Myanmar is at the forefront of the piloting of blockchain technology – an innovative way of making online transactions easier. The technology, that uses a shared digital ledger to record transactions across a number of computers, was used recently by BC Finance, the biggest microfinance institution in Myanmar.
BC Finance used blockchain technology to record transactions in collaboration with Infoteria Pte. Ltd. (Singapore), a subsidiary of the Tokyo-based Infoteria Corporation. Working together on the project, the two teams moved the loan and deposit account data which had been stored on the main systems of BC Finance, onto ‘mijin’, a private blockchain.
So why have BC Finance taken the bold step of using blockchain technology in this case? Well, the team anticipate that adopting blockchain will be a driver for growth in the microfinance sector in which they operate – not least because it will help to cut costs and reduce administration. In microfinance in particular, with its huge amounts of small transactions, this is no small matter.
A new way of working
“We are very excited about this first project with Infoteria, testing ASTERIA private Blockchain in our core banking system,” says Jeremy Kloiser-Jones, Chief Executive Officer of BC Finance. “However this is just the start. While we expect it to bring significant savings, leveraging the technology to the next level — replacing analogue processes and freeing up employee and customer time, will likely produce more significant savings.”
It’s clear then that blockchain technology is ideally suited to the world of finance, and it seems that many commercial banks across Asia – and in Myanmar in particular – will follow BC Finance’s lead in adopting it. But what is it about countries like Myanmar that encourages this kind of innovation?
The perfect environment
Well, a lack of existing advanced accounting systems certainly makes the job easier – blockchain technology can be piloted easily as an upgrade of a business’s financial systems – and if networks and power supplies are robust enough then it can be an easy win for many companies to adopt the technology.
Another reason for the adoption of blockchain projects in Myanmar is a lack of regulation (so far) that has created the space necessary for companies to try something new. It remains to be seen whether this situation will continue, but for now we can be proud that Myanmar is one of the countries whose businesses are enthusiastically engaging with this new technology.
A resilient system
The adoption of blockchain technology by the Yangon Stock Exchange in 2013 was another great example of how projects in Myanmar have lead the way in this area. In the case of the stock exchange, blockchain has been an ideal addition to their transactional systems – particularly because of its resilience to any loss of data through power outages. A Japanese business who have a stake in the YSX agreed, explaining that blockchain technology is “extremely attractive as an infrastructure technology with high availability, immutability, and high resiliency from system failure at a relatively low cost.”
These are all qualities that will continue to make this kind of innovative technology attractive to businesses in Myanmar, and it will be exciting to see how the situation develops.