50% of government transactions to be on Blockchain by 2021
Government departments in the UAE are adopting blockchain technologies faster than the private sector, and there are more than 30 projects under development as part of Smart Dubai initiative alone.
The UAE has undertaken a broad and multi-faceted blockchain-themed initiative called Emirates Blockchain Strategy 2021, global consultant PwC said in a report titled Establishing Blockchain Policy. The aim of this strategy is to transition 50 per cent of applicable government transactions to a Blockchain by 2021, it said.
As part of this initiative, Smart Dubai has launched a blockchain platform as a service to host government use cases, and over all there are more than 30 blockchain platforms under development.
“Through this policy, government entities are encouraged to establish integration channels with the aim to improve functioning of services that cut across areas of responsibility of several entities, and increasingly to enable digital integration with the private sector,” the report said.
The UAE has been very active in this tech space, launching several programmes that include a legislative sandbox for fintech startups. “The sandbox enables the start-ups to explore the implications of the technology on the way business is conducted, to aid in defining what regulatory changes may be necessary to adapt to the developing landscape,” the report said.
Blockchain technology is being used to understand and analyse data and it is more than just a way to mint crypto-currencies, said Jan Grabski, Middle East Director of Technology Consulting at advisory firm PwC.
Grabski laid out a roadmap of making faster, integrated and effective policy decisions based on data through the use of Blockchain technology.
However, there are certain roadblocks owing to the lack of clarity on regulating Blockchain, especially in the crypto-currency space.
Abu Dhabi Global Markets Financial Services Regulatory Authority has initiated a regulatory sandbox and has issued guidance for the regulation of crypto assets with the aim to establish rules to govern the safe operation of crypto-currency related fintech businesses, while the Central Bank of the UAE has circled warnings confirming that crypto-currencies are not considered as a valid/recognised currency under current regulations/ legislation, and are banned from being used in a commercial transaction context, the white paper reported.
PwC has suggested high-level strategies on three fronts to enable blockchain platforms:
- Technology: Organisations should adopt a technology-agnostic approach when looking to implement Blockchain systems. Identities and data formats constitute core interoperability capabilities.
- Governance: Organisations need to adopt flexible policies towards Blockchain that are ready for a fast- paced and ever-changing technology landscape. Rigid polices risk becoming quickly outdated.
- Innovation: Organisations should lean more towards an innovative rather than risk-averse approach to Blockchain, as the latter will be prohibitive to launching successful initiatives.