Laos is bracing itself for the widespread use of blockchain technology in its payments industry, with digitization as its primary objective.
The Southeast Asian nation revealed its plans during the first edition of the Ministerial Conference on Blockchain 4.0 Digital Transformation held on May 26. Chaired by Prime Minister Sonexay Siphandone, the conference drew attendance from Laos’ budding Web3 space and stakeholders in the payments industry.
Blockchain 4.0 is revolutionizing #Laos. It's driving financial inclusion, fostering transparency, and enhancing security in transactions. Smart contracts and decentralized finance are opening new avenues for growth. Truly, a game-changer for the nation's economy. #MetaBankLaos… pic.twitter.com/oyaAKzFNjk
— MetaBank (@MetaBankSG) May 27, 2023
Singaporean software firm MetaBank disclosed in its report that the conference centered on the Laotian government’s desire to revolutionize the existing infrastructure in its financial industry using blockchain. Dubbed “Blockchain 4.0,” the government prioritizes industry collaboration, a healthy business environment, and concise rules to achieve its aim.
“Blockchain 4.0 is revolutionizing #Laos. It’s driving financial inclusion, fostering transparency, and enhancing security in transactions. Smart contracts and decentralized finance are opening new avenues for growth. Truly, a game-changer for the nation’s economy.” MetaBank’s tweet read.
The government says its mid-term goals are to increase its foreign reserves and rein its galloping inflation by leaning on the blockchain. For the short term, Laos is keen on improving its citizen’s standard of living and attracting foreign direct investment into the country.
Prime Minister Siphandone told conference attendees that the country’s lofty ambitions would be realized by infusing blockchain in official processes, including record keeping and other administrative purposes. Siphandone added that the first step would be the creation of a “Blockchain Technology Transformation Committee” tasked with formulating regulations for the industry.
The plans to embrace blockchain on a larger scale have elicited praise from several areas, with pundits noting that the move aligns with Laos’ Five-Year National Socio-Economic Develop Plan. The five-year plan, running from 2021-2025, is an attempt by the government to bring the nation’s economy to par with some of the region’s powerhouses like Hong Kong and China.
Not the first rodeo with blockchain
Laos turned its sights to blockchain in early 2023 after its central bank roped in a Japanese software firm to assist in creating a central bank digital currency (CBDC). The proposed digital version of Laos’ currency aims to improve remittances, bearing striking similarities with Cambodia’s Bakong system.
“CBDC is a way to advance the sophistication of payment systems, as well as ensuring economic security through a local currency that does not depend on other countries,” the central bank in an explanatory video said at the time.
Digital currency adoption in the country is surging to new highs following the government’s green light for mining and trading activities in the sector.
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