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How Does Bangladesh’s Blockchain Strategy Look Like?

April 25, 2022

With a booming economy, Bangladesh is set to become a middle-income country within a few years. To ensure easy access to governmental services, Bangladesh has converted the majority of its governmental services to online-based systems. The country still faces various challenges when it comes to continuing its tremendous growth while achieving its SDG[1] (Sustainable Development Goal) goals by 2030 and becoming a developed nation by 2041. Blockchain technology will play a significant role in meeting these challenges.

Blockchain technology is a decentralized, distributed ledger that records the provenance of a digital asset. The data on a blockchain is unable to be modified, which is crucial for industries related to payments, cybersecurity, and healthcare.[2]

Emergence of blockchain technology will create an opportunity where every possible service or status is verifiable by any authorized entities.

The government has mentioned a ten-year strategic roadmap, expressing its intention to identity infrastructure document verification, land expertise finance, food agriculture, health supply chain, and smart city judiciary. Blockchain technology will be implemented to provide different governmental services under the following ministries.

  • E-KYC (Electronic -Know Your Customer) and reputation system will be developed under the Ministry of Information.
  • A pension, payment, stock market, and subsidies system will be developed under the Ministry of Finance.
  • A mutation, registration, verification, and employment system will be developed under the Ministry of Land.
  • A welfare and remittance system shall be managed by the Ministry of Expatriates’ Welfare and Overseas Employment and the Ministry of Labor and Employment.
  • A procurement, disintermediation, agricultural insurance system shall be developed under the Ministry of Agriculture.
  • Consumer Protection, Ministry of Commerce; Ministry of Finance, VAT, Fraud Detection of Consumer Products system shall be developed under ministry of commerce.
  • A digital asset management, inter-bank settlement, trade finance, P2P lending, anti-money laundering, digital currency, and credit rating system shall be developed under the Ministry of Commerce and Ministry of Finance.
  • Digital evidence used by judiciary will be secured through a blockchain system, and the Ministry of Law and Justice will develop this system.

Government Certificate and educational certificate shall be preserved through blockchain technology.

Blockchain technology can help Bangladesh to build resilient infrastructure and establish e-governance where government is able to provide public services to citizens in a more user-friendly way. It is set to promote innovation, facilitate fair competition, reduce intermediaries, and ensure accountability and transparency.

The following are a few examples of how blockchain will help in providing various services in Bangladesh, on top of existing internet technology.

  1. VAT: Currently, in Bangladesh, VAT collection is ensured through a challan number in every transaction of a registered point only. However, there are several pitfalls and scope for manipulation exit in the payment of VAT. If a smart-contract supported blockchain system can be integrated with the VAT collection system, VAT can be automatically calculated, collected, and recorded without any human intervention. This will reduce manipulation and ensure the timely collection of VAT during each sale of a product.[3]
  2. Mutation of land[4]: In Bangladesh, property documents can be easily counterfeit and manipulated by malicious actors. Blockchain technology can play a key role in safeguarding against such unauthorized manipulation, because of its immutability and transparency properties. The introduction of a blockchain-based system can thus enhance trust in the trade of property in Bangladesh.[5]
  3. Land registration: In Bangladesh, land registration refers to the transfer of land ownership, which has been done by the office of the sub-registrar, in a manual system. Large amounts of paperwork and time are required in the registration process, in addition to fraudulent and counterfeit documents that can be produced. In Blockchain technology, with its digital signature, land registration can be highly secured, faster, smoother, and done without human intervention.
  4. Securing digital evidence: Blockchain technology can be used to secure digital evidence. For example, CCTV footage, mobile phone data, internet usage data, and important files retrieved from the seized computes all represent important evidence which can be used as evidence in many countries in the world. However, digital evidence can be manipulated easily; as such, the authenticity and integrity of such evidence is often questioned. Blockchain technology can be an effective tool to mitigate this situation. Currently, in Bangladesh, digital evidence has limited opportunities to be used as evidence for judiciary purposes. However, with the increasing usage of computers, mobile phones, and the Internet, such evidence will be crucial in Bangladesh. A blockchain-based solution will present many ways to verify and secure digital evidence.
  5. Document verification: Various government certificates and educational certificates can be easily accessed and verified.
  6. Smart infrastructure: In a smart city, all the resources are integrated using information technology to ensure effective and efficient use of the resources. With the help of emerging technology, i.e., IoT, cloud computing, machine learning, a real-time direct benefit can be provided by the government to citizens. Blockchain technology can add more value by integrating all technologies.
  7. Citizen services: Such services can issue an e-ID for identity verification for citizens, which in turn can be used for e-voting systems, recording and sharing medical information, property management, the use of crowdfunding platforms, etc.

Therefore, for future smart-cities of Bangladesh, blockchain technology can help to unlock the above advantages for its citizens.

The blockchain strategy is aimed at helping the country to adopt new, trending technology and providing convenient, secure, and sustainable services to the people of Bangladesh.

[1] https://www.undp.org/sustainable-development-goals

[2]  Note- [A simple analogy for understanding blockchain technology is a Google Doc. When we create a document and share it with a group of people, the document is distributed instead of copied or transferred. This creates a decentralized distribution chain that gives everyone access to the document at the same time. No one is locked out awaiting changes from another party, while all modifications to the doc are being recorded in real-time, making changes completely transparent. Of course, blockchain is more complicated than a Google Doc. For more info please visit- https://builtin.com/blockchain]

[3] 4.6, page 22, of the National Blockchain strategy Bangladesh.

[4] Note- In Bangladesh after transfer of ownership of property, the new owners name needs to record with the land department, which is know as Mutation or Mutation of land.

[5] 4.3, page 22, of the National Blockchain strategy Bangladesh.