ISLAMABAD: Pakistan has adopted for the first time the blockchain technology in the banking sector to attract foreign remittances from Malaysia and to counter the illegal Hawala and Hundi system at the international level.
The technology will not only make financial transactions instant and secure, but will also document each and every step taken by the sender and receiver of remittances. The step is in the direction defined by the Financial Action Task Force (FATF) to combat terror financing and money laundering.
Addressing the launching ceremony of the service in Islamabad, State Bank of Pakistan (SBP) Governor Tariq Bajwa said the blockchain remittance service would complement efforts made by the government and central bank to promote the transfer of home remittances using formal financial channels.
He said home remittances contributed to over 6 per cent of the GDP and thus hold key position in economic uplift of the country.
The blockchain remittance service has been introduced by Telenor Microfinance Bank in partnership with a financial technology company of Malaysia named Valyou.
A block chain is a list of records containing time stamps and transaction data that are linked and secured by using cryptography and are impossible to be hacked or modified.
The service will enable Pakistani residents in Malaysia to send money home instantly and securely using Valyou-Telenor’s remittance service provider.
The launch of the service marks a major milestone in Pakistan’s journey to promote financial inclusion and boost the speed and efficiency of remittances from Malaysia to Pakistan.
