Recording of Transactions on the Blockchain Platform Encourages Economic Inclusion
“The consistent implementation of economic inclusion in the MSME sector will strengthen the financial system in the long term.” — Ronald Waas, former Deputy Governor of Bank Indonesia.
Economic inclusion is very vital to create a healthy business ecosystem, especially for the MSMEs. It rules out the needs for intermediaries’ charges. Economic inclusion can also enhance the opportunities for MSMEs to thrive by becoming more competitive in the emerging market. Specifically, it will stimulate the economic activities of businesses and let them have convenient access to the banks and other business solution services.
In this digital era, almost every aspect of life is integrated with technology, and the industrial sectors are no exception. There are e-Commerce, fin-tech, and now blockchain. It is believed that blockchain will enlarge the opportunities for MSMEs even further.
Proper technological implementation as the groundwork of economic inclusion
The idea of economic inclusion is to bring prosperity to the society, but it cannot be denied that the implementation is hard to accomplish. With regard to conventional businesses, convenient access to credit or financial solutions will also risk the stability of the financial system. For one thing, the number of poor credit risk is too high without careful regulations. The credibility of a creditor has to be trusted, and the financial record must be legitimate. The cash flow of the creditor’s record will form a financial record that will go to a credibility assessment.
In the modern business ecosystem, digital technology allows MSMEs to have financial records similar to those of the banks. Every transaction that is initiated on a digital platform is accurately recorded with timestamps.
As for digital asset security, modern technology practitioners and enthusiasts believe that blockchain is now the most suitable platform to support a healthy business ecosystem with effectiveness and security. This technology has a similar function to a bank account for its transactional recording. However, the blockchain gives users authority to themselves. Each user is allowed to directly share assets to whomever they trust. Most importantly, unlike with the banks, users would not be burdened with unnecessary costs.
In short, the blockchain technology makes SMEs able to reach top-tier producers and get the lowest manufacture prices possible. Simultaneously, manufacturers are able to spread products to their own market.
On a blockchain-based platform, all information data are accurately recorded using a cryptography and stored in blocks which are marked with timestamps. If a set of information is already recorded in a block, it is immutable and governed by the rules of the network. That is, every change made in each block will create a new block that links to the previous blocks.
This means that once the information is there, it stays there and cannot be changed or manipulated without leaving traces, thus creating a corrupt-free system. This design system makes blockchain secure and decentralized. There is no single point collecting all data which are vulnerable to being hacked. Based on this blockchain design system, Tokoin is a great tool for storing information in terms of security. By enabling the blockchain technology, Tokoin creates an efficient, secure, and trustworthy business ecosystem. MSMEs can utilize the blockchain, recording financial transactions to replace credit history as a step to build the credibility of their business. The transaction history of the MSMEs’ initiation can guarantee business feasibility to access various business solutions.
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