May Blockchain Revive the Banking Sector in Sudan?

Since the struggle in Sudan broke out on 15 April 2023, many sectors had been severely broken ensuing within the paralysis of many features of the every day lives of Sudanese individuals and international residents in Sudan. The banking sector is without doubt one of the worst hit sectors in Sudan, and that’s the reason new options such because the blockchain know-how must be launched to the business.

Blockchain is a digital ledger that facilitates the process of recording transactions and tracking assets in a business network. Virtually anything of value can be tracked and traded on a blockchain network, which is believed to reduce risk and cut costs for all involved.

Currently, all banks in Sudan besides the Bank of Khartoum seised every kind of operations. What differentiates digital banking companies and cellular cash purposes (apps) similar to Bankak by the Bank of Khartoum from different native cellular cash apps is that their servers and IT infrastructure had been unbiased and don’t depend on the Electronic Banking Services firm. Electronic Banking Services firm is the nationwide firm that’s liable for regulating digital banking companies in Sudan and supply obligatory IT infrastructure for the banks that aren’t capable of have their very own unbiased IT infrastructure. Unfortunately, the Electronic Banking Services firm was hit in Khartoum throughout the present armed battle between the Sudanese Armed Forces and Rapid Support Forces (RSF), which introduced down many of the banks in Sudan. Of course, there are some banks which have their very own IT infrastructure; nevertheless, they weren’t as strong and succesful because the Bank of Khartoum.

As for normal face-to-face banking companies, there are people who find themselves presently unable to open new financial institution accounts. The solely companies presently accessible are withdrawal, deposit of money and international transfers.

Current cellular cash apps in Sudan are regionally developed and solely Sudanese kilos can be utilized in transactions.

On the opposite hand, Bankak offered a brand new service that converts Sudan kilos to foreign currency echange and makes use of foreign currency echange when conducting transactions. However, Bankak remains to be a neighborhood cellular cash app that doesn’t have the options offered by worldwide cellular cash apps similar to Paypal. For an individual to make use of the characteristic of utilizing foreign currency echange within the Bankak app, he/she has to have a checking account within the Bank of Khartoum. Using an e mail just isn’t adequate to entry the service. International cellular cash apps similar to Paypal, Payoneer and Wise are presently nonetheless unavailable in Sudan.

This downside within the freezing of operations within the digital banking companies was primarily as a result of thought of centralising all operations, IT infrastructure and different features in Khartoum. 

The blockchain know-how can resolve lots of the issues in Sudan’s banking sector as a result of it supplies a really highly effective various to this idea of centralisation as blockchains are primarily decentralised methods that by no means depend on a single gadget or web site of servers in the identical location. Moreover, blockchain supplies many different wonderful options similar to safety, privateness and sooner cash transfers. Blockchain mitigates the chance of the entire malfunction of banking companies in Sudan.

The Saudi Central Bank introduced a blockchain technology, Saudi Arabian Monetary Authority (SAMA),  which allowed for normal financial institution transfers between Saudi banks to be carried out in the identical day if not the identical hour or second as an alternative of ready for 4 to seven enterprise days for the cash switch to be carried out and have extra environment friendly and safe cash transfers in native cellular cash apps, transparency, removing of mediators and discount of transaction prices.

Al-Rajhi Bank, the largest Islamic Bank in the globe, also adopted the blockchain technology for its operations of their branches in Saudi Arabia and Jordan.

You also can be taught extra in regards to the makes use of of blockchain in Gulf States in a paper known as Blackchain Adoption in the Gulf States by Fatima AlSubaei. You also can learn this paper known as as The Role and Potential of Blockchain Technology in Islamic

Finance printed at Qatar University (QU) about use of blockchain in Islamic finance.

When relying on cryptocurrency, there is just one nation that adopted this idea to its full extent, which is El Salvador, and didn’t carry an awesome tangible optimistic affect. The nationwide foreign money of El Salvador itself is weak. Thus, it adopted using Bitcoin.

Moreover, Sudan lately banned using cryptocurrency. It is perhaps good to rethink this determination and permit the common banking sector and the cryptocurrencies to coexist as this may increase extra financial freedom in Sudan and permit extra choices to be accessible like within the UAE or South Korea that allowed each common nationwide currencies and cryptocurrencies to be each accessible and usable.

The blockchain know-how can be utilized in lots of different sectors and features of life. In addition, even in monetary know-how (fintech), blockchain may be utilised to help and enhance current common recognized banking methods with out tampering the economic system or the recognized currencies.

The livelihood of many Sudanese individuals nonetheless suffers from paralysis attributable to struggle. The banking sector, which is without doubt one of the most vital sectors in a rustic, was tremendously broken. Therefore, blockchain know-how must be severely thought-about by determination makers.

Ahmed El-Affendi is a nomadic, coffeeholic and foodie information journalist, and information scientist who graduated from the University of Khartoum with a bachelor’s diploma in IT. He is all the time studying books, exploring new cultures and studying new languages. He can also be concerned with social media analytics, cinematics, entrepreneurship, digital transformation, and digitisation. Find him on Twitter @affendi_xiii, Facebook @affendi_xiii, and tasks on Linktree.

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