Smart Dubai offers Blockchain Platform as a Service
The potential use and benefits of blockchain are enormous. However, corporates and governments around the world have not embraced it with open arms — yet.
While it is a game-changer, blockchain is disrupting the world’s systems, especially financial, to shift the concentration of power from central authorities to being shared by the people. It is touted by innovators and industry leaders as the next big thing. But it comes with its own set of challenges, which is why the adoption rates for the technology have been slow.
Even today, most people who invest in blockchain projects, invest in its cryptocurrency for money trading incentives; and this is a hurdle that innovators face. While the cryptocurrency is an attractive aspect to lure people, it is also fickle with people not understanding the potential of the technology and cashing out as soon as the value of the crypto asset increases.
Having said that, the blockchain technology itself can, in theory, be used without the crypto asset being linked; but such use cases are only applicable for small entities who use the technology for their systems. This is what Dubai and the UAE are looking to do.
A whitepaper by PricewaterhouseCoopers (PwC) acknowledged the larger challenges that come with the benefits of blockchain, such as “privacy, performance, unpredictability, security, access to law enforcement mechanisms, and cryptocurrency as a new type of asset."
In the financial sector, blockchain has a more critical role to play that requires stronger regulation. However, in a closed network blockchain for use by certain entities or a country can arguably have more benefits than drawbacks.
Dubai, as well as the UAE, is on track to move 50 percent of its government transactions to the blockchain by 2021, under the Emirates Blockchain Strategy 2021.
Moreover, over 30 projects are currently under development by Smart Dubai alone.
As part of the Blockchain Strategy, Smart Dubai has also launched its blockchain as a service (BaaS) platform to host government use cases for the technology to be better adopted by entities.
The blockchain platform will certainly improve functioning and “enable digital integration with the private sector,” said the report.
However, to make the most of the blockchain technology, and balance out the benefits and challenges, there are a number of aspects that governments need to consider, such as regulation, adoption, and security.
The whitepaper by PwC, named “Establishing Blockchain Policy”, also details out certain high-level strategies for the adoption and use of the 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 policies 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.
Regulation is a critical aspect of cryptocurrency for safer and legal use of the blockchain platform. Abu Dhabi Global Market Financial Services Regulatory Authority (ADGM FSRA) has been leading the way through the establishment of regulatory framework for cryptocurrency and related transactions.
The UAE is also leading the way in the adoption of blockchain. We are excited to see how this technology transforms the government processes, making our cities smarter.