In Indonesia, a country with 250 million people living across 17,000 islands, both the private and public sectors are actively exploring blockchain technology to overcome challenges managing data for everything from food output to election results to trade financing. The government has clearly taken a…
In Indonesia, a country with 250 million people living across 17,000 islands, both the private and public sectors are actively exploring blockchain technology to overcome challenges managing data for everything from food output to election results to trade financing.
The government has clearly taken a leadership role in exploring blockchain technology. Fithri Hadi, the director of financial innovation for the country’s Financial Services Authority, said the regulator has a dedicated team to study how blockchain technology can help the country’s financial services industry, Reuters reports.
Government policymakers also hope the technology can reduce graft in the country’s public programs, one of several areas where blockchain could be used to improve accountability.
Estimates on harvest production, for example, face the risk of being overstated since farm subsidies are allocated based on previous year’s harvests. The estimates are hard to verify. The government is also exploring using the technology to verify information from fund recipients.
Finance Minister Sri Mulyani Indrawat said her staff is investigating the use of blockchain technology for microloan programs and subsidy disbursement and to identify those groups who need government benefits.
Blockchain technology can also improve the verification of election results.
Horizon State, an Australia based polling service, intends to introduce a phone app on Sumatra island in Indonesia in July, allowing direct polling of local policy issues.
Horizon State’s community engagement platform allows constituents, including staff citizens or members, to participate in collaborative decision-making processes for greater economy, decentralization and convenience. The polling system could reduce voting fraud and address issues for countries with populations dispersed across Indonesia’s islands, said Nimo Naamani, Horizon State’s co-founder.
Jamie Skella, the chief product officer for Horizon State, recently welcomed participants to the first regional Global Forum on Remittances, Investment, and Development — Asia-Pacific to vote in the RemTECH Industry Choice Award, calling the event a great opportunity to encourage discussion about the merits and use cases of blockchain technology.
Several private initiatives are also underway throughout the country.
Online Pajak, an electronic tax filing solution, has introduced a blockchain supported app to allow customers to share encrypted tax data with treasury offices and banks. Charles Guinot, Online Pajak founder, said the tool for the first time will assure taxpayers they have paid their taxes.
OnlinePajak provides an additional layer of authentication for election results. The user creates an API key to authenticate the marketplace, then creates a user ID to append a new user to the user list of this marketplace. Indonesia’s second-largest bank, Bank Mandiri, is exploring the use of blockchain technology for trade financing, according to Rico Usthavia Frans, the bank’s director of digital banking and technology. Lenders are currently waiting for guidelines from regulators.
Indonesia’s largest private bank, Bank Central Asia (BCA), meanwhile, has invested 200 billion rupiah (approx. $15 million) in financial technology startups and companies. The bank is establishing Central Capital Ventura, owning all 100% of the new capital venture firm. According to an official BCA statement submitted to the Indonesia Stock Exchange, investments will directly benefit BCA and its financial services offerings in the country.
Blockchain technology has been introduced to other emerging markets, such as Estonia, where it has been deployed since 2012. Its applications include judicial, legislative, national health and commercial code systems.
Iwan Djuniardi, director of transformational technology for the tax office, cautions Indonesia’s adoption of the technology could be slower since it takes time to process management changes. Even cloud technology is still being debated in the country.
Featured image from Shutterstock.
Last modified: May 20, 2020 8:49 PM UTC