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Blockchain can bridge financial system infrastructure gap –US-based don

Nigerian-born scholar at Westcliff University College of Business, California, United States, Dr Malik Abdullahi, speaks to DEBORAH DAN-AWOH on how Nigeria can maximise blockchain technology and stamp duty for economic growth

Recently there were concerns about the accuracy of stamp duties in the country. What are your thoughts about this?

The allegations could be true. The financial institutions have the means or capabilities to independently manipulate the figures and the government cannot determine the extent of the manipulation. In fact, any government efforts to recover through third-party auditing may not yield a credible result and will bring an additional financial burden on the government. I will explain further how the FI is able to perpetrate such an unethical behavior

Blockchain is still a novel tech in the country, could you help us better understand it?

Blockchain is not a new technology. BCT is an amalgamation of many old individual technologies. For example, cryptography is part of BCT technology and cryptography is a very old technology and the rest of the constituent technologies. What happened is that scientists were able to select and combine specific individual technologies to create a single tech that embodies the combined properties in one technology. Those individual technologies come with special features that can create value in terms of security, efficiency, and trust, among others.  From here, everyone is now trying to build out used cases from the tech given its natural features.

What role do you think it will eventually play in the country’s financial system?

BCT is the hope for anticorruption campaigns. In fact, BCT is divine and it is for the purpose of corrupt nations. BCT will play a very big role in the financial industry. With BCT, banks will not need to invest heavily on infrastructure as they are currently doing. BCT will also benefit the people as it will reduce drastically the transaction cost through the disintermediation of the banks and their charges. BCT will benefit the government as it will help protect the government’s income through the removal of corruption

During the recent cash scarcity, many individuals argued that the inadequacy of the country’s banking infrastructure was setting the stage for blockchain. Do you agree with this position?

The scarcity of cash was not an infrastructural problem but a man-made problem. However, adoption of BCT is a must and it is the future.

How can blockchain be implemented for stamp duty collection?

The current banking system is inherently built with some capabilities not intended for unethical activities but can be used or used to manipulate records to the advantage of the financial institutions.  Those system’s weaknesses can be corrected with the implementation of blockchain technology. This is where I come in. Blockchain can be implemented to temper proof the stamp duty transactional records and produce accurate reportage of the revenue generated by financial institutions. To temper proof the records, there will be the need to integrate BCT with the current database system of the bank. The integration of BCT with the current banking system will introduce BCT’s special features that resolve every possible leakage.

What role do you think blockchain will play in simplifying payments for SMEs?

BCT is peer-to-peer. As such, it will eliminate the need for the bank with all the accompanying charges. However, the banks will have to find a new role and a new way to make money.

With its large crypto market, why do you think no local cryptocurrency has successfully been launched in Nigeria?

It is not safe for lack of regulations or regulatory frameworks/institutions to govern the crypto market.

The crypto market has had to deal with many failures in recent times. How do you think this will affect the future of the ecosystem?

Well, people have seen the weaknesses & benefits of the crypto market. So the failures and successes will inform investors & stakeholders about future direction and models.

Is it time for Nigeria to regulate cryptocurrencies?

Oh yes. We don’t have to wait for mature adoption of crypto to begin to formulate policies to govern the market.

You recently wrote a paper to the Nigerian Government about implementing blockchain technology to control stamp duty collection. What other part of governance can blockchain help simplify?

BCT can be used in many areas. You can think of corruption and security. BCT is a trusted technology that is expected to replace human intervention in government processes and activities. The application of BCT is endless.

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