electronic files) between parties, and stores the electronically signed hash value in the blockchain. This makes it possible to detect if the contents of the contract are changed after the contract is concluded. Contracts themselves continue to be managed using a contract management DB, while the blockchain technology records the factual matters of contracts, such as who the contracting parties are and when they concluded the contract, and ensures that the contents are not tampered with. Unlike the PDF signatures adopted by many electronic contract systems (a mechanism in which the hash value of the document part of the contract created in PDF is electronically signed and added to the second half of the PDF), various signatures attached to the contract documents other than PDF, such as notifications, drawings, and books, can also be tied to the contracts and managed in blockchain, making it possible to eliminate the use of seals and realize paperless documentation. This blockchain-based electronic contract service has been checked against the Ministry of Economy, Trade and Industry's The System to Eliminate Regulatory Gray Zones* and confirmed to meet the requirements for electronic signatures stipulated in the Electronic Signature Act.
* The System to Eliminate Regulatory Gray Zones: A system that allows businesses to confirm in advance whether regulations will be applied to their specific business plans. Even if the scope of application of the current regulation is unclear, business operators can engage in new business activities with peace of mind.
This test verifies that BC+-based electronic contract services can be deployed and linked with other existing procurement operation systems, such as whether existing electronic bidding qualification registration information can be used for the individual identification necessary for electronic contracts. By deploying electronic contract services, blockchain infrastructures for local governments can be developed. This will greatly contribute towards the promotion of local government DX in the future.
For example, application submissions which require identity confirmation could be digitalized and greater transparency could be achieved with respect to the execution of contracts between the private sector and local governments. This could improve the efficiency of the work carried out to respond to information disclosure requests. Smart contracts enable automated processing of business triggered by the conclusion of contracts within local governments, and with private companies. Making BC+ part of the system's foundation is expected to accelerate the digitalization and smartening of society as a whole, including members of the community, companies, and nearby local governments (Fig. 1).