BAHRAIN is developing a system that will help drive multiple industries and generate cost savings worth billions of dollars, according to a senior official.
The system will use a wide range of technologies in different sectors to make jobs easier, efficient and, more importantly, cost effective in the future.
The initiative is part of the government’s efforts to explore and under the new type of Internet – blockchain technology – to diversify economy and fulfil consumer demands, said Information and eGovernment Authority chief executive Mohammed Al Qaed.
A blockchain has been described as “an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value”.
“We have witnessed how the ‘Internet of Information’ changed our societies over the past two decades; we are now entering a phase where blockchain is likely to do the same by having new models of ‘Internet of Trust’ and ‘Internet of Value’,” said Mr Al Qaed.
“This complex invention is part of a new platform technology that we believe will help drive multiple industries and generate cost savings worth billions of dollars.”
He was speaking at the opening of a two-day World Blockchain Congress, held at the Sofitel Bahrain Zallaq Thalassa Sea and Spa.
Mr Al Qaed said blockchain technology can be used in banking, insurance, media and health care sectors and, according to studies, cut bank costs by $15 billion to $20bn a year by 2022.
“Bahrain has the essential ingredients to nurture the development of innovation in technology.
“We have a committed leadership, a well-established legal infrastructure, international connectivity, vibrant business community and a strong network of professionals who are technology-savvy.”
The GDN previously reported that the Economic Development Board (EDB) had launched a $100 million fund-of-funds to attract investors and start-ups.
With a massive regional fintech market of up to $1.5 trillion in the Mena (Middle East and North Africa) region and spending on blockchain expected to double over the years, Bahrain is set to become the region’s top fintech destination.
The General Directorate of Traffic earlier this year announced it was planning to introduce a blockchain-based vehicle registry system.
Mr Al Qaed said the Central Bank of Bahrain (CBB) has created a regulatory sandbox for FinTech that allows firms to showcase their innovative technologies through lighter capital and entry requirements.
“The government of Bahrain is highly committed to drive the development of this technology, but we must first invest in building the right ecosystem to protect the interests of all parties,” he said,
“Blockchain is not all about digital currency but we need to understand all the risks involved as we have seen Bitcoins peaking at almost $20,000 in December and later crashing to over $8,000,” Mr Al Qaed told the GDN on the sidelines of the conference.
“Most of the applications I have seen in the region are not concretely aimed at cutting costs or solving problems, but we are open to adopting the best ones.”
Bahrain officials have maintained they were open to experimentation with blockchain-based cryptocurrencies like Bitcoin but wanted to ensure adequate protection for consumers.
“Gulf is a land of opportunities and new technology is widely accepted here unlike in other countries,” said TraiCon events director Shyuj Kumar.
“I think Gulf countries are slowly moving towards cashless economies like, for example, the Sweden model.”
He said the conference was being hosted in Bahrain to showcase different technologies, and a similar forum is being planned for the next year too.
“There is good support from the CBB and the EDB to promote blockchain technology which is the new gold and, in many ways, touted as 21st century pyramid scheme.”
sandy@gdn.com.bh
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