The Malaysian government is seeking to explore blockchain solutions in the nation’s three largest industries: renewable energy, palm oil, and Islamic finance.
A task force named the Malaysian Industry-Government Group for High Technology (MIGHT) will be spearheading the move to adopt blockchain in each industry in order to increase transparency, sustainability, and logistical efficiency according to a report published last week.
MIGHT holds talks with energy companies in Malaysia to evaluate the ways they could be using blockchain to increase renewable energy adoption. When sellers put energy on the blockchain, the transparent nature of the system means that they must declare exactly how the electricity was generated for buyers to scrutinize. Through blockchain adoption, buyers can now choose to buy green or renewable energy only, whether from energy companies or even private owners of solar panels with excess energy, a process which is often far more efficient than sending energy over longer distances from non-local power stations.
Tenaga Nasional Berhad (TNB), Malaysia’s sole provider of utilities, has already looked into blockchain solutions and the General Manager of Innovations stated that the company has been holding workshops to identify use cases and discuss adoption with business owners.
Palm oil is a controversial product at the moment due to unsavory reports of bad practices and child labor being used in the industry around the world. Blockchain adoption can help identify certified palm oil operations with ethical practices and allow buyers to identify the source of their palm oil before making a purchase.
Around 8% of Malaysia’s GDP comes from agriculture, and 43% of agricultural revenue comes from palm oil sales, making this a major area to undergo blockchain adoption. As well as having benefits for buyers, blockchain adoption would help the government identify and monitor palm oil operations with sustainable practices and regulate accordingly.
As CCN has reported before, Islam forbids usury (the collection of interest on a loan) under the principle that money has to be based on a real commodity and cannot simply be generated from more money. Debt creation must be backed by something like gold as opposed to futures as is common practice in Western fractional reserve banking, the system that is to blame for the 2008 world financial recession.
The strict ethical regulations in Islamic banking create higher overhead costs in the industry, and Malaysia is looking into how blockchain could help offset these costs while remaining compliant with Sharia law. Already in the Middle East banks have begun pegging debts to units of gold and representing the debt as a smart contract on the blockchain.
Crypto firms in Dubai and Malaysia have also pegged sums of gold to cryptocurrency units to allow debt creation compliant with Sharia law.
Images from Shutterstock.
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