The Lao government plans to use blockchain to digitize the financial system
Laos is preparing for the widespread use of blockchain technology in the payment industry, with digitization as the main goal.
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’ burgeoning Web3 space and payment industry stakeholders.
Blockchain 4.0 is revolutionizing #Laos. It drives financial inclusion, promotes transparency and increases security in transactions. Smart contracts and decentralized finance open up new avenues for growth. Truly a game-changer for the nation’s economy. #MetaBankLaos… pic.twitter.com/oyaAKzFNjk
— MetaBank (@MetaBankSG) 27 May 2023
Singaporean software firm MetaBank revealed in its report that the conference centered on the Lao government’s desire to revolutionize the existing infrastructure of the financial industry using blockchain. Dubbed “Blockchain 4.0”, the government prioritizes industry cooperation, a healthy business environment and concise rules to achieve its goal.
“Blockchain 4.0 is revolutionizing #Laos. It drives financial inclusion, promotes transparency and increases security in transactions. Smart contracts and decentralized finance open new avenues for growth. Truly a game changer for the nation’s economy.” MetaBank’s tweet read.
The government says its medium-term goal is to boost foreign exchange reserves and curb rampant inflation by leaning on the blockchain. In the short term, Laos is concerned with improving its citizens’ living standards 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 into 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 drawn praise from several quarters, with pundits noting that the move is in line with Laos’ five-year national socio-economic development plan. The five-year plan, which runs from 2021-2025, is an attempt by the government to bring the country’s economy in line with some of the region’s powerhouses such as Hong Kong and China.
Not the first rodeo with blockchain
Laos turned its sights on blockchain in early 2023 after the central bank tapped a Japanese software firm to help create a central bank digital currency (CBDC). The proposed digital version of Laos’ currency aims to improve money transfers, and bears striking similarities to Cambodia’s Bakong system.
“The CBDC is a way to promote the sophistication of payment systems, as well as ensure financial security through a local currency that is not dependent on other countries,” the central bank said in an explanatory video at the time.
Digital currency adoption in the country is rising to new heights following the government’s green light for mining and trading activities in the sector.
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