Integrating blockchain platforms in the financial systems may provide a solution to a wide range of economic problems in developing countries. The very first Digital Currency Blockchain Forum held in Kazakhstan on February 16, 2018 sought to address the issue of how to improve the credit accessibility of people living in poor countries.
The forum had an impressive panel of experts and advisers. These included experienced bankers, blockchain experts, and high-ranking government officials. Among the bigwigs in attendance were: theSecretary-General of Kazakhstani official digital currency platform, Director of the Kazakhstani Prime Minister’s Office, the Finance Director of the Russian State University of Finance and Economics, and the Insurance Department Director of the largest bank in India.
Credit Asia Chain (CAC) was officially launched during the forum. According to CAC CEO Erlan Mermanov, his company is a social credit platform that uses blockchain system in handling data.
CAC aims to provide long-term and integrated solutions to the credit information mess. The company aims to reduce the barriers in the credit sector by allowing various financial institutions to share data more effectively. It also aims to significantly reduce, if not totally eliminate, the high costs associated with government regulations.
Poor people and even many middle-class workers in developing countries in Asia do not have easy access to credit lines. The main reason for this is the incoherent and nonintegrated credit data. It is estimated that there are more than two billion people in the world or about 25 percent of the global population that do not have bank accounts.
Banks and other lending companies have difficulty reconciling information from various sources. Consequently, it becomes difficult to assess the creditworthiness of someone applying for a loan.
Integrating various data sources
Many developing countries have complete financial institutions that include both private and government financial institutions. However, the main problem is the way data is shared—or rather, not effectively shared—among the different financial institutions. This results in a lethargic economy as enterprises and individuals are unable to leverage their purchasing powers. A blockchain system can solve this problem.
CAC’s blockchain system will likely boost the economy of poor countries by providing an efficient and affordable platform that will facilitate access to social credits. In this manner, the economy will have an additional impetus for growth. Having easy credit access will provide the much-needed capitalizations for micro and small enterprises. It will also stimulate the market demand for consumer products.
Developing specific blockchain systems for Asian markets will also require various approaches and technical details depending on the problems that need to be solved. Investment companies like Global Blockchain (OTCMKTS:BLKCF) help provide solutions to these problems by investing in markets that are enabled by the blockchain technology.
Global Blockchain also provides incubation assistance for startup businesses that use this cryptocurrency platform. Blockchain-based startups in developing countries need incubation support to fully develop their potentials. Some of these startups may solve some of the credit-related problems while others might be able to provide a solution for registering and monitoring workers.
Aside from widening the accessibility of credits in developing countries, the blockchain system can also help in promoting social justice. For instance, blockchain system can be utilized to help stop slavery in the seafood industry in Asia.
It is reported by the Global Slavery Index that there are around 300,000 forced labourers in the fishery industry of Thailand. A blockchain system of registry for fishermen can help monitor how many are indeed legitimate fishermen and how many are slaves. Law enforcers from various countries can easily access the registry and the information can help the authorities in their investigations and law enforcement.
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