By introducing the Blockchain technology, and the eventual use of Bitcoins, could help to improve the problem of critical imbalance in the unbanked masses mostly in the rural outback.
The Government and Bank of Papua New Guinea hope to develop a fully integrated financial and identification system at the rural level with the application of the new blockchain internet technology.
And they have chosen the remote Finschaffen district in Morobe province to be a “special economic zone” to trial it.
An understanding was inked by the Deputy Prime Minister and Treasurer Charles Abel and blockchain consortium representative Shane Ninai in Port Moresby last week.
Mr Abel said the government is being creative and innovative in trying to respond to things happening globally and at the same time want to create opportunities for remote and rural districts where the bulk of the population live.
“We want to create a conducive environment to enable and foster the exhilaration of the development of this technology and possible application globally but also for a country like ours where we have people living in remote and rural locations to have access to financial services through the internet,” he said.
“Essentially we are signing a general understanding to bring the parties together at no cost to the government apart from some contribution from Finschaffen district services improvement grant.
“At the cost primarily to the investor they will come in and do a feasibility study.”
Blockchain is a digital technology platform used to record transactions, confirm identity and establish contracts and can be invaluable to the unique PNG setting.
Since last year, BPNG has been exploring the practical applications extended by the new technology to the challenges in PNG that has been frustrating banking efforts made over the years.
Bank Governor Loi Bakani said he hoped by introducing the blockchain technology, and the eventual use of Bitcoins, could help to improve the problem of critical imbalance in the unbanked masses, mostly in the rural outback as opposed to urban and peri-urban localities.
Last year the central bank signed a MOU with the Australian Government-funded PNG governance facility, managed by Abt Associates with an initial funding assistance of K49,897.78 ($20,000).
At the time, Mr Bakani said there is a lot of interest in the Bank Blockchain initiative and is in talks with the World Bank, IFC, other international organisations and the private sector to join the collaboration.