Two weeks ago, delegates of the Papua New Guinean government visited Stanford to assemble and hold preliminary meetings with an advisory board of University faculty members and Silicon Valley entrepreneurs. Deputy Prime Minister and Treasurer Charles Abel, Central Bank Governor Loi Bakani and Assistant Speaker of Parliament Rainbo Paita of Papua New Guinea came to discuss implementing blockchain at a national level to boost the country’s development.
Blockchain is a networking database that can serve as the base for complex and secure activities such as cryptocurrency transfer, banking and maintenance of sensitive data registries. With blockchain, financial firms are able to maintain an immutable record of digital events, forming the basis of an infrastructure where secure transactions can be made.
The country plans to officially launch this initiative come January 2018. The collaboration between the public and technical sectors is an opportunity not only for Papua New Guinea, but also for entrepreneurs and researchers interested in implementing blockchain technology on a larger scale amid the new policy challenges that it poses.
In Papua New Guinea, the recent round of Parliament elections means that holistic five-year proposals detailing the specific policy goals of each of the elected members will be due at the beginning of next year. Several of these plans are slated to include blockchain, making Papua New Guinea among the first nations to consider this technology at a national level. The government is even considering setting aside one more of the islands in its territory as a special economic zone, hoping to attract unprecedented development in complex networking by allowing the region extensive decision-making freedom.
Technical barriers to blockchain implementation in Papua New Guinea primarily concern network connectivity in a largely remote and undeveloped island. Ernestine Fu, Stanford lecturer and inaugural member of the advisory group, commented that “regulation is one of the biggest hurdles for blockchain right now.” Several details surrounding the regulation of blockchain activity are uncertain largely because no significant precedent exists in the way of implementing blockchain in a formal setting.
A major component of blockchain involves secure currency transfer and monetary activities that take place largely outside of the sphere of traditional banks.
“A country like Papua New Guinea, where the banking infrastructure is not as developed as somewhere like the U.S., provides a lot of opportunity for blockchain, especially since every single individual is not fully set up with as extensive of a financial banking solution as in the U.S.,” Fu explained. Blockchain also has enormous potential for managing government registries such as records of mining, forestry, oil and gas leases to both domestic and international corporations.
Fu is not the only faculty member intricately involved in the advisory board. David Mazières is a professor of computer science at Stanford and chief scientist of the Stellar Development Foundation, which invented Stellar, a blockchain-based open platform for secure money transfer. According to Mazières, the technical problems related to implementing blockchain in Papua New Guinea raises are perfect opportunities for advancing research on the subject.
“I’m eager to serve both because it seems like an opportunity for impact, and because it is a good source of research inspiration,” Mazières said.
The push to implement blockchain is largely driven by the Papua New Guinea Parliament, Day One Investments, a blockchain venture capital fund, industrial leaders in blockchain and The Asia Foundation, a nonprofit which works to promote sustainable growth in developing countries such as Papua New Guinea.
“This blockchain trend is something that we must position ourselves for,” said Assistant Speaker of Parliament Rainbo Paita. “I am here in Silicon Valley to learn and express support for this initiative.”