Booz Allen Hamilton's Middle East office released a report this week pushing Gulf states to build blockchain infrastructure for their smart city plans and emerging financial systems. The report also e
Booz Allen Hamilton's Middle East office released a report this week pushing Gulf states to build blockchain infrastructure for their smart city plans and emerging financial systems. The report also encouraged the region to nurture startups that can capitalize on the technology.
The timing aligns with GCC nations constructing new smart cities. The initiative, announced earlier in 2016, sits within a broader regional development strategy. Dubai will host the Arab Future Cities Summit in November, a two-day gathering focused on emerging technologies and the emirate's own smart city ambitions.
Booz Allen sees blockchain as essential to building out a functioning digital economy across the Middle East. The firm argues the technology helps regional authorities unlock value from the massive data streams flowing through their systems, addressing consumer needs without proportional cost increases. The worldwide digital services sector will expand to $1.2 trillion by 2018 from $768 billion in 2013, a market the region risks abandoning if it doesn't move fast. Booz Allen projects digitization alone could add $5.5 billion to Dubai's GDP within the same timeframe.
"Governments across the Middle East are moving beyond oil and searching for new revenue streams, positioning emerging technology as a priority," Ramez Shehadi, Booz Allen's executive vice president and managing director in the region and a co-author of the report, said in a statement. "But growth brings risk. As smart cities expand to meet national priorities, states must guard against hacktivism and cybercrime. Blockchain provides a way forward, meeting digital economy goals without sacrificing network security."
The technology applies across sectors. It can prevent cybercrime by reinforcing security around digital certificates and certification systems. Blockchain use cases span healthcare, automotive, and financial services.
Healthcare stands out as a prime application. The technology prevents data breaches by enabling trustworthy transactions using multi-signature and cryptographic methods. Multiple parties can view and share patient records while maintaining data integrity. Insurance and billing workflows also benefit. Patients, insurers, and hospitals can process payments through a single interface.
Dr. Mahir Nayfeh, Booz Allen's senior vice-president and report co-author, stressed blockchain's role in data monetization. "Data becomes currency through blockchain," he said. "Organizations often refuse to share information due to security concerns. Blockchain removes that barrier, lets groups opt into shared data systems, and lets those networks establish data value over time."
The financial sector sees blockchain as a direct channel for secure, efficient trading of financial instruments. GCC governments can use it to strengthen the Islamic capital markets by bolstering transaction security and clearing mechanisms.
The technology also streamlines business basics: company registration, capital sourcing, and intellectual property filing. Individuals retain control, granting access to approved entities in a network while keeping their records current.
In February, the Dubai Museum of the Future Foundation established the Global Blockchain Council. The group brings together 32 government bodies, leading UAE-based banks, multinational firms, and blockchain specialists to champion the technology and digital currencies. The council has already launched several test programs. They include a blockchain system for customer loyalty rewards, a platform for clearing and settling financial transactions, and a blockchain setup to authenticate diamonds and track their origin.
