The Malaysian government wants to integrate blockchain technology into its most significant industries, according to Asian Correspondent.
Said industries are Islamic finance, renewable energy, and agriculture. The government has created a task force – the Malaysian Industry-Government Group for High Technology (MIGHT) – to drive this initiative.
Malaysia, population approximately 32 million, is a majority Muslim country, and Islamic finance accounts for 28 percent of the Malaysian financial sector. The government wants this share to grow over the next few years.
Islamic finance is characterised by the forbidding of usury, which is the practice of generating money from interest on a loan. Sharia law considers a system in which a borrower bears the burden of risk to be exploitative and wasteful. For this and other reasons, many wondered if cryptocurrency was compatible with the traditional code.
However, a report published in April 2018 by a Muslim law expert concluded that Bitcoin is halal as long as it is used as a payment system (or other utility), and not for investment purposes. This is because Islamic law states that money must be based on a real commodity. In fact, mufti Muhammad Abu Bakar found that blockchain technology is actually more acceptable than traditional banking, because it proves ownership undeniably.
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The ethical demands of Sharia law mean that Islamic finance is expensive for the companies involved; the Malaysian government hopes that blockchain technology can be used to lower these overheads, for example by the use of smart contracts.
Agriculture accounts for 8.1 percent of Malaysia’s GDP, and of that, 43.1 percent is in palm oil. The edible oil is the country’s biggest export, but the industry is criticised because of a propensity for environmental damage and human rights abuse.
It is thought that blockchain technology can be used to certify production lines, ensuring accountability.
Blockchain technology could be used to allow people to sell their spare solar power (as has been done in Australia), force suppliers to be more open about how their energy is created, which again brings more accountability. This is not the first time that blockchain has been utilised to help the environment; in May 2018, IBM released a token called ‘Verde’ which is to be used to represent carbon credits.
Mastura Ishak, Programme Director of MIGHT, told govinsider.asia: “Blockchain is interesting because it allows small players to have a say about what’s going on,”
In June 2017, a 10,000-square-foot Bitcoin centre was opened in Kuala Lumpur by the NEM Foundation.