Dubai’s commitment to putting all its documents on Blockchain’s shared open database system by 2020 could help to cut through Middle Eastern bureaucracy, speed up civic transactions and processes, and could help bring a positive transformation to the whole region.
What is Blockchain?
Blockchain is an incorruptible peer-to-peer network (a kind of ledger) that allows multiple parties to transfer value in a secure and transparent way. Blockchain’s Co-Founder Nic Carey describes Blockchain as being like “a big spreadsheet in the cloud that anyone can use, but no one can erase or modify”.
The developers of the Blockchain system say that the trust between participants is not necessary because trust is embedded in the system itself, and that access to all relevant information is available to participants.
What Can It Be Used For?
Blockchain has multiple possible uses e.g. as a global property rights / land registration system, as the basis of a non-centralised (and therefore faster) payment system, and as a system for exchanging / buying / selling all kinds of collateral such as stocks, bonds, land titles and more.
What’s Happened in Dubai?
As well as Dubai’s commitment to putting all of its documents on Blockchain in the next few years, the emirate has also founded a public-private initiative called the Global Blockchain Council to foster the development and use of Blockchain technology in and between local government teams, local businesses and international start-ups.
How Blockchain Could Help in the Middle East?
It is thought that Blockchain could help the whole Middle East region in many ways including:
- Increasing transparency and liquidity in the real estate market. Since land registration in Middle East economies still relies on paper for registration and title transfers, the digitising of this process could speed everything up.
- Faster and cheaper transactions in key industries. In the oil-industry for example, crude oil sales to international buyers still require traditional wire/cheque transfer or Swift payment methods, and cross-border payments can take between two and three days to complete. With Blockchain, payments are almost instantaneous and take around 15 minutes to complete. The lack of centralisation i.e. no central banks means that the transactions could take place easily with customers in different time zones.
- Helping governments. This could be to collect taxes, deliver benefits, issue documents, and to assure the supply chain of goods and the integrity of governmental records.
What Does This Mean For Your Business?
For businesses in Dubai and across the Middle East, this could make trade and development easier and faster. For UK businesses dealing with or wanting to deal with businesses in Dubai, this could also be a very positive development that could facilitate trade and open up new opportunities.
The days when businesses can buy, sell and transfer funds quickly and easily anywhere in the globe are now not far off thanks to the development of the Blockchain technology. If the technological challenges of finding ways to make an all-purpose Blockchain can be met, businesses will be less reliant on big banks and will be able to use new financial systems that are flexible, interoperable, secure, and convenient.