Initiated by tech startup HARA, in partnership with the Creative Economy Agency (Bekraf), the Indonesian Chamber of Commerce and Industry (Kadin) and the Indonesian Blockchain Association, the hub serves as the first-ever learning center to facilitate further development of and research on blockchain adoption in the country.

Highlighting the equitable nature of the blockchain network itself, Indonesia Blockchain Hub will be open to the public and industry players alike, according to HARA CEO Regi Wahyu. Once fully operational, Indonesia Creative Hub will host regular meetups and sharing sessions among industry players, formal blockchain training for the public and members of the press, as well as offer coworking spaces for blockchain developers.

“The hub was founded on the belief that blockchain sustainability depends on the success of not just a single player in the sector, but rather on the accomplishment of every party that has contributed to the development of the decentralized network,” Regi said during a press conference in South Jakarta.

HARA — a company focused on blockchain-based solutions to agricultural issues such as land ownership — has been adopted by 5,000 smallholder farmers in 110 villages in Indonesia, he added.

Through the blockchain network, farmers have access to verifiable land registration whose data are stored as “land polygons”. To date, there are 3,443 land polygons recorded on HARA’s blockchain. Other agricultural services offered by the company include transparent cultivation and crop data.

“We also cooperated with [state-owned lender] Bank Negara Indonesia [BNI] during the first phase of our operation in East Java to assist farmers in securing microfinance loans,” Regi said, adding that HARA had helped secure 270 microloans for smallholders in Situbondo and Bojonegoro regencies.

Blockchain — a data network consisting of “ledgers” shared among multiple computers and users without a centralized intermediary such as the conventional bank — offered the right antidote to the data-deprived society in Indonesia, said former finance minister Chatib Basri.

“The decentralized system promises data democratization where all information of interest will be readily available to those who need it,” Chatib said, while recalling examples where data availability was crucial to drafting the state budget during his term as the finance minister from 2013 to 2014.

An egalitarian approach to databases such as the blockchain mechanism will prove to be useful in the contemporary corporate landscape where some public data is still owned and controlled by a select few in the private sector, according to Kadin international trade chairman Yos Ginting.

“Blockchain represents an unprecedented development in the history of technology. Like the dot-com boom over a decade ago, blockchain is poised to be the next big thing that everyone will count on,” said Yos, who also currently serves as a member of the Indonesian Blockchain Association supervisory board.

Data availability as offered by blockchain would accelerate the development of financial technology (fintech) in Indonesia, Regi said. Fintech services will become more personalized and efficient with transparent access to users’ data, he added.

However, talks regarding the mass adoption of blockchain — particularly its integration with the fintech industry — are likely to meet regulatory stumbling blocks.

The Financial Services Authority (OJK) has finalized a new set of regulations expected to be issued and implemented later this month, which would regulate fintech such as peer-to-peer (P2P) lending and equity crowdfunding platforms. The new regulations — which serve as an update to an existing 2016 decree on P2P lending — comprise innovation review, regulatory sandbox and public trials, according to OJK deputy commissioner Nurhaida earlier this month.

Blockchain is still unregulated in Indonesia despite the growing number of blockchain companies such as HARA, PundiX, Tokenomy and Indodax.

Safety concerns hang over mainstream adoption of blockchain since it was originally conceived as a data network for transactions using cryptocurrencies such as bitcoin. A 2017 joint study by the University of Sydney Business School and University of Technology Sydney found that one-quarter of bitcoin users and one-half of bitcoin transactions — worth around US$72 billion — are associated with illegal activity. (rfa)

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