finance

Introduction India’s digital ecosystem is changing rapidly with new technologies like blockchain, artificial intelligence and digital public infrastructure. At the same time India has taken a big step to protect people’s privacy with the Digital Personal Data Protection Act, 2023. Both of these developments are trying to make digital systems more trustworthy.  The Digital Personal Data Protection Act is a deal for India’s data protection because it gives people more control over their personal data. On the other hand, Blockchain technology is gaining trust because it is transparent and secure. Governments around the world including India are looking into using blockchain to make things more transparent and reduce fraud. However, their interaction raises some complicated questions about the law and technology. The Problems One major problem is figuring out who is responsible. Usually in digital systems, a single organization is in charge of the database and can be held responsible for protecting the data.. Blockchain networks are dispersed, which means they involve many different people, like node operators, developers and validators which makes it difficult to decide who should be in charge of protecting the data under the Digital Personal Data Protection Act. Another issue is that blockchain is designed to prevent changes to the data but the Digital Personal Data Protection Act states that people have the right to correct or delete their data. If personal data is stored directly on the blockchain it could be hard to comply with requests to erase the data without undermining the main purpose of blockchain. Getting permission from people to use their data is also complicated with blockchain. The Digital Personal Data Protection Act requires obtaining people’s consent before using their personal data. Blockchain systems usually use pseudonymous wallet addresses instead of real names. While this helps keep people anonymous it can make it hard to link consent to the person or to let them withdraw their consent later. The imbalance between blockchain and the Digital Personal Data Protection Act shows that there is a gap in India’s data protection laws. The law presumes that one organization is in charge of the data, but blockchain is decentralized. Without rules about  joint responsibility, liability and how to treat immutable ledgers, platforms may be unsure about how to use blockchain with personal data. Recommended Solutions Despite these challenges there are some possible ways that can make the coexistence of blockchain with the Digital Personal Data Protection Act successful. One idea is to use a system, where personal data is stored in a secure database and the blockchain only stores references to the data. For example Estonia’s e-governance system uses blockchain to secure government records while securely storing personal data in separate databases. Another option is to use permissioned blockchains, where authorized people can operate nodes. This helps attain clarity on accountability and improves oversight. Some government-backed blockchain projects in India are already using this approach. Conclusion Both the Digital Personal Data Protection Act and blockchain technology are important for India’s future. While they create some challenges, careful planning and design can help resolve these issues. By addressing the gaps in the law and encouraging technologies that prioritize privacy, India can create systems that support innovation while protecting people’s data rights. The Digital Personal Data Protection Act and blockchain technology can work together to make India’s digital ecosystem stronger and more secure.