The new technology has the potential to boost our development and check financial fraud
Bangladesh is entering into 2018 with more than 600,000 Rohingya refugees, which is an addition to an already existing half a million refugees of stranded Pakistanis after the liberation war in 1971.
This unexpected curve ball can derail the country from fulfilling its future development goals and set us back for decades, unless we do something to accelerate development.
Fortunately, we have an opportunity that is waiting to be explored, which can not only put us back on track but also speed up our development exponentially. This new technology is destined to be among the revolutionary innovations of human civilization, comparable to the compass, penicillin, and electricity.
I am referring to “blockchain technology.” Bangladesh is currently one of the few countries in the world that is yet to embrace this efficiency-enhancing technology.
Back in the 90s, Bangladesh missed out on the internet and technological boom and thus fell behind many other countries.
Nonetheless, the government’s ICT initiative has largely made up for that lost opportunity, which is a further indication of the importance of embracing new technology.
Blockchain is capable of offering valuable intelligence for governing business trades and can also exterminate many fraudulent practices
Blockchain has transformed the way business works. It is capable of running compliance and audits if you program it right and is not just limited to bitcoin or other cryptocurrencies.
It’s a much bigger concept that has fundamental rationalities to enrich the validity of any service or product in relation to the price and demand.
Before the advent of modern currency and monetary systems, world economic systems were dominated by the arsenal power of big emperors like the British and Spanish. Verification didn’t matter — the king’s or queen’s orders were good enough to have the title on anything, living or not.
When paper money was introduced several centuries back, it took a long time to accept the true power of money and how this can be utilised as a tool to help people in sharing and trading their resources among themselves.
One of the disadvantages of paper money is verifying the basis of its value. The way we know someone has money is generally through a statement kept in a bank ledger. But by now we know that information can be manipulated in those ledgers, making private transactions with money or titles on an asset vulnerable to frauds.
For an example, if a buyer has Tk1 lakh, he may promise this money to two different sellers for goods worth Tk2 lakh. Hence, one of the sellers will be unable to sell his products and may ultimately face financial consequences for not collecting the money as promised.
Blockchain will stop the buyer from making these promises to multiple sellers: He can’t simultaneously use the same money for both transactions as all transactions are instantaneously verified.
Adapting to change
With our growing population and constant urban migration, social systems have changed drastically, particularly over the last two decades. The result is that people don’t know much about their surroundings anymore. The natural social systems and networks that were once used for verification purposes — whether for a trade or for recruiting a new employee — have been obliterated.
We are starting to live and feel much like the people in developed countries do — unknown and isolated, even in the midst of millions.
Crime is at an all-time high as the shame of getting caught and facing consequences from family and society are no longer an issue.
Financial blockchain systems can’t compensate for all these problems related to eroding social capital, but it can help us adapt to changing social and economic systems.
Blockchain is capable of offering valuable intelligence for governing business trades and can also exterminate many fraudulent practices.
This is why the total market capitalisation of cryptocurrencies could hit $1 trillion in 2018, boosting private sector growth and foreign investment for many countries.
The government’s role
It is imperative that Bangladesh incorporate blockchain technology if we want to keep up with the rest of the world. Like Japan or South Korea, we will benefit if a carefully considered regulatory approach is taken rather than banning this technology altogether and losing all the benefits it has to offer in the process.
Complex and comprehensive regulations will be necessary to process transactions in cryptocurrencies, including their exchange for traditional currencies on a local exchange. The government can help by funding research to draw effective regulations.
It can sponsor experts in blockchain technology to develop a team to deliver an architectural support with a holistic view of the country’s strategy, processes, information, and information technology assets.
The existing balance of power among nations will shift in the future depending on how they use this new blockchain technology.
In most parts of the world, it is still sponsored in private levels. Most recently, major financial companies are investing in blockchain.
If Bangladesh government invests in blockchain, there is a better chance for us to shine on the world economic landscape and reach our goals for 2050. Let 2018 be the year we take that step.
Mazher Mir is a financial advisor for Morgan Stanley, USA. He has 15 years of experience in the American financial industry, and is registered with NYSE and US Investment Authorities. He is advocating for international investments in Bangladesh by consulting for technological infrastructure developments.