Malaysia wants to put major industries on blockchain

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The Malaysian government is seeking to utilize blockchain to increase transparency, sustainability and logistical efficiency of its three largest industries—renewable energy, palm oil, and Islamic finance.

According to reports, the government has appointed a task force named the Malaysian Industry-Government Group for High Technology (MIGHT) to oversee the blockchain adoption. Mastura Ishak, program director at MIGHT, told GovInsider: “Blockchain is interesting because it allows small players to have a say about what’s going on.”

The Malaysian government believes that adopting blockchain in the renewable energy industry will help bring new players to the table and increase energy production in the country. Currently, Tenaga Nasional Berhad (TNB) is the only utility provider in the country.

The new project will allow private solar panel owners to sell any excess electricity they have. In the new system, electricity sellers will be required to state how they are generating their electricity, while consumers will have the choice of deciding which sources of electricity they would like to use.

By allowing private solar panel owners to sell their surplus electricity, the country will also save up on the electricity lost during long-distance distribution.

For the palm oil industry, the Malaysian government hopes blockchain will help bring major changes that will improve the country’s economy. Palm oil is Malaysia’s biggest export, accounting for about 43.1% of the country’s agricultural income.

Palm oil has been facing problems for quite some time now. This happened after reports emerged associating the industry with bad practices and child labor. MIGHT believes blockchain adoption can help identify certified palm oil operations which will help eliminate illegal operations. The government will also be able to monitor and regulate the operations.

Finally, there’s Islamic finance. Islamic laws state that money has to be based on real commodity and cannot be created from more money. The strict nature of Islamic laws have caused high overhead costs on the industry, which is reflected in the country’s economy. The government is looking at how they can offset these costs while also adhering to Sharia laws. Blockchain and the adoption of smart contracts could help offset some of these costs.