Smart Dubai, a government-run entity has partnered with IBM and ConsenSys for a plan to implement bitcoin database technology blockchain. As per the pact, IBM will be the lead strategic partner and ConsenSys the advisor for the project.
In the first stage, Smart Dubai will conduct workshops with government, semi-government and private organizations to identify services that can benefit from blockchain technology and educate the public and private sector communities.
In the second phase, public and private sector firms will roll out blockchain pilot projects throughout the year.
Smart Dubai will also launch blockchain as a service platform for government entities to implement their projects.
The initiative will position Dubai as a pre-eminent blockchain powered government, said H.E, Wesam Lootah, CEO of Smart Dubai Government Establishment.
“The effort is crucial to ensuring that the city as a whole is moving in the same direction, taking advantage of synergies, and avoiding duplication of efforts and costs,” Lootah said.
But What Is Blockchain?
Blockchain technology involves digital currency bitcoin to help banks speed up their dealings with one another.
Blockchain works as an electronic transaction-processing and record-keeping system.
It allows parties to track information through a secure network, with no need for third-party verification.
Using math and cryptographic tools, blockchain technology helps create an open and decentralized database of transactions, monetary or otherwise.
This creates a record whose authenticity can be verified by everyone involved in the transaction, effectively allowing institutions like banks to cut transaction cost and time.
The technology also allows trading parties to track information via a secure network, without the requirement for any third party verification.
Last month, to embrace technology as a lender, National Bank of Abu Dhabi became the first bank in the Middle East and North Africa to introduce real time, cross-border payments on the blockchain.
The bank formed a partnership with Ripple, a US startup specializing in blockchain technology.
Through the alliance with Ripple, NBAD will enable customers to cut the cost and speed of payments.
In October, the UAE’s largest lender, Emirates NBD, said it was working with Indian bank ICICI on a pilot project to use blockchain technology for global remittances and trade finance.
Blockchain technologies have the potential to revolutionize the rapidly growing financial services sector in the UAE and broader GCC region, according to a report by consulting and technology firm Booz Allen Hamilton.
The report titled ‘Blockchain: Application to Financial Services in the GCC Region’ has pointed out how blockchain can impact key areas of finance, including retail payments infrastructure, remittances, forex trading, trade finance, capital markets and compliance activities.
The UAE government has been trying to establish the country as a major fintech player and has already started to experiment with the potential uses of blockchain in the public and private sectors.