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Blockchain requires regulators to be open to change. (NSTP Archive)

PRIME Minister Tun Dr Mahathir Mohamad has always been a believer in technology and innovation.

During his first tenure as prime minister, he was behind initiatives to drive and equip the nation with a strong technology culture. Prominent among them was the Multimedia Super Corridor, established to nurture entre-preneurs and talent in information and communications technology (ICT).

Cyberjaya was planned to be the hub to breed this community and inspire young talent to join the global rush to use technology in nation building.

Unfortunately, that thinking was not well understood by his successors.

Cyberjaya has instead become a real estate play.

Few would deny that ICT and the Internet have been a disruptive force in global businesses.

The e-hailing business is one that has created problems for traditional taxi operators.

Dr Mahathir has been at the receiving end of criticisms by taxi operators disgruntled by the new business model.

But the reality is that there is no turning back. Customers prefer the new concept of hiring a taxi. It’s more convenient and less troublesome.

E-hailing is not the only business disruptive technology. Experts say that there are many more appearing on the horizon.

One which has grabbed attention is blockchain technology.

I attended a workshop on blockchain technology in Singapore recently.

Jointly organised by Singapore’s A Star and Germany’s Research Ministry, the workshop attracted close to 200 participants. It was held at the A Star site, a technology hub, the kind that Cyberjaya aspired to be.

Speakers from Germany came from the Fraunhofer R&D Network. Many Fraunhofer institutes have made inroads in blockchain.

To many, blockchain is associated with cryptocurrencies such as Bitcoin. But it is more than that.

According to Professor Wolfgang Prinz of the Fraunhofer Institute of Technology near Bonn, blockchain will find uses in energy, logistics, commodities, healthcare and manufacturing.

New blockchain platforms of Smart Contracts, for example, promise better reliability, safety and may even do away with the need for arbitration.

A recent blockchain conference in Kuala Lumpur, organised by the CONFEXHUB group, was also patronised by businesses.

Speakers spoke about how blockchain can benefit businesses.

Since blockchain is similar to an accounting ledger, where entries are unchangeable, it would prove useful in tracing business decisions and actions.

Nowadays, with increasing cases of cheating, mismanagement and abuse of business practices, blockchain can be a mitigating tool.

Expert say blockchain would deter the underdeclaring of carbon emissions in cars.

Even the palm oil industry which has been under pressure to adopt sustainability practices, can use blockchain to show proof that it abides by international standards.

When it comes to blockchain, the financial services sector has made much headway.

A survey, released by accounting firm PwC, found that among industries, including healthcare and energy, financial services stood out as the one with the most blockchain-based initiatives.

In financial services, banking has taken the lead in exploring blockchain.

But no new innovation can be developed in isolation.

It requires collaboration among key participants. New innovations come with new risks.

Blockchain, being a fundamentally transformational technology, requires regulators to be open to change.

It is a fact that many of the barriers to adoption lie outside of blockchain, but focus on regulation, security and resistance to change.

For blockchain to reach its potential, it needs to be brought within the public policy and legal framework of a country.

This is where a national masterplan to implement blockchain will come in useful.

Then this potentially-disruptive technology can be tamed and even be a panacea for ills in businesses.

PROFESSOR DATUK DR AHMAD IBRAHIM

Fellow, Academy of Sciences Malaysia, UCSI University

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