Blockchain technology mandatory for banking care.

Byline: AMIR MUSTAFA - HURMAIN ARIF

The emerging modern blockchain technology is distributed ledger technology which has a great future in Pakistan to revolutionize the industries, services and banking sector. Both the State Bank of Pakistan and commercial banks can deploy it to enhance the efficiency, safety and security, hence ultimately transparency of the banking transactions. So far various sectors are reluctant to adopt it, but the rest of the world has posed numeral models which helped the banking sector for advancement. In the country, the banking sector is regularly addressing many problems which include:

* Lack of financial inclusion: A number of masses have limited access to formal banking services. Whereas, blockchain can be deployed to enhance banking and financial inclusion by facilitating people to open bank accounts, and access financial services and other banking services via mobile apps.

* Fraud and corruption: Financial sector and banks are much defenseless to ever-increasing fraud cases, originating locally and abroad. The blockchain has proved itself an improved security mechanism in banking transactions and has made it much more challenging to commit fraud.

* High cost of currency transmission: Currency transmission is a core source of foreign exchange for the country, but the cost of transferring remittances is very high and problematic. The blockchain is deployed to reduce the cost of currency transmission by modernizing the procedures more efficiently.

Blockchain technology in Pakistan can be deployed to address the underlined challenges and improve the financial and banking sector. Many stakeholders in Pakistan wondering about blockchain implications regarding its future, safety, and government regulations. Some of the core patterns of blockchain can be used in the financial and banking sectors of Pakistan:

* Trade financing: the blockchain is used to frame trade financing procedures. It could assist the business community to trade merchandise and services, in this presence, blockchain lessens the risks, of fraud and bankruptcies.

* State Bank digital currency: The State Bank of Pakistan (SBP) is currently exploring ways to use this modern tool for a central bank digital currency (CBDC); the CBDC is a digital modern version of the fiat currencies which are launched by the central banks.

* Transmissions and remittances: the blockchain can also be deployed to generate a safe and secure and transparent platform for...