Paper to programming: how digital currencies are globalising our economy

The underlying narrative of the 21st century has been underscored by technological advancements, whether it be in smartphones and tablets, the advent of social media, machine learning, and artificial intelligence, to name a few.

One such transformative technology is blockchain, the distributed ledger technology that underlies cryptocurrencies. With innovation as the cornerstone of human development in the past few decades, countries have continued to champion economic strategies with an emphasis on digitalisation and research and development as technology plays a more crucial role in our everyday lives.

Developed economies such as Singapore have emerged at the forefront of the embracement of emerging technologies such as blockchain, underscored by a supportive yet rigorous approach to cryptocurrency regulations.

With its progressive approach to handling emergent technologies, Singapore has gradually solidified its position as the region’s leading blockchain hub, allowing parties to engage with the technology with greater confidence, whilst offering regulatory support and resources to propel experimentation. Ranking fifth in the 2018 Global Innovation Index, Singapore has pioneered the use of cutting-edge technologies in the hopes of fostering both an economy and a society that is characterised as forward-thinking and innovation-driven.

Singapore is in fact home to some of the industry’s earliest institutionals explorations into distributed ledger technology such as the Monetary Authority of Singapore’s (MAS) Project Ubin which began in 2016. The Lion City is also home to one of the region’s leading blockchain research labs, the National University of Singapore’s CRYSTAL Centre which was established in late 2018 and recently became the first higher education institution in Southeast Asia to join Ripple’s University Blockchain Research Initiative (UBRI).

As a whole, the Asia Pacific region has long stood at the vanguard of technological innovation: cell phones were ubiquitous in many ASEAN countries whilst they were still novelties in the West and HDTV was standard in some Asian countries years before it reached American shores. Similarly, spearheaded by applications such as AliPay and GrabPay, the rise of mobile payments first entered everyday life in the region ahead of any other location worldwide. If past examples like these hold, cryptocurrency’s first popular successes might occur in the Asia-Pacific region.

Indeed, for those underdeveloped economies, cryptocurrencies and their underlying technologies also have the potential to serve the needs of billions excluded in today’s existing financial systems. As we’ve seen in notable Western countries such as Argentina and Venezuela, cryptocurrency doesn’t knock holes in the economy’s facade. Rather, it opens alternative doors that protect individuals and enable them to prosper in the harshest environments. Countries such as Vietnam have seen the impact of cryptocurrencies in benefitting a large unbanked population that remains underserved by financial institutions. Similarly, the Philippines has seen a spike in cryptocurrency interest, with over 5 million users now on-boarded onto the country’s cryptocurrency exchange that helps unbanked customers with paying bills as well as purchasing digital assets.

It can be challenging to discover parallels between cryptocurrency and other transformative technologies, but the widespread adoption of mobile and contactless payments might provide the analogy. Mobile payments, which are most successful in Asian economies, are an efficient technology: they put a wallet in your cellphone and eliminate the need for folding bills, counting coins, and swiping cards.

Cryptocurrencies and the blockchain hold similar potentials, but their utility is broader. Smart contracts can enable automatic payment upon an action’s completion or a certain set of conditions being met. Blockchains can accelerate property transfer, making, for example, the process of buying real estate far less onerous than it is today. And with new use cases imagined every day and implemented every week, it’s likely that many transformative ideas remain in the future.

Though many of the most popular proposed futures for blockchain and cryptocurrency revolve around individual use, both enterprises and governments in the region have come to explore its potential. Despite its ban of cryptocurrencies, China holds the greatest number of blockchain patents in the world, some held by leading companies such as Alibaba and the People’s Bank of China.

In Singapore, the latest developments with MAS’s Project Ubin saw a successful trial in partnership with the Bank of Canada, in order to explore the use of central bank digital currencies in cross-border payments. Whilst Thailand’s National Electronics and Computer Technology Center has been working on a blockchain-based voting solution to further digitise the country’s electoral process. In order to bring cryptocurrency use to the masses, Samsung’s forthcoming Galaxy S10 phone will also have an integrated cryptocurrency wallet. With explorations into blockchain ranging from a variety of industries to applications, a future wherein its use will come to permeate the many technological infrastructures we rely on today is on the horizon.

Since the dawn of the Age of Information, the arrival of the first technological inventions whether it be the Internet or the very first personal commuter, radically shaped on information was shared and disseminated. No longer restricted by physical borders, information flowed seamlessly and freely.

As we usher in the next stage of the digital revolution, blockchain is poised to amplify these effects further, in such a way that prioritises even greater connectivity and transparency, benefitting all users alike, irrespective of who they are, where they’re from, and their socioeconomic status. With blockchain technology, we may at last approach a new paradigm for the internet: The Internet of Value is on the way, and its first nodes may go live in Southeast Asia.