Indonesia Counts on Blockchain to Help Tackle Data Challenges


The push for blockchain to go mainstream is associated with the numerous benefits the technology brings to the table. One of such areas blockchain tech is poised to transform is data management and record keeping. We are in the information age, and now more than ever, systems capable of identifying, retrieving, validating, and accurately storing data are in high demand. As an emerging market with a population of 250 million people, Indonesia has struggled to carry out efficient data management and credible record keeping due to unavailable resources and lack of expertise.

The digital configuration that is incorporated into the blockchain allows information records to be shared and updated by a network of computers in a decentralized system as opposed to the status quo centralized method of storing information. Indonesia is looking to take advantage of this and is currently exploring blockchain applications in different areas.

One of the sectors that the country is looking to deploy blockchain is tax system. Nowadays, it is quite difficult to determine if an individual has paid his/her tax dues and there is also the problem of painstaking paperwork associated with keeping a tax registry. Online Pajak, an Indonesian tech firm has come up with a solution in the form of a blockchain-based app which allows its users to share their tax data with concerned bodies such as commercial banks, the national central bank, and tax and treasury offices.

At a briefing for the product launch, Online Pajak founder, Charles Guinot  highlighted the problem with the traditional tax system: “Today in Indonesia, there’s no proof you’ve paid.”

Online Pajak’s solution would bring transparency, mitigate the chance of errors, decrease the time spent on verification, and significantly reduce paperwork.

Indonesia blockchain endeavors also include an initiative to increase the public trust in the voting process. The present electoral systems are untrustworthy and leave room for errors and data manipulation. If blockchain verification techniques could be deployed here, it would facilitate the organization of more efficient and credible elections.

An Australian firm, Horizon State has seen the potential in this area and is working on a blockchain based phone app slated to launch in July on the Indonesian island of Sumatra. This app will allow residents of the island to vote on different local policies.  Horizon State co-founder, Nimo Naamani believes that their system will use blockchain to help end voter fraud and give a voice to Indonesians scattered around remote islands with little access to basic amenities.

Indonesia blockchain exploration isn’t merely relegated to tax and elections; it turns out that Indonesian banks want a piece of the decentralized pie too. The country’s second biggest bank, Bank Mandiri, has stated that it is looking to employ blockchain innovations to help facilitate trade financing. However, the company says it is waiting to get proper guidelines from regulators before proceeding.

Speaking of the regulators, The Financial Service Authority already has its eyes on the blockchain. It has delegated a special team of experts to study blockchain technology and the contributions it could make to the financial sector.

Pandu Sastrowardoyo, co-founder of Bali-based blockchain consulting firm Blockchain Zoo has stated that a number of Indonesian banks are looking to blockchain to help tackle fraud and improve connectivity of ATMs by utilizing decentralized nodes. There are even reports that Bank Indonesia, Indonesia’s central bank, is exploring the possibility of creating a digital version of their local currency Rupiah, which would be backed by the government. The central bank did not deny the reports but cautioned that they wouldn’t be releasing a state-backed cryptocurrency anytime soon.

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Due to its transparent attribute, blockchain technology is getting a lot of attention from Indonesian policymakers to help tackle graft and other corrupt practice issues associated with policy programs. Presently, the government is trying to use blockchain to facilitate the validation of subsidy payments for micro-loans and other empowerment programs. The Minister of Finance, Sri Mulyani, was excited about using blockchain technology to bring transparency to government activities and even suggested that more blockchain innovations in this sector could be in the works.

Indonesia blockchain appetite doesn’t seem to be slowing down one bit. Although some have argued that adoption of this technology may not happen soon, it is certain that if Indonesia keeps pursuing and developing blockchain technology, it will position itself as a major innovative entity in Southeast Asia.

David is a professional writer and blockchain enthusiast who caught the blockchain fever three years ago and has never looked back since then. His genuine interest in this emerging technology combined with his writing prowess allows him to create unique and engaging blockchain content.

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