Thank you, Mr. Chair.
I'm the CEO of Mavennet Systems Inc. We're a company that develops digital products in different industries—media, financial services—and also in the supply chain. I know some or most witnesses in previous sessions have talked about the applications of blockchain to financial services.
Today I'd like to talk about the applications of blockchain specifically to energy and resources. As we all know, this is a critical industry for Canada.
For about three years now, we've been working together in the oil and gas industry with the U.S. Department of Homeland Security and about 10 to 12 different organizations in the industry from Canada and the U.S. to support a customs clearance between the U.S. and Canada that would make it frictionless to help both the industry and the government. I can get into details through the questions later on.
When it comes to the steel industry, we just finished a pilot together with the Canadian government, ArcelorMittal Dofasco and Tenaris for the traceability of steel, meaning the proof of origin and proof of environmental footprint.
What is the problem with industries that rely on the supply chain today? The big problem is that we're still largely paper-based. Even though organizations here in Canada and abroad have spent millions of dollars digitalizing their companies, the moment I'm exchanging information with the next organization down the supply chain, I send an email or I send a PDF—or if I'm lucky I'm going to send an Excel file—so all that digitalization simply goes out of the window.
The reason is that we're trading products that live in a supply chain that spans different organizational boundaries. Essentially, we don't have a standard way today for these organizations to speak the same digital language with each other. That's why we revert to the minimum common denominator, which is paper or near-paper formats like PDFs or emails.
What can we do about it, and how can blockchain help in this situation? In 2015 a group called IIW, the Internet Identity Workshop, started looking at how to use blockchain for the purposes of identity. They planted the seed for what is now a W3C standard called verifiable credentials and decentralized IDs, which essentially allow us to create cryptographically verifiable assertions about individuals, organizations and products. An assertion can be, for example, in my ID, what my age is. In this case, it would be an assertion by the government that issued that document. This is applied today for products in the supply chain in a way that I'm able to have real-time information about specific products that go through a supply chain, in a way that this information is interoperable, and that's the key word: “interoperability”. That's interoperability between organizations, interoperability between technology providers and interoperability between data standards used at each of these separate organizations.
This is essentially a basis that can allow us to create what is called Industry 4.0. You might have heard about this work. Essentially, it allow us to create supply chains that can adapt to supply chain shocks in real time. It means the ability to automate contract settlement and payments, the ability to enable automatic trade finance, the ability to identify the origin of products in their composition, being able to prove the environmental footprint of a product to enable buyers' conscious decisions on what products they're buying.
This is where I think Canada can really benefit by having an ability to differentiate greener gas, or steel of Canadian origin that has incurred a smaller footprint in the environment when it comes to CO2, and we're not alone on this path. There are many organizations and governments that are using the same types of technologies today.
We have the EBSI, the European Blockchain Services Infrastructure by the EU, which essentially has created a single sort of truth for transactions for public services across the member countries, also based on verifiable credentials.
Also in Europe, the European Commission is building the digital product passport, initially for batteries, to support the circular economy. It is also looking to expand this to textiles and other products. China is building its own blockchain for the traceability of steel, though we don't know a lot about what it's actually building.
We also have, as I mentioned, the U.S. CBP and the Department of Homeland Security. They are using verifiable credentials for traceability of steel, agriculture, e-commerce and oil and gas, which is our part of the job, as part of their 21st-century framework transformation. It's the biggest transformation in customs since 1993.
Also, USCIS and TSA are looking at verifiable credentials specifically now for people's identities, passports, driver's licences and so on.
Our economy has a bigger component of energy and resources and is strategically positioned to benefit from these technologies. Will we lead the charge and work with our allies to support standardization and the adoption of these technologies in government and industry, or will we take a back seat and wait for others to impose these technologies on us when no other option remains?
Thank you.