Blockchain a key player in digital era

At the Vietnam Blockchain Summit on October 19, which saw the participation of 150 foreign delegates from more than 30 economies around the world, Truong Gia Binh, chairman of FPT Corporation, said blockchain has outstanding characteristics and qualities of anti-forgery, transparency, and decentralisation.

“These are extremely favourable conditions for the creation of digital twins in the era of comprehensive digital transformation,” Binh said. “The world will save $450 billion annually from counterfeiting and reduce hundreds of thousands of deaths from counterfeit drugs when blockchain is applied in these areas.”

Blockchain is making breakthroughs across many industries. Countries such as UAE, Estonia, Luxembourg, and Switzerland have applied blockchain to population management and storage of digital identities. Meanwhile, large tech companies such as IBM, Amazon, and McKinsey are applying blockchain in supply chain management.

Elsewhere, at the Ho Chi Minh City Innovation and Digital Transformation Week in Ho Chi Minh City last week, discussions were focused on applying new technologies, including blockchain, to speed up the process of digitalisation.

In recent years, Ho Chi Minh City has offered up guidelines and policies to invest in and promote the strong development of science and technology, innovation, and digital transformation. According to Tech in Asia’s analysis, Ho Chi Minh City jumped 21 spots in the most dynamic innovation startup ecosystems globally at 179th place in 2021. The city was also the first locality in the country to announce a programme on digital transformation along with a project to build a smart city by 2030.

Since its application in cryptocurrency was introduced over a decade ago, blockchain technology has increasingly gained more attention and widely applied in many different industries, especially in the field of banking and finance. Blockchain allows banks to perform various transactions simultaneously on the same network of many banks instead of doing it on multiple systems. This not only ensures information transparency among stakeholders, but also results in processing times for letters of credit dropping from five days to less than 12 hours, contributing to cost savings for the entire process. Many large banks in Vietnam are also successfully applying blockchain technology in the credit system.

Currently, blockchain is also being studied and applied in public administration fields such as authentication, identifiers, diplomas, and certificates. Over the years, the Vietnamese government has tried to create opportunities for the development of new technologies to serve the national digital transformation. In 2020, the prime minister enacted Decision No.2117/QD-TTg on a list of technologies prioritised for research, development, and application for the country’s proactive participation in the Fourth Industrial Revolution, including blockchain technology.

And Decision No.942/QD-TTg dated June 2021 on approving strategy for development of e-government towards digital government for 2021 - 2025 outlined how the State Bank of Vietnam was assigned to research the pilot use of virtual money based on blockchain technology until 2023. The government also has supportive policies for innovative startups, especially in AI, blockchain, and VR/AR.

According to vice chairman of the Vietnam Blockchain Association Phan Duc Trung, the biggest challenge of the digital transformation process is data digitalisation, and blockchain can solve that challenge.

“Blockchain is being evaluated by experts as the standard for digital transactions. Instead of being centrally stored, a blockchain is a multi-tier database stored in a network where each user has a non-replicable copy of the database,” Trung shared.

Nguyen Van Khoa, chairman of the Vietnam Software and IT Services Association, said that Vietnam has a great opportunity to promote the internet economy, especially digital transformation platforms. “It is necessary to continue to invest, research, and apply new technologies in digital transformation such as AI, machine learning, metaverse, and blockchain,” Khoa said.

Despite many advantages of transparency and clarity, blockchain technology has long been considered a controversial technology when it comes to cryptocurrency projects that have not been recognised by law.

Huy Nguyen, co-founder and CEO of blockchain platform Karrdiachain, acknowledged that many people still have a negative view of blockchain technology, but it should not only be judged on the negative side. “It is true that there are risks and it is necessary to overcome legal issues and to popularise technology, but at the same time, we must see it as an opportunity for development,” he said.

The Vietnam Blockchain Association will open a series of discussions about the potential of blockchain technology from leading experts in the field, shedding light on legal policy issues, opportunities, and potential risks surrounding blockchain applications at the Vietnam Blockchain Summit 2022.

The Vietnam Blockchain Association (VBA) signed a strategic cooperation agreement to promote extensive research with Chainalysis, a New York-based blockchain analytics company, at the opening ceremony of the Vietnam Blockchain Summit, held for the first time on October 19.

Blockchain technology is expected to help Vietnam's finance and banking sector deliver a better customer experience and help traditional banking institutions compete with fintech startups.