Laos government to embrace Blockchain technology for digital transformation

The global blockchain market was valued at $4 billion in 2020 and is expected to grow at a CAGR of more than 47% between 2020 and 2030. Blockchain is a technology that can disrupt the entire value chain of the payments industry. Central banks are leveraging blockchain as the key infrastructure to develop digital currencies.

Central bank digital currencies (CBDCs) would help reduce financial exclusion among unbanked individuals by making funds accessible via individuals’ smartphones. Amid this, recently the Laos government plans to advance the digital transformation of the country using blockchain technology.

The government has proposed the theory of blockchain 4.0 to the world. It is propounded for open collaboration and global co-construction and aims to boost Laos potential to be a builder and beneficiary of the global digital world order through national digital operations.

The government will develop and utilize blockchain technology to digitize various government tasks. For example, it will apply extensively to administrative management and public services. To promote the digital transformation of Laos, the Ministry of Technology has signed a cooperation agreement with Singapore’s MetaBank.

MetaBank, a Singaporean software company, stated that the meeting aimed to explore Laos’ digital potential concerning the utilization of digital technology. It’s believed that the introduction of the Blockchain 4.0 topic was done. MetaBank and the Laotian Ministry of Technology intend to develop a blockchain research and development platform to back Laos Blockchain 4.0 project.

The conference emphasized objectives conferring to Laos’ digital economy such as using digital technology to generate fiscal revenue, bolster foreign exchange reserves, curb inflation, foster economic growth, enhance living standards and boost international competitiveness in the short term. From what it’s understood, the conference highlighted the proposal to create a Blockchain Technology Transformation Committee.

The country has taken appreciative steps to strengthen the digital ecosystem in the country. Laos’s central bank started testing a central bank digital currency (CBDC) prototype on February 7, with the support of Japanese fintech firm Soramitsu and the Japanese government. The Bank of the Lao PDR tested the Digital Lao Kip, or DLak, using a blockchain-based system developed by Soramitsu.

It is important to note that capitalizing on technological advances could revamp payment systems to create more transparency in terms of the flow of funds and improve transaction monitoring. Additionally, blockchain technology can make transactions more efficient by eliminating intermediaries and directly connecting participants.

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