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BY: Brenton Naicker
It’s been a buzzword for government and industry in recent years, but the hype surrounding the fourth industrial revolution (4IR) is far from over. As the country eagerly awaits Finance Minister Tito Mboweni’s budget speech for 2021/22 later today, blockchain actors will hear the minister’s statements on cryptocurrency regulations, investments in blockchain technologies and the government’s plans to 4IR- Using technology for social purposes is a good observation.
Since Mboweni first announced in last year’s budget speech that “South Africa is making headway with the fourth industrial revolution”, there has been increased attention to how the government is planning and creating incentives for the introduction of 4IR technologies such as artificial intelligence (AI) and in particular blockchain in their transformation models – technologies that have enormous potential both to drive inclusive growth and to address social and economic challenges in South Africa.
In recent years, Binance has taken a consolidated approach to harnessing blockchain technologies for greater societal good – through incubator structures for startups, educational institutions and charities. and the recent launch of a $ 100 million global accelerator fund for blockchain developers. All of this to unlock the potential of blockchain in the developing world and turn some of the continent’s greatest challenges into triumphs.
And it’s a model that can also be emulated in South Africa. At the center of this narrative is the need for government and industry to work together to get the most out of blockchain – by unlocking its technological potential as a powerful tool for change. Blockchain is redefining business processes, has the ability to provide solutions to problems we never thought possible, and while we’ve already seen some brilliant forward-thinking about government rhetoric – the blockchain is explicit in their existing 4IR strategy dictating is one of the pillars of economic growth – more follow-up is needed on this.
The economic devastation caused by the Covid-19 pandemic on the country’s financial health last year cannot be ignored, and it will be interesting to see how the Treasury Department plans to mitigate the effects of such advancement – and do so with a forward-thinking, out-of-the-box approach to accessing existing technology like blockchain to do this.
Another focus of the Minister’s speech today will be the search for further regulatory clarity in the digital asset industry. Recently, the government has managed to create a favorable environment for compliance and innovation in the fields of crypto-assets, fintech and blockchain. Mboweni previously spoke of developing a coherent government response to cryptocurrencies and a unified intergovernmental legal framework.
In this way, businesses can use blockchain technology to enable efficiency and access to available capital to get results. And it will enable Binance and others like us as a platform to expand the reach of blockchain and the efficiency it can deliver on-premise. Without this regulatory clarity, it will be difficult to deploy certain business models and concepts and take full advantage of the technology – a technology that could potentially enable us to alleviate some of the economic problems that will result from COVID-19. While South African regulators have thought ahead and relied on global best practices to be proactive rather than responding to regulation of the sector, they have been cautious on this issue.
South Africa still has a long way to go to prepare effectively for the inevitable 4IR wave. However, this can be achieved by implementing a multifaceted and multidisciplinary approach. Commitments to the private sector, and in particular the digital assets industry, are needed to inform change and achieve wider adoption of blockchain technologies. The Treasury Secretary and other policy makers just need to look at the best practice approaches that crypto organizations have implemented over the years to leverage blockchain technology to see the tremendous potential they hold. If not now, Minister, then when?
Brenton Naicker is the Business Development Manager for Binance South Africa.