It seems that bitcoin, and the blockchain technology in general, will be one of the priorities on next the Group of Twenty (G20) summit’s agenda, which is expected to be held in Hamburg, Germany next July. Along the communiqué, which outlined the priorities of the upcoming G20 summit, the Presidency of the summit stated that the popularization of digital technologies in various business and social aspects mandates discussion to formulate an internationally applicable regulatory framework, and promised that the G20 will address this task, in view of its role to seize opportunities offered by technological innovations for global economic growth.
Blockchain based platforms are already being implemented to replace conventional single point financial systems with fully decentralized market structures. The amazing thing about the blockchain is that it is expanding financial inclusion to the world’s unbanked citizens. Generally speaking, blockchains are increasingly becoming the building block of the “New Industrial Revolution”, which is also known as Industry 4.0, and introduce identity management, digital scarcity and provenance tracking into global supply chain management, across frameworks that enable real time trading and settlement of tangible, as well as intangible assets across secure decentralized network.
On the other hand, blockchains are associated with risks that can influence the global economy, via bypassing or displacing some of the third parties, or intermediaries, that governments rely on to deploy essential regulatory safeguards. A lot of research is still needed to accommodate safeguards including the Financial Action Task Force rules, Basel provisions that promote the stability of the financial system, anti-money laundering AML policies, anti-terrorism financing policies…etc, to an economy powered by the blockchain technology.
What Can the G20 Do To Help The World’s Citizens Benefit from Merits of the Blockchain Technology?
The blockchain technology holds the key to revolutionizing a global digital economy framework that is inherently secure and transparently reliable to all of the world’s citizens. At this critical point in history, when the world’s governments are struggling to restore faith in cross border economic collaboration, the blockchain technology can play a pivotal role in improving economic resilience in a manner that ensures that the world’s economy is working to the benefit of everyone.
The G20 has to work towards harnessing the amazing opportunities, while also minimizing the risks that are associated with implementation of blockchain based systems, during this critical incubative period of development of this technology. As such, the G20 can help mitigate two critical geopolitical challenges:
1. The rise of skepticism of the world’s citizens towards cross border trading and open markets, along with distrust in the current backbones of the world’s financial system.
2. Further fragmentation of the world’s economic order which is catalyzed by an up-rise of anti-globalization sentiments.
Blockchains can solve both challenges. Shifting away from an economic order that is centered around huge intermediaries, such as financial institutions, BAWT, GAFA type companies (Baidu, Alibaba, Weibo, Tencent, and Google, Amazon, Facebook and Apple respectively), or even government bodies, is definitely going to increase the public’s trust in the world’s economy. The blockchain is designed to empower a decentralized, democratic system that encourages the public to participate in the global economy through innate transparency, inclusiveness and accountability.
The G20 has to take decisive moves towards harnessing the blockchain technology in service of the group’s policy goals across areas of financial inclusion, economic resilience , trading, taxation, investment, health, climate, woman’s empowerment and sustainable development. Failure to embrace the blockchain technology risks further fragmentation of an already suffering global economy, undermining the public’s faith in the global economic system and shifting the most innovative blockchain innovations into the Dark Web, which is generally beyond the control of governments.
Via acting now to embrace the unmatchable properties of the blockchain technology, while also minimizing its potential risks, the governments of the G20 can build the foundation for a fair, prosperous and inclusive global economy.