Why Minister Mboweni should focus on Blockchain technology
BY: Brenton Naicker
It’s been a buzzword for government and industry in recent years, but the Fourth Industrial Revolution (4IR) hype is far from over. As the country eagerly awaits Finance Minister Tito Mboweni’s 2021/22 Budget Speech later today, players in the blockchain space will be keeping a close eye on the minister’s pronouncements on cryptocurrency regulations, investment in blockchain technologies, and government’s plans to utilise 4IR technologies for social good.
Since Mboweni first announced in last year’s Budget Speech that “South Africa is moving with the fourth industrial revolution,” there has been increased focus on just how government plans to adopt and incentivise the adoption of 4IR technologies such as Artificial Intelligence (AI) and specifically blockchain in their transformation models - technologies which both possess massive potential to spur inclusive growth and address social and economic challenges in South Africa.
For the past few years, Binance, has taken a consolidated approach to using blockchain technologies for greater societal good – through incubator structures for startups, education and charity initiatives; and the recent launch of a $100 million global accelerator fund for blockchain developers. All this in a bid to unlock blockchain’s potential in the developing world, and to help transform some of the continent’s biggest challenges into triumphs.
And it’s a model that can be emulated in South Africa too. Central to this narrative is the need for government and industry to work cohesively in bringing out the best of blockchain - by unlocking its technological potential as a powerful tool for change. Blockchain is redefining business processes, has the ability to enable solutions to problems we never thought possible, and while we’ve already seen some brilliant forward-thinking in terms of rhetoric from the government - who have explicitly dictated within their existing 4IR strategy that blockchain is one of the pillars for economic growth - there needs to be more follow-through with respect to this.
The economic devastation caused by the Covid-19 pandemic on the country’s fiscal health over the past year cannot be ignored, and it will be interesting to note just how the finance ministry plans to mitigate the effects of such moving forward – and specifically with a forward-thinking, out-of-the-box approach to accessing existing technologies like blockchain to do so.
Another focus of the minister’s speech today will be on seeking further regulatory clarity of the digital assets industry. Of late, government has succeeded in creating a conducive environment for compliance and innovation within the crypto assets, fintech and blockchain spaces. Mboweni has previously spoken of developing a cohesive governmental response to cryptocurrencies and a unified intergovernmental regulatory framework.
This will allow for organisations using blockchain technology to enable efficiency and access to the available capital to achieve outcomes. And it will allow for Binance, and others like us as a platform, to expand the reach of blockchain and the efficiencies it can deliver on the ground. Without this regulatory clarity it becomes difficult to deploy certain business models, concepts, and to utilise the technology to its full potential – technology which could potentially allow us to alleviate some of the economic ailments that are a result of COVID-19. While the South African regulators have been forward thinking and have fed from global best practices to be proactive instead of reactive with respect to regulating the sector, they have been treading carefully on this issue.
While South Africa has a long way to go to effectively prepare for the inevitable 4IR wave, this can be achieved through the implementation of a multi-faceted and multi-disciplinary approach. Engagements with the private sector, and especially the digital assets industry, are necessary to inform change and adopt a more mainstream acceptance of blockchain technologies. The finance minister and other policymakers need only to cast their eyes on the best practice approaches that crypto organisations have implemented to embracing blockchain tech over the years, in order to realise the vast potential it possesses. If not now Mr Minister, then when?
Brenton Naicker is the Business Development Manager for Binance South Africa.