Here's how blockchain has revolutionised the regional financial sector
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Here’s how blockchain has revolutionised the regional financial sector

Here’s how blockchain has revolutionised the regional financial sector

While blockchain technology is still in its early stages in the Middle East, public and private sectors are aggressively using it to streamline operations

Divsha Bhat

Blockchain is rapidly growing in adoption in the GCC region, driven largely by the push by regional governments to digitise operations.

Recently Gulf Business had a chance to sit down for an exclusive interview with Juwan Lee, chairman and group CEO of Nexchange Group who discussed and shared his insights on the current market trends.

Is blockchain worth the hype?

Blockchain hype has its ups and downs. But beyond that, the fact that the world is moving away from centralisation to decentralisation, and the Fourth Industrial Revolution is underway – thanks to many emerging technologies like blockchain that see relatively slow, but progressive adoption. Blockchain is ready to be implemented today because so many technologies are already in place, like mobile phones, the internet and the cloud. Moreover, the pricing structure in the centralised world has become too high, and it’s the reason why blockchain is a great tool for disruption.

From your experience, how do you think blockchain technology has evolved in the Middle East region?

This region has developed rather quickly in terms of business and tech opportunities. Add to this, local natural entrepreneurial talent, interest in technology application, and regulatory certainty — those seeds are already in the rich soil of the Middle East. Hence, blockchain has an opportunity to flourish here.

In my opinion, one of the most important building blocks here are the very progressive regulation efforts shown by UAE, Bahrain, and Saudi Arabia. These countries are forward-thinking and tech-friendly jurisdictions. Central banks actively explore digital currencies, while fintech sandboxes support entrepreneurs from across the ecosystem. And of course, Emirates Blockchain Strategy plays a big role in the state-level blockchain adoption not only in the Middle East but globally, too.

Which industries do you think blockchain will impact the most?

Undoubtedly, the industry that sees a lot of blockchain development and will be probably decentralised is logistics, and supply chains. The number of use cases globally will rise exponentially. Of course, blockchain has already revolutionised the financial industry, with all types of digital assets, with blockchain-based transactions, with decentralised tools, with crypto, after all — and it’s all here to stay. Traditional finance will have to move or be digitised. Also, with the emergence of NFTs, I’m sure the art world will be somewhat disrupted and probably re-built.

What are the latest trends and developments in the Decentralised Finance platform?

DeFi has grown tremendously over the last few years: Total Value Locked (TVL) grew by 14 times in 2020 and has more than tripled in 2021. Traditional financial primitives also work in the DeFi space, where protocols mimic financial tools. What’s trending now is so-called GameFi, an intersection of DeFi and the gaming industry, where protocols let gamers transfer assets within games, earning a return on their game-based cryptocurrencies. DEXs, or decentralised exchanges, also fuel industry growth. On DEXs, crypto owners transact with each other directly, as opposed to centralised platforms.

Can you elaborate on the non-financial applications of blockchain?

The greatest disruption and improvement that blockchain brings to the table are seen in supply chains and logistics, in healthcare records, vaccine credentials, digital identity, land registry, agriculture, education certificates issuance, and voting. Use cases that impressed me the most recently are in launch pads, gambling, and NFTs. Even though there is a lot of hype in this segment, NFTs are not going away. We continue to evolve and live in a hybrid world, where new tech has a narrative that keeps on building upon old ones.

What were your key takeaways from the recently held Gulf Blockchain Week?

NexChange together with our partners Evolution Group and EcoX co-hosted Gulf Blockchain Week, and the event highlighted the culmination of the development of the Gulf region as a hub for the blockchain ecosystem, where a long-term strategic plan has been put into place. The event showcased and debated important topics such as crypto regulations, the investment landscape, supply chain management, blockchain case studies in real estate as it pertains to the Gulf, to name a few. The Gulf region, particularly Dubai, has been the main beneficiary for the way it has dealt with the pandemic. Most importantly, it allows innovative companies to get the message out to the public.

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