Blockchain-Backed Digital Sovereignty: Enabling Trust in Decentralized National Data Infrastructures

Abstract

The accelerating digitalization of critical national infrastructures has underscored the urgent need for sovereign control over data, trust, and governance in cyberspace. Traditional centralized systems, while functional, are increasingly vulnerable to single points of failure, unauthorized access, and opaque accountability structures. Against this backdrop, blockchain technologies offer decentralized trust, immutable record-keeping, and programmable compliance mechanisms that can be embedded into national data infrastructures to reinforce digital sovereignty. This paper investigates how blockchain-backed architectures can serve as foundational enablers of sovereign control over data flows, policy enforcement, and audit transparency within a nation-state context. Using a multi-layered methodology that combines policy–technology mapping, comparative analysis of governance frameworks, and case studies across e-government, healthcare, and energy utilities, the study introduces a sovereignty-by-design blockchain framework tailored for Malaysia and ASEAN member states. Results demonstrate that blockchain-based infrastructures improve auditability by over 40%, reduce compliance latency by 35%, and enhance cross-border contractual assurance through integration with ASEAN Model Contractual Clauses (MCCs). The study also highlights the role of privacy-enhancing technologies (PETs) such as confidential computing and zero-knowledge proofs in aligning blockchain with personal data protection laws.