Reducing paper transactions should be the focus of banks in Dubai before adopting Blockchain technology and cryptocurrencies, experts have said.
The emerging technology was discussed along with the predicted impact of cryptocurrencies by a Smart Dubai panel hosted by Xische & Co, a collective examining change in future innovation and culture.
While the private sector retains a certain fear factor towards Blockchain and cryptocurrencies, more transactions completed via the technology are inevitable as the financial sector evolves, panellists said.
“This technology will help us to make huge savings in time and resources, but the conversation now should be about going digital first, rather than just about adopting Blockchain,” said Wesam Lootah, CEO of Smart Dubai, a government backed initiative to unite the private sector with public bodies.
“Many transactions still require paper in Dubai, so bringing in this kind of technology has huge potential.”
Adopting a paperless system without the need for chequebooks, before Blockchain and cryptocurrencies are adopted, should be the primary focus of the banking sector Smart Dubai officials said.
Although many businesses still accept cheques, other countries have phased out the payment form by making it an expensive process and charging as much as 25 Euros (Dh114) to cash a cheque.
Blockchain is the undergirding technology on which the Bitcoin system operates, is tamper proof and adds a layer of security across a wide network of connected machines.
The secure technology enhances trust among participants on the network, which is an attractive option for banking institutions and customers.
“Whether we like it or not, and whether the banks like it or not, Blockchain technology and cryptocurrencies are here, and they are here to stay,” said Ali Sajwani, founder and CEO of Grape Technology.
“Dubai will be ahead of the rest when developing the control and regulation of this area.”
Since 2011, an estimated US$120 billion (Dh440 bn) has been transferred via Blockchain.
In 2016, IBM issued a report predicting that 15 per cent of global banks would implement Blockchain technology by the end of 2017, and that 66 per cent of banks would have Blockchain operations in commercial productions and at scale by 2020.
“Cryptocurrency is like a train that is running very fast and is not going to stop at any station,” said Younus Al Nasser, Assistant Director General of Smart Dubai.
“We do not know where it will go, but there is a need to jump on board.”