The Economics of Oil in the Last Hour

By Jamari Mohtar

July 8, 2018


Someone brought to my attention an article from an investment advisory newsletter, the Palm Beach Daily, with a heading of The Third “Oil Shock” Is Coming, dated July 1.

It was written by Nick Giambruno, the Editor of Crisis Investing, another newsletter that has a sharing arrangement with the Palm Beach Daily, analogous to the shared, distributed network of the blockchain.

I read it with trepidation because I could see its relation to the prophecies of the Last Hour in Islamic Eschatology.

However, the article at first didn’t grab my immediate attention until a few days later due to four reasons:

  • Time consuming research

Writing a comment piece about oil and gas (O&G) requires the knowledge of some technical “mumbo jumbo” jargons that will consume a lot of my time in research in order to “laymanise” these jargons so that readers of my blog can follow and understand what I’m talking about and where I’m coming from.

To do this, I must have an excellent understanding of these jargons first before I can laymanise them, for otherwise, I would be confusing my readers with my confused article, arising from my confused mind due to the lack of a robust research.

Fortunately, Giambruno wrote in an easy manner, free from jargons although he did not define what oil shock means other than implicitly assuming it has to do only with a hefty escalation of oil prices.

The 2014’s plummeting of oil prices can also be considered as an oil shock if a steep dive in price is included in the definition.

  • Boring topic

O&G is a boring topic although oil and gas are important lubricants of life and the economy, not to mention your car too. But I have a strong feeling even after I have laymanised these technical stuff for the benefit of the lay readers, the subject will still remain boring to most species of humankind.

The exception are those unsung heroes and heroines in the O&G sector who work very hard to “lubricate” our life such that we can enjoy the smoothness, roundness, conveniences, comforts and luxuries of modern living, for otherwise we would still remain a modern caveman like Mr Flintstone driving a Flintstone-branded car.

  • Blockchain Technology (DLT)

My inclination now is more in writing on the more exciting development in the field of disruptive blockchain technology otherwise known as distributed ledger technology (DLT) that will enhance innovation, and how to manage the concomitant challenges DLT will definitely cause in displacing people and resources en masse, once the innovation that it has unleashed become mainstream one day, which according to experts will slowly, gradually and surely take place in the next three to five years.

Some experts are already talking about the potent combination of frontier technologies like the blockchain, artificial intelligence (AI), augmented reality (AR) and the Internet of Things (IoT) that will massively disrupt in the very near future existing technologies by changing the whole landscape of the way we do things today in the most positive, productive, cost-effective and efficient manner.

What an exercise in contradiction – disruptive, yet positive and productive.

These seem to have made other disruptive frontier technologies that had made their appearance relatively much earlier such as 3-D Printing, unmanned sector like drones, and automation rather obsolete before they can even settled comfortably as mainstream technologies, unless they reinvent themselves by combining with at least one of the four technologies above by capitalising on interoperability – the ability of the core component of these technologies to “talk” to each other.

More on this in my future post, in sya Allah.

Already, the emergence of cryptocurrencies and blockchain technology have created two nascent disciplines called Tokenomics and Cryptonomics that have been ignored by the majority of universities worldwide because they are clueless on what blockchain in essence is all about.

Worse is their misconception that blockchain is nothing more than merely hypes concerning the hated, volatile and “fraudulent” cryptocurrencies (read Bitcoin), which dare to replace fiat monies as legal tender, exempt themselves from regulation, and give themselves the unilateral privilege of anonymity (all misconceptions of course!).

The exceptions are very few such as the Said Business School of the Oxford University, which had just organised a short course on the Oxford Blockchain Strategy Programme for professionals, entrepreneurs, founders of start-up companies and regulators from all over the world in February to June.

  • Aggressive selling

The biasness against financial advisory newsletters in general which I suffer, from time to time, because of their aggressive stance in selling their investment ideas and strategies for a hefty subscription rate by lauding how correct and accurate their recommendations were in making tonnes of money for you, had you only followed their recommendations.

At the same time, they tend to keep a low profile on the subject of their bold, specific predictions / recommendations that had gone off the mark, which may have burnt the pocket of their subscribers who followed their investment advice.

But if you try hard enough, you may find some gems in these financial advisory sector such as the Florida-based Palm Beach Daily, and the Crisis Investing newsletters which would precede their recommendations / predictions with solid research and excellent analysis of the geo-political and socio-economic happenings that occur behind the scenes as a backdrop for their investment recommendations and predictions.

Gist of the article

The year 1973 saw Israel at war with Egypt and Syria – the Yom Kippur War. In reaction to US support for Israel, the Organization of the Petroleum Exporting Countries (OPEC) placed an oil embargo on the US and several other countries, and cut oil production.

The result – the first oil shock, which saw oil prices quadrupling from US$3 per barrel to US$12.

The second oil shock in 1980 featured the Iraq-Iran War, which arose in the aftermath of the 1979 Iranian Revolution – one of the bloodiest conflicts of the past 50 years.

The result – oil prices went up more than double because Iraq and Iran were (and still are) two of the biggest oil exporters in the world. No surprise then that the war rocked global energy markets.

There was also another, less dramatic price spike in the early 1990s after the invasion of Kuwait by Iraq, triggering the first Gulf War where oil prices shot up over 70%.

Since then, there was talk of a third oil shock but it never materialised. Never materialised because obviously when Nick Giambruno talked about oil shock, he is limiting it to just a spiking of oil prices, and in this context he is right.

Giambruno’s scenario of a third oil shock, which he predicts will be “even worse than” the previous ones is hinged on the Middle East where wars there are often catastrophic for global oil supplies.

Two geopolitical camps exist there: the US and its allies, like Israel and Saudi Arabia on the one side; and Russia and its allies, like Iran and Syria on the other.

The most significant military conflict on the geopolitical chessboard today is the bloody conflict in Syria that is entering its seventh year.

While on the one side, the US through its proxies, has been trying to overthrow Syria’s leader Bashar al-Assad, Russia and Iran, on the other side of the divide, have massively fortified the Assad regime who is still firmly in charge.

Since the demise of Saddam Hussain, the regional balance of power is favouring Iran. The US, Israel and Saudi Arabia find that unacceptable. According to Giambruno, at this point, war is the only thing that could reverse the trend. Of course, that does not mean he is cheering for war.

The first salvo in the current geopolitical chessboard opens with Israel’s recent move in launching its biggest military strike on Syria since the 1973 Yom Kippur War. This attack, and other recent ones, killed dozens of Syrian and Iranian soldiers.

On this basis alone, many people think the focal point of the Middle East’s next regional war will move to Iran, and with these Israel’s attacks, they also think that the war has already started.

There have been numerous, unambiguous signs that the US has Iran in its radars.

To begin with, President Donald Trump has recently filled up major vacancies in his Administration with war hawks. In April, he made John Bolton his National Security Advisor and Mike Pompeo his Secretary of State. Both have been eager to bomb Iran for years.

In early May, Rudy Giuliani, one of Trump’s lawyers and a long-time political ally, announced that Trump is “committed to regime change” in Iran.

A few days later, President Trump pulled out of the 2015 Iran nuclear deal. He also re-imposed economic sanctions on Iran.

A war between Iran and Israel (and its US-led allies) would wreak havoc on the oil market. That’s because Iran holds a very powerful card, as it could effectively shut down the Strait of Hormuz, the narrow channel connecting the Persian Gulf to global markets. It is the only sea route from the Persian Gulf to the open ocean.

That translates into roughly 35% of the world’s oil traded by sea. With nearly US$2 billion worth of oil passing through the Strait of Hormuz every day, it’s the most critical oil choke point in the world.

In the event of an all-out war, Iran would quickly shut down the Strait of Hormuz. It has made this blatantly clear.

Credible studies have shown that – in a best-case scenario for the US Navy – Iran could seal off the Strait with sea mines and asymmetrical warfare techniques for at least a month before the US could reopen it. The Pentagon itself has admitted as much.

If and when a war with Iran happens—even if there’s only a whiff of it happening—investors should expect the third and most dramatic oil shock, says Giambruno.

Connecting the dots

Based on authentic Ahadith, there are many prophecies on the signs of the impending Last Hour before this cataclysmic event itself happens. Analysing these Ahadith, Muslim scholars have classified them into minor and major signs.

The thinking behind this analysis is the Last Hour will not come until all the major signs have made their appearance, and in turn, the major signs will not come until all the minor signs have made their debut.

Analysis (a form of ijtihad) is required because the nature of prophecies is such that they are not precise or exact in details, for otherwise they would no longer be a prophecy. Hence, the Ahadith on the events preceding the Last Hour are, more often than not, allegorical (mutasyabihah) with respect to details and chronology.

Muslim scholars are in agreement on there being about 60 to 100 minor signs of the Last Hour before the emergence of the major signs, and they believe that all the minor signs have made their appearances.

The Hadith narrated by Imam Muslim below captures the essence of the 10 major signs of the Last Hour.

Allah’s Messenger (may peace be upon him, s.a.w) came to us all of a sudden as we were (busy in a discussion). He said: What do you discuss about? They (the Companions) said. We are discussing about the Last Hour. Thereupon he said: It will not come until you see ten signs before and (in this connection) he made a mention of the (1) smoke, (2) Dajjal, (3) the beast, (4) the rising of the sun from the west, (5) the descent of Jesus son of Mary (Allah be pleased with him, alaihi salam), (6) the Gog and Magog, and land-slidings in three places, (7) one in the east, (8) one in the west and (9) one in Arabia at the end of which (10) fire would burn forth from the Yemen, and would drive people to the place of their assembly.

But there are a few portents of the Last Hour mentioned in some Ahadith that could neither be classified as minor nor major signs. These include the coming of the Great War (Malhama) and the coming of Imam Mahadi contemporaneously with the coming of the Dajjal and the descent of Prophet Jesus son of Mary (as).

For lack of a better term, I would call these the intermediate signs that bridge the gap between the minor and major signs.

Let’s analyse another Hadith of Imam Muslim:

Allah’s Messenger (s.a.w) said, “The Hour will not be established (1) till two big groups fight each other whereupon there will be a great number of casualties on both sides and they will be following one and the same religious doctrine, (2) till about thirty Dajjals (liars) appear, and each one of them will claim that he is Allah’s Messengers, (3) till the religious knowledge is taken away (by the death of religious scholars) (4) earthquakes will increase in number (5) time will pass quickly, (6) afflictions will appear, (7) Al-Harj, (i.e., killing) will increase, (8) till wealth will be in abundance – so abundant that a wealthy person will worry lest nobody should accept his Zakat, and whenever he will present it to someone, that person (to whom it will be offered) will say, ‘I am not in need of it, (9) till the people compete with one another in constructing high buildings, (10) till a man when passing by a grave of someone will say, ‘Would that I were in his place (11) and till the sun rises from the West. So when the sun will rise and the people will see it (rising from the West) they will all believe (embrace Islam) but that will be the time when: (As Allah said,) ‘No good will it do to a soul to believe then, if it believed not before, nor earned good (by deeds of righteousness) through its Faith’ (6.158). And the Hour will be established while (12) two men spreading a garment in front of them but they will not be able to sell it, nor fold it up; and the Hour will be established when (13) a man has milked his she-camel and has taken away the milk but he will not be able to drink it; and the Hour will be established before (14) a man repairing a tank (for his livestock) is able to water (his animals) in it; and the Hour will be established (15) when a person has raised a morsel (of food) to his mouth but will not be able to eat it.”

In the above Hadith, Events 1-11 are all portents preceding the Last Hour (keyword: The Hour will not be established) while Events 12-15 are portents occurring just before the Trumpet is blown by Angel Israfil (keyword: The Hour will be established).

Since in this article, my purpose is to connect the dots between oil and the Last Hour, Event 1 fits the bill. In this regard, the coming third oil shock predicted by Giambruno arising from the unhappiness of US, Israel and Saudi Arabia over the issue of the regional balance of power favouring Iran, can be seen as the lead-up to the coming Great War (Malhama), just as the war in Syria is the lead-up too.

It does not take rocket science to read the US strategy in this regard. The stalemate in the war in Syria has forced Trump to go for a two-pronged strategy – on the offensive with Iran and seeking “détente” with North Korea.

With these two “nuclear-capable” nations being taken care of through this two-pronged strategy, the US can then singularly focused its attention on Syria by taking on Assad and the Russians in Syria.

Some Muslims scholars opine that the 1980 Iran-Iraq war is already a fulfillment on this prophecy of Event 1. This is incorrect. It’s actually a fulfillment of another prophecy (another intermediate sign):

Abu Huraira reported Allah’s Messenger (s.a.w) as saying: The Last Hour would not come before the Euphrates uncovers a mountain of gold, for which people would fight. Ninety-nine out of each one hundred would die but every man amongst them would say that perhaps he would be the one who would be saved (and thus possess this gold).Muslim

Abdullah b. Harith b. Naufal reported: I was standing along with Ubayy b. Kaab and he said: The opinions of the people differ in regard to the achievement of worldly ends. I said: Yes, of course. Thereupon he said: I heard Allah’s Messenger (s.a.w) as saying: The Euphrates would soon uncover a mountain of gold and when the people would hear of it they would flock towards it but the people who would possess that (treasure) (would say): If we allow these persons to take out of it they would take away the whole of it. So they would fight and ninety-nine out of one hundred would be killed. – Muslim

The idea of gold underneath a river (Euphrates) is an allegory of black gold i.e. oil. The above Hadith can also be considered as a precursor to the Malhama just like the current war in Syria, and the impending attack on Iran by the US as predicted by Giambruno.

Also note that in Event 1, two big groups were mentioned, whereas in the River Euphrates prophecy, there was no mention of big groups, which means the combatants were limited to just the two warring sides which was the case in the Iran-Iraq war.

Also mentioned in Event 1 is the fact that the combatants will be of the same religious doctrines. The Syrian crisis initially started with just two groups – the Assad government and the Syrian Mujahidins (both of the same religious faith). Later, the devilish ISIS joined the fray (still of the same faith).

In a matter of a few years, this tripartite war became a bigger group with the participation of US, Russia, Israel, Iran and Saudi Arabia in the war. Sources say US Special Forces and Russian elite paratroopers are already on the grounds in Syria, taking part in the war.

US, Russia and Israel can be considered as of the same “doctrine”, as they subscribe to the ideology of secularism – a doctrine which is either against or neutral to religion having an active say in the public domain of life.

The old Soviet Union is an example of the former (against religion) while the US, Israel and Russia (the successor of the Soviet Union), are examples of the latter (neutral to religion).

Based on some Ahadith, the venue of the Malhama is however, not in Syria or Iran but in another country.

Stay tune on this in my future post!


GE14: And the winner is …

By Jamari Mohtar

March 28, 2018

At this juncture, when announcement on the date of the 14th General Elections (GE14) is just a few weeks or months away, the pertinent question is no longer whether the ruling coalition Barisan Nasional (BN) will win. Rather, the issue now is whether BN will regain its two-thirds majority.

After losing the two-thirds majority in the previous two GEs, BN looks set to regain its two-thirds majority in GE14.

One indication of this is when we see the vehemence in which some foreign media revived the stale issue of 1MDB by casting aspersions on Prime Minister Datuk Seri Najib Razak in their news report. Obviously they wouldn’t have done this if they expect BN to win with a razor-thin majority or better still, losing.

Since 2016 when former premier Tun Mahathir Mohamed left Umno and then formed a new party to fight Najib, Malaysians have been in an election mode, waiting for the mother of all elections to take place.

The tempo was raised several notches high when the Election Commission (EC) announced on March 9 its submission to Najib the final report on the delineation of electoral boundaries for parliamentary and state constituencies.

Soon after this announcement, which marked the first event to take place before an election can be called, three foreign media – the Australian, Economist and MSNBC – had fired their first salvo by spewing their venoms at Najib in what can be seen as an attempt to influence the outcome of GE 14, which must be called by August.

Between this first event and the announcement of Nomination Day and Polling Day by the EC, three more events would have to take place before election can be held. It would be very interesting to see whether the foreign media will create some pre-election ruckus at these three events. These events are:

  • Acceptance of the recommendations of the EC report by Najib in its entirety or with further inputs from him. A media statement on this need not be issued. If issued, it would be interesting then to watch whether there would be any further salvos from the foreign media.
  • The third event signalling election is nearer still would be when Najib tables the EC report to Parliament for debate and passage. The report does not require a two-thirds majority. As a simple majority would suffice, passage could be expected to be a smooth-sailing affair. The report, which is already in the hands of the Speaker of the Dewan Rakyat, is expected to be tabled in Parliament this week. Again, it would be interesting to watch whether there will be interference from the foreign media.
  • The fourth event would cause decibels to rise further when the Malaysian King, the Yang di-Pertuan Agong announces the dissolution of Parliament on the advice of the Prime Minister. By then it doesn’t matter whether the foreign media will interfere or not because the fury of the foreign media will be more than equally matched by the full fury of the government and the ruling BN election machineries.

Actually quite earlier on, many political watchers and analysts had already predicted on the inevitability of a Barisan’s victory. The only party, which is forecasting on an Opposition’s victory, is of course, the Opposition itself.

But as the adage goes, one week in politics is such a long time and between now and Polling Day, anything could happen to derail this predicted victory of BN. So it is of the utmost importance that BN does not get complacent, a point stressed repeatedly by its leaders.

Here are some factors that will clinch a Barisan’s two-third majority victory.

A newfound unity in the ruling coalition

Unity is the most critical and crucial factor, which is the clincher for a landslide victory. As one ustaz (religious teacher) told the writer: “Unity is paramount. You can have a solid candidate with good pedigree and credentials, solid manifesto and superior financial resources but without unity, everything will go down the drain.

“History has shown many instances of how a small group of people poorly equipped with weapons and without the proper training in battle but enormously equipped with the cohesive spirit of unity and solidarity coupled with a strong faith in victory, can defeat a huge and better equipped army, many times its size.”

Never before in so many years in the history of Umno is there such a solid unity and solidarity between its leaders and the rank and file on the one hand, and among its leaders and among its rank and file, on the other hand.

And this is achieved due to the political brinkmanship of Najib in disgorging the elements of disunity in Umno in the form of the 3Ms – Mahathir, Muhyiddin and Mukhriz.

When Najib sacked Datuk Mukhriz Mahathir as the Menteri Besar of Kedah in early 2016, on hindsight, this was a double whammy strategy as it led to Mukhriz’s father, Mahathir, to voluntarily sack himself from Umno.

Absent the main source of disunity in the party, Najib then went about to patiently and gradually build first, a strong and united Umno, and then an equally strong and united BN.

At every opportunity during party events, together with his deputy in Umno and BN – Datuk Zahid Hamidi – Najib impressed on the rank and file the danger of infighting within the party and coalition.

One classic example of Umno’s disunity in the past that is being oft repeated as lesson to learn at these party events was the costly defeat at the federal constituency of Sepang in Selangor during GE13.

The incumbent MP then who was heading the Umno division of Sepang became so power crazy that he engineered the removal of his division rivals, some of whom were sitting legislators of the Selangor State Assembly, such that they were not chosen as candidates at the state level for GE13.

Out of anger and spite, two of his rivals sabotaged Umno by contesting as Independents against him, giving rise to a comical situation in which the sole Opposition candidate from PAS was faced with three Umno candidates in a four-cornered fight.

Umno, as expected, not only lost the federal seat of Sepang, but also three state seats under that constituency, and the Opposition for the first time managed to win both the federal and state seats in Sepang, denting the hope of Umno to make a comeback in Selangor then.

Going forward to GE14, this will be a painful lesson that Selangor Umno will take to heart in its determination not to repeat the fiasco, as can be seen in the constant reminder of Najib and Zahid to all Umno members on the need to fight in battle array as if they were a solid cemented structure against the Opposition.

This newfound unity can also be seen in the component parties of BN. You don’t see public squabbles among members of the MCA or MIC, unlike in the past. This is not to say that squabbles did not exist but they were done behind closed doors, and were resolved very quickly, unlike the Opposition.

Whereas MCA and Gerakan used to squabble among themselves in BN in the past, there is now a concerted effort to move together in unison in exposing the hollowness of the Penang DAP and Selangor PKR state governments’ self touted Competency, Accountability and Transparency (CAT) policy.

The Penang “Tunnel Vision” scandal and the Selangor Ijok Land scandal which were whistle-blown by the combined efforts of MCA, Gerakan and Umno, had laid bare the mockery of this CAT policy such that it has earned the epithet of a “sissy and pussy meow” policy among some commentators in the social media.

Fighting fake news with an appeal to facts

In this era of post-truth world where truth is no longer determined by facts but by what those with the loudest voice say in the social media, BN is at a disadvantage, even though this loudest voice may originate from empty vessels.

This is because since the 1990s, mastery of social media belonged to the Opposition and at each GE then, they were able to make a dent on the votes garnered by BN, first by capturing Terengganu for the first time in 1999, and then Penang, Kedah, Selangor and Perak in 2008.

This time round BN has a full functioning and well-run Strategic Communications team led by Minister Datuk Abdul Rahman Dahlan and Datuk Eric See-To.

The brain behind this team is Eric. Working independently with bloggers such as Lim Sian See and Raja Petra Kamarudin, their postings in their Facebook pages are well visited and shared by netizens such that they are causing the Opposition a run for their money.

A simple but powerful strategy employed by them in their social media strategy is to confront any allegations or fake news of the Opposition with an appeal to the facts.

When the Opposition raised questions on national debt, for instance, with the ulterior motive of reviving the stale 1MDB issue by selective use of statistics, Eric and Lim used facts to show:

  • It’s the ability to pay that matters, as all nations have national debts;
  • Percentage of the budget used to service debt and interest was worst during the Mahathir’s era – more than 30% vis-à-vis the current 12% during the Najib administration;
  • Percentage of debt to GDP was worst during the Mahathir’s era at more than 100% of GDP compared to Najib’s self imposed limit of not more than 55% (currently 50.7%); and
  • An admirable foreign reserve of about US$104 billion under Najib compared to a pittance of about US$20 billion under Mahathir.

In this regard, Najib has set a good precedent by being social media savvy in using the messaging app Telegram to disseminate what he and his administration had done, are and will be doing for the rakyat. To the best of my knowledge no politician has ever done this via Telegram including the social media savvy Donald Trump.

It’s the economy, stupid!

Time and again polls have shown that the performance of the economy is a big factor in winning election. Bill Clinton used it effectively with the mantra “It’s the Economy, Stupid!” against George HW Bush and went on to win the 1992 election.

When you have continuous quarterly economic growth that beats analysts’ expectation, when you have record-breaking FDI commitments – much to the envy of other countries – from a country whose economy is the second largest in the world, and when you manage to get a scoop in getting a global iconic entrepreneur or expert with a global brand name to advise you, and when all these are acknowledged by supra-national organisations like IMF, WTO and World Economic Forum, these are the indications showing the scale is already tipped in favour of the incumbent having a solid chance of a landslide win in GE 14.

Because this shows the swan song since 2015 of Oppositionists like Mahathir and Lim Kit Siang that Malaysia is on the brink of bankruptcy is humbug and fake news. It also shows the fundamentals of the economy are basically sound, despite the challenging global economic climate or whatever problems. Also it’s a testament that the economics-trained Najib runs the economy much better than the medical-trained Mahathir.

Finally, will reviving the issue of 1MDB put a spanner in the excellent works of BN to regain a two-third majority? I don’t think so because the issue was put to the test in 2016 in two by-elections at Sungai Besar and Kuala Kangsar.

BN especially Najib was at his most vulnerable then and the two constituencies affected were marginal ones in that the majority gained by BN in GE13 was razor-thin. But the people in these two constituencies despite the loud beatings of the drums on 1MDB by Mahathir and Kit Siang returned BN with a bigger majority.

Reviving the 1MDB issue again in GE14 is akin to reviving a failed strategy on the part of the Opposition. If one keeps on using repeatedly a failed strategy, and yet expecting a different outcome, isn’t that the definition of insanity?


Jamari Mohtar is a veteran journalist who used to live and work in Singapore. He has more than 20 years of experience in the media including stints as the Singapore Correspondent for Focus Malaysia, a Malaysia-based business weekly, and Roving Correspondent of Singapore’s Channel NewsAsia.  

Encouraging innovation via regulatory sandbox


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By Jamari Mohtar

Across the Straits

Focus Malaysia | Oct 14, 2017

As the saying goes, necessity is the mother of invention. But in today’s world of financial technology (fintech), a more apt proverb would be “sandbox is the father of innovation”. It’s high time the father gets recognition too!

Who would have thought that a child’s play area – the sandbox – would become the buzzword for financial regulators to encourage innovations in fintech that will make their country a smart financial centre, which in turn is a subset of a smart nation.

As the fintech industry continues to grow, regulators around the globe are starting to sit up and take notice. Over the last one and half years, a new trend in financial services regulation – the regulatory sandbox – has emerged.

Britain was the first to launch the regulatory sandbox in May last year. Since then, regulators in, among others, Singapore, Hong Kong, Switzerland, Thailand, Abu Dhabi, Australia, Canada and Lithuania have adopted similar frameworks. Not to be outdone by a pre-Brexit UK, the European Union (EU) is contemplating proposals for a possible regulatory sandbox.

I first heard about this sandbox thingy from my Singaporean lawyer friends in the course of our discussion on the inadequacy of the current laws to cope with crypto currencies, smart contract, block chain technology and Initial Coin Offering because of the disruptive nature of all these phenomena.

When it comes to regulatory sandbox, Singapore is on the ball when the Monetary Authority of Singapore (MAS) launched it in June last year, just a month after Britain.

The rationale for launch is that emerging financial products or services are becoming more sophisticated and there may be uncertainty over whether the innovation meets regulatory requirements.

Where it is less clear whether a new financial product or service complies with legal and regulatory requirements, some financial institutions (FIs) or start-ups may err on the side of caution and choose not to implement it. Thus promising innovations may be stifled and opportunities missed.

Hence, MAS is encouraging more fintech experimentation so that promising innovations can be tested in the market and have a chance for wider adoption in Singapore and abroad.

Regulatory sandbox will enable FIs as well as fintech players to experiment with innovative financial products or services in the production environment but within a well-defined space and duration. It shall also include appropriate safeguards to contain the consequences of failure and maintain the overall safety and soundness of the financial system.

Sandbox is a concept borrowed by regulators from the world of software development. It enables developers to test a technological proof of concept prior to a full-scale public release, and provides a firm with the ability to amend and improve products iteratively based on feedback, and before the firm has invested significant retrospective costs in a project.

Experiment with real customers

 In a regulated sector such as financial services, this iterative approach can be difficult for firms to replicate, especially for startups, which usually do not have regulatory permissions that are needed to conduct real-world tests.

By allowing new firms to experiment with real customers in a regulatory sandbox, regulators are hoping to eliminate some of the temptations for firms to rely on loopholes or an aggressive reading of financial services rules in order to avoid the scope of regulation in their testing phase.

Hence, the sandbox is designed to create a “safe space” where firms can enter the financial services market and generate new ideas within a flexible regulatory control and support.

Such regulatory sandboxes may not only attract start-up firms, but also may be useful for more established market players which are considering launching innovative new products that do not fall within the framework of existing financial services regulation. These include larger firms in the banking, payment services and asset management sectors

In November last year, MAS issued guidelines along with a template application form for applicants who intend to take part in a regulatory sandbox.

There is no limit to the number of firms that can join the MAS’ sandbox. The regulator will publish the name of a successful applicant, along with the start and expiry dates of the sandbox.

MAS aims to make Singapore a smart financial centre by promoting the use of innovative and safe technology in the financial sector. The objective is to encourage more fintech experimentation within a well-defined space and time where MAS will provide the requisite regulatory support so as to increase efficiency, manage risks better, create new opportunities and improve people’s lives.

When a company applies for participating in the regulatory sandbox, MAS will ask whether:

  • Its fintech idea is similar to existing solutions in Singapore;
  • Applicant does not do due diligence to test and verify the viability of its fintech solution;
  • it is sufficient to reasonably and effectively experiment with the solution in a laboratory or test environment; and
  • applicant does not have the intention to deploy the fintech solution in the city-state more broadly after exiting the sandbox.

If the answer to all the above questions is in the affirmative, the application will be rejected. But if all the answers are in the negative, MAS will have a further six evaluation criteria in finally accepting an application based on:

  • Solution is technologically innovative;
  • Solution addresses a problem or brings clear benefits to consumers;
  • Test scenarios and outcomes clearly defined;
  • Boundary conditions defined for example sample set of 50 customers;
  • Major forseeable risks arising from fintech idea have been assessed and mitigated; and
  • There is an exit strategy in the event the solution is not feasible.

Customers beware

The successful sandbox company will have to clearly inform customers that it is operating in the sandbox; disclose the key risks associated with the product or service, as these relate to non-delivery or underperformance; and customers will need to acknowledge that they have read and understood these risks.

Meanwhile, MAS through MoneySense, which is a national financial education programme for Singapore, has advised Singaporeans who are thinking about purchasing a product or engaging the services of a company that is operating in the sandbox to be aware, among others, that the company is not required to comply with some of the usual regulatory requirements imposed for providing financial products and services to customers.

Also, by participating in any sandbox experiment, consumers may not be able to seek help from consumer protection schemes or the deposit insurance scheme/policy owners’ protection scheme.

Jamari Mohtar is a veteran journalist who used to live and work in Singapore. Comments:


Secebis sejarah Bitcoin

Found this bit of history on bitcoin as I was surfing in cyberspace. The author was Benjamin Wallace and the article was written in 2011. Not sure though in what publication it appears.

Decided to translate it into Malay. Just for the fun of practising translation because as they say, practice makes perfect.


Secebis sejarah Bitcoin

Oleh Benjamin Wallace | 2011

PADA 1 November 2008, seorang lelaki bernama Satoshi Nakamoto telah menyiarkan kertas kajian kepada listserv yang terdiri daripada para peminat kriptografi. Listserv adalah sebuah applikasi yang menyebarkan mesej kepada para pelanggan dalam senarai mel elektronik. Kertas kajian itu menggariskan gagasan Nakamoto untuk melahirkan mata wang digital baru yang dipanggil bitcoin.

Tiada seorang pun di kalangan veteran kriptografi dalam senarai mel elektronik tersebut pernah mendengar tentang Nakamoto, dan maklumat jelas mengenainya adalah begitu kabur dan saling bercanggah. Dalam profil dalam talian (online profile), beliau menyatakan yang beliau tinggal di Jepun. Alamat e-melnya pula adalah dari penyedia khidmat Jerman yang ditawarkan secara percuma. Carian Google untuk namanya tidak mempunyai maklumat yang relevan; ia jelas merupakan nama samaran (pseudonym).

Tetapi sementara siapakah Nakamoto itu sendiri telah menjadi satu teka-teki, ciptaannya telah dapat menyelesaikan masalah yang senantiasa membelenggu para ahli kriptografi selama beberapa dekad sebelum ini. Gagasan mengenai wang digital – memudahkan dan tidak boleh dikesani serta bebas dari pengawasan kerajaan dan bank – telah menjadi topik hangat sejak kelahiran Internet. Cypherpunks, sebuah gerakan ahli-ahli kriptografi yang mendukung kebebasan (libertarian) pada tahun 1990an, telah mencurahkan tenaga dengan penuh dedikasi untuk menjayakan projek tersebut.

Namun, setiap usaha untuk mencipta wang tunai maya telah gagal. Ecash, sistem anonim yang dilancarkan pada awal tahun 1990an oleh ahli kriptografi David Chaum, gagal, kerana sebahagian sebab kegagalannya adalah ia bergantung pada infrastruktur kerajaan yang sedia ada dan syarikat kad kredit. Cadangan lain menyusuli dan ini termasuk bit gold, RPOW, b-money – tetapi kesemuanya gagal untuk menjadi kenyataan.

Salah satu cabaran utama untuk mewujudkan mata wang digital melibatkan sesuatu yang dipanggil permasalahan berbelanja dua kali. Sekiranya dolar digital hanyalah semata-mata maklumat, bebas dari sifat kertas dan logam, apa yang menghalang seseorang daripada menyalin dan menampalkannya (copy and paste) dengan mudah seperti sepotong teks, kemudian “membelanjakannya” seberapa banyak yang mereka mahu? Jawapan konvensional melibatkan penggunaan rumah penjelasan pusat (central clearinghouse) untuk menyimpan lejar (ledger) masa sebenar semua urus niaga – memastikan jika seseorang menghabiskan dolar digitalnya yang terakhir, dia tidak boleh membelanjakannya lagi.

Walaupun lejar boleh membendung penipuan, namun ia tetap memerlukan pihak ketiga yang dipercayai (trusted third party) untuk mentadbir dan memantaunya. Dengan adanya bitcoin, khidmat dan pemantauan pihak ketiga tersebut tidak lagi diperlukan kerana lejar itu akan diagihkan secara awam, apa yang Nakamoto sebut sebagai “rantaian blok.” Pengguna yang bersedia menumpukan kuasa CPU untuk menjalankan perisian (software) komputer khas akan dipanggil pelombong (miners) dan akan membentuk rangkaian untuk menyenggarakan rantaian blok (blok chain) secara kumpulan. Dalam proses ini, mereka juga akan menjana mata wang baru.

Kesemua urus niaga akan disiarkan ke rangkaian, dan komputer yang menjalankan perisian akan bersaing untuk menyelesaikan teka-teki kriptografi yang mengandungi data dari beberapa urus niaga. Pelombong pertama yang dapat menghuraikan setiap teka-teki akan diberikan 50 bitcoin baru, dan blok urus niaga yang berkaitan itu akan ditambah ke rantai. Tahap kesukaran setiap teka-teki akan meningkat sebaik saja bilangan pelombong meningkat, yang akan mengekalkan pengeluaran ke satu blok urus niaga sekitar setiap 10 minit.

Di samping itu, saiz ganjaran menghuraikan teka-teki akan berkurangan dengan separuh bagi setiap 210,000 blok – bermula dengan 50 hingga 25, kemudian 25 hingga 12.5, dan sebagainya. Sekitar tahun 2140, mata wang bitcoin itu akan mencecah had yang ditetapkan oleh Nakamoto sebanyak 21 juta bitcoin.

Apabila kertas kajian Nakamoto muncul pada tahun 2008, kepercayaan awam terhadap keupayaan kerajaan dan bank untuk menguruskan ekonomi dan bekalan wang berada di tahap yang paling rendah. Pemerintah Amerika Syarikat (AS) telah membelanjakan dolar di Wall Street dan syarikat kereta Detroit. Bank Pusat Amerika (The Fed) memperkenalkan “pelonggaran kuantitatif” (quantitative easing) yang pada asasnya adalah dasar mencetak wang untuk merangsang ekonomi. Harga emas naik. Bitcoin tidak memerlukan kepercayaan kepada ahli politik atau pembiaya yang telah merosakkan ekonomi – ia hanya kepercayaan dengan algoritma anggun ciptaan Nakamoto.

Lejar awam bitcoin dilihat sebagai bukan saja dapat mengelakkan penipuan, malahan juga pengeluaran bekalan wang digital itu telah ditentukan terlebih dahulu agar ia tumbuh pada kadar yang dijangkakan, lantas tidak dipengaruhi langsung oleh bank pusat atau menyebabkan kadar inflasi yang terlalu tinggi. Nakamoto sendiri melombong 50 bitcoin pertama – yang dikenali sebagai blok genesis pada 3 Januari 2009.

Selama setahun lebih, ciptaannya itu menjadi tumpuan sekumpulan kecil para kriptografi yang berada dalam senarai pelanggan mel elektroniknya. Tetapi perlahan-lahan, berita mengenai bitcoin merebak di luar dunia kriptografi. Ia telah mendapat banyak penghargaan daripada beberapa penyokong terkemuka gagasan wang digital. Wei Dai, pencipta b-money, menyifatkan bitcoin sebagai “sangat penting”; Nick Szabo, yang mencipta bit gold memuji bitcoin sebagai “sumbangan besar kepada dunia”; dan Hal Finney, ahli kriptografi terkemuka dalam penciptaan RPOW, mengatakan ia “berpotensi mengubah dunia.” Yayasan Sempadan Elektronik, pertubuhan yang menyokong kuat konsep privasi digital (digital privacy), akhirnya mula menerima derma dalam mata wang alternatif itu.

Kumpulan kecil perintis bitcoiners tersebut semuanya berkongsi semangat kemasyarakatan (communitarian spirit) yang mirip dengan kumpulan masyarakat projek perisian sumber terbuka (open source software project). Gavin Andresen, seorang pengkod di New England, membeli 10,000 bitcoin dengan harga $50 dan membuat sebuah laman web yang dipanggil Bitcoin Faucet yang melaluinya beliau memberikan bitcoin secara percuma. Laszlo Hanyecz, seorang pemrogram komputer Florida, mengendalikan apa yang disifatkan oleh masyarakat bitcoiner sebagai urus niaga bitcoin yang pertama di dunia, dengan membayar 10,000 bitcoin untuk mendapatkan dua buah pizza yang dihantar dari Papa John. (Dia menghantar bitcoin kepada sukarelawan di England, yang kemudiannya memanggil pesanan kad kredit secara merentas dunia.) Seorang petani di Massachusetts bernama David Forster mula menerima bitcoin sebagai bayaran untuk stokin alpaca.

Apabila mereka dapat meluangkan  masa dari kegiatan perlombongan, kumpulan bitcoiners itu cuba menghuraikan misteri lelaki yang mereka kenal hanya dengan nama Satoshi. Pada saluran IRC bitcoin, ada yang menyebut bahawa dalam bahasa Jepun Satoshi bermaksud “bijak.” Ada juga yang tertanya-tanya sama ada nama tersebut adalah singkatan bagi empat syarikat teknologi mapan: SAmsung, TOSHIba, NAKAmichi, dan MOTOrola. Namun terdapat keraguan bahawa Nakamoto semestinya orang Jepun. Bahasa Inggerisnya mempunyai kesempurnaan simpulan bahasa seorang pembicara asli bahasa Inggeris.

Ada pendapat yang menyatakan Nakamoto bukan seorang lelaki tetapi kumpulan misteri dengan tujuan tersembunyi – mungkin pasukan di Google atau Agensi Keselamatan Negara. “Saya beremel dengan orang yang dikatakan sebagai Satoshi,” kata Hanyecz, yang berada dalam pasukan perintis pemaju teras bitcoin untuk seketika. “Saya selalu mendapat gambaran bahawa ia bukan orang sebenar. Saya akan mendapat balasan jawapan mungkin setiap dua minggu, seolah-olah orang itu akan menyemak emelnya sekali-sekala. Bitcoin seolah-olah boleh direka dengan baik dan dasyatnya untuk seorang saja melahirkannya.”

Nakamoto mendedahkan sedikit tentang dirinya sendiri, menghadkan perbualan dalam taliannya untuk perbincangan teknikal mengenai kod sumbernya. Pada 5 Disember 2010, selepas kumpulan perintis bitcoiners itu mula berurusan dengan Wikileaks agar ia menerima sumbangan dalam bentuk bitcoin, Nakamoto yang biasanya terlalu ringkas dan tegas dalam emelnya telah memberi pandangan yang agak berlainan dari wataknya: “Tidak, jangan berurusan dengan Wikileaks dalam bentuk bitcoin,” tulisnya dalam jawapan kepada forum bitcoin. “Projek perlu berkembang secara perlahan supaya perisian dapat diperkuat di sepanjang perjalanan. Saya membuat rayuan kepada Wikileaks untuk tidak menggunakan bitcoin. Bitcoin adalah komuniti beta kecil dalam peringkat awalnya. Anda tidak akan mendapat lebih banyak daripada pertukaran duit saku (pocket change), dan kepanasan yang anda bawa akan berkemungkinan memusnahkan kami pada peringkat ini.”

Kemudian, sepertimana kemunculannya secara mengejut dan tidak disangka-sangka itu, Nakamoto melenyapkan dirinya. Pada 6.22 petang GMT pada 12 Disember, tujuh hari selepas menyatakan pandangannya mengenai Wikileaks, Nakamoto menyampaikan mesej terakhirnya kepada forum bitcoin, mengenai beberapa masalah dalam versi terkini perisian. Maklum balas e-melnya menjadi lebih tidak menentu, kemudian berhenti sama sekali.

Andresen, yang telah mengambil alih peranan pemaju utama, kini nampaknya merupakan salah seorang daripada segelintir yang Nakamoto masih berkomunikasi. Pada 26 April, Andresen memberitahu rakan-rakannya: “Satoshi mencadangkan pagi ini bahawa saya (kami) harus cuba tidak menonjolkan keseluruhan perkara mengenai ‘pengasas misteri’ ketika bercakap secara terbuka mengenai bitcoin.” Kemudian Nakamoto berhenti menjawab walaupun kepada e-mel Andresen. Kumpulan perintis bitcoiners itu tertanya-tanya mengapa dia telah meninggalkan mereka. Tetapi dalam pada masa yang sama, ciptaannya itu telah mempunyai kewujudannya yang tersendiri.


A brief history on the origin of bitcoin

By Benjamin Wallace | 2011

In November 1, 2008, a man named Satoshi Nakamoto posted a research paper to an obscure cryptography listserv describing his design for a new digital currency that he called bitcoin.

None of the list’s veterans had heard of him, and what little information could be gleaned was murky and contradictory. In an online profile, he said he lived in Japan. His email address was from a free German service. Google searches for his name turned up no relevant information; it was clearly a pseudonym.

But while Nakamoto himself may have been a puzzle, his creation cracked a problem that had stumped cryptographers for decades. The idea of digital money—convenient and untraceable, liberated from the oversight of governments and banks—had been a hot topic since the birth of the Internet. Cypherpunks, the 1990s movement of libertarian cryptographers, dedicated themselves to the project. Yet every effort to create virtual cash had foundered. Ecash, an anonymous system launched in the early 1990s by cryptographer David Chaum, failed in part because it depended on the existing infrastructures of government and credit card companies. Other proposals followed—bit gold, RPOW, b-money—but none got off the ground.

One of the core challenges of designing a digital currency involves something called the double-spending problem. If a digital dollar is just information, free from the corporeal strictures of paper and metal, what’s to prevent people from copying and pasting it as easily as a chunk of text, “spending” it as many times as they want? The conventional answer involved using a central clearinghouse to keep a real-time ledger of all transactions—ensuring that, if someone spends his last digital dollar, he can’t then spend it again.

The ledger prevents fraud, but it also requires a trusted third party to administer it. Bitcoin did away with the third party by publicly distributing the ledger, what Nakamoto called the “block chain.” Users willing to devote CPU power to running a special piece of software would be called miners and would form a network to maintain the block chain collectively. In the process, they would also generate new currency.

Transactions would be broadcast to the network, and computers running the software would compete to solve irreversible cryptographic puzzles that contain data from several transactions. The first miner to solve each puzzle would be awarded 50 new bitcoins, and the associated block of transactions would be added to the chain. The difficulty of each puzzle would increase as the number of miners increased, which would keep production to one block of transactions roughly every 10 minutes. In addition, the size of each block bounty would halve every 210,000 blocks—first from 50 bitcoins to 25, then from 25 to 12.5, and so on. Around the year 2140, the currency would reach its preordained limit of 21 million bitcoins.

When Nakamoto’s paper came out in 2008, trust in the ability of governments and banks to manage the economy and the money supply was at its nadir. The US government was throwing dollars at Wall Street and the Detroit car companies. The Federal Reserve was introducing “quantitative easing,” essentially printing money in order to stimulate the economy. The price of gold was rising. Bitcoin required no faith in the politicians or financiers who had wrecked the economy—just in Nakamoto’s elegant algorithms. Not only did bitcoin’s public ledger seem to protect against fraud, but the predetermined release of the digital currency kept the bitcoin money supply growing at a predictable rate, immune to printing-press-happy central bankers and Weimar Republic-style hyperinflation.

Nakamoto himself mined the first 50 bitcoins—which came to be called the genesis block—on January 3, 2009. For a year or so, his creation remained the province of a tiny group of early adopters. But slowly, word of bitcoin spread beyond the insular world of cryptography. It has won accolades from some of digital currency’s greatest minds. Wei Dai, inventor of b-money, calls it “very significant”; Nick Szabo, who created bit gold, hails bitcoin as “a great contribution to the world”; and Hal Finney, the eminent cryptographer behind RPOW, says it’s “potentially world-changing.” The Electronic Frontier Foundation, an advocate for digital privacy, eventually started accepting donations in the alternative currency.

The small band of early bitcoiners all shared the communitarian spirit of an open source software project. Gavin Andresen, a coder in New England, bought 10,000 bitcoins for $50 and created a site called the Bitcoin Faucet, where he gave them away for the hell of it. Laszlo Hanyecz, a Florida programmer, conducted what bitcoiners think of as the first real-world bitcoin transaction, paying 10,000 bitcoins to get two pizzas delivered from Papa John’s. (He sent the bitcoins to a volunteer in England, who then called in a credit card order transatlantically.) A farmer in Massachusetts named David Forster began accepting bitcoins as payment for alpaca socks.

When they weren’t busy mining, the faithful tried to solve the mystery of the man they called simply Satoshi. On a bitcoin IRC channel, someone noted portentously that in Japanese Satoshi means “wise.” Someone else wondered whether the name might be a sly portmanteau of four tech companies: SAmsung, TOSHIba, NAKAmichi, and MOTOrola. It seemed doubtful that Nakamoto was even Japanese. His English had the flawless, idiomatic ring of a native speaker.

Perhaps, it was suggested, Nakamoto wasn’t one man but a mysterious group with an inscrutable purpose—a team at Google, maybe, or the National Security Agency. “I exchanged some emails with whoever Satoshi supposedly is,” says Hanyecz, who was on bitcoin’s core developer team for a time. “I always got the impression it almost wasn’t a real person. I’d get replies maybe every two weeks, as if someone would check it once in a while. Bitcoin seems awfully well designed for one person to crank out.”

Nakamoto revealed little about himself, limiting his online utterances to technical discussion of his source code. On December 5, 2010, after bitcoiners started to call for Wikileaks to accept bitcoin donations, the normally terse and all-business Nakamoto weighed in with uncharacteristic vehemence. “No, don’t ‘bring it on,’” he wrote in a post to the bitcoin forum. “The project needs to grow gradually so the software can be strengthened along the way. I make this appeal to Wikileaks not to try to use bitcoin. Bitcoin is a small beta community in its infancy. You would not stand to get more than pocket change, and the heat you would bring would likely destroy us at this stage.”

Then, as unexpectedly as he had appeared, Nakamoto vanished. At 6:22 pm GMT on December 12, seven days after his Wikileaks plea, Nakamoto posted his final message to the bitcoin forum, concerning some minutiae in the latest version of the software. His email responses became more erratic, then stopped altogether.

Andresen, who had taken over the role of lead developer, was now apparently one of just a few people with whom he was still communicating. On April 26, Andresen told fellow coders: “Satoshi did suggest this morning that I (we) should try to de-emphasize the whole ‘mysterious founder’ thing when talking publicly about bitcoin.” Then Nakamoto stopped replying even to Andresen’s emails. Bitcoiners wondered plaintively why he had left them. But by then his creation had taken on a life of its own.

Lee’s Art of Governance


By Jamari Mohtar

Across the Straits

Focus Malaysia, Sep 23, 2017

Art of Governance

If you want to see the art of governance in action, watch the annual National Day Rally (NDR) speech of Singapore’s prime minister Lee Hsien Loong every August.

In that speech, he will give a general report card on Singapore, lay out some policy prescriptions of immediate priorities that will soon be implemented, freely admitting the inadequacy of some measures that had been implemented and share his views on some pertinent long-term challenges facing the republic, which keep Singaporeans in tune with what to expect in the future.

Analysts say that the NDR is the equivalent of the annual State of Union Address of a US president. But the US version in my view is so officious, so proper and so paternalistic that it looks like the president is talking down on the members of Congress.

Just compare and contrast Obama’s State of Union Address with his acceptance speeches during the National Democratic Party Convention in 2008 and 2012. At the Convention, he spoke with candour, light heartedly and peppered his speech with humour, even for serious issues.

He admonished, cajoled and pleaded his case in a conversational style not only to his Democrats’ constituents at the convention but also Americans at large. He did not talk down but rather level with them.

The NDR is like the Convention’s speeches of Obama with three differences – the latter can be seen as opportunistic because it is election time whereas Lee’s NDR is free from election gimmicks; Lee is a veteran at it, having been the PM for 13 years while Obama had only two shots at delivering his acceptance speeches because of term limit; and the live audience of Obama comprises Democratic politicians and their supporters, whereas in the case of NDR, a cross-section of Singaporeans from the mighty to the ordinary, like the taxi driver, are invited as the live audience.

I can’t help laughing at the way the Singapore premier used humour to convey the important message of what more needs to be done in the serious business of safeguarding the country from terrorists’ threat during his NDR speech on August 20.

“We are making ‘every lamppost a smart lamppost’.” Hearing it out of context, you may wonder how else can one make a naturally dumb lamppost smarter, and thereby may conclude that this is the famous kiasu-ness of Singaporeans exhibited at the highest level.

However, seeing it in the proper context of his speech it means he is creating an awareness of what the drive towards the goal of a Smart Nation entails by drawing their attention to the following:

  • Admission of the mistake of not bringing all the different systems of the country’s network of sensors together by making them “talk” to each other, despite the natural advantage of the republic’s compactness, high connectivity and digitally literate population; and
  • Open-mindedness of accepting a criticism that despite a reputation as one of the safest cities in the world, other cities were ahead of Singapore when it came to using IT to make a city safe.

The city-state’s pioneering network of sensors began some time ago when the Public Utilities Board installed sensors to detect water levels in drains to predict the likelihood of flood; the Land Transport Authority’s cameras to monitor traffic conditions and deter illegal parking; the CCTV systems of hotels, shopping centres and office buildings; and the police’s CCTVs at the Housing Development Board’s void decks and lift landings to deal with loan sharks.

“And it has worked. We see fewer cases of “owe-money-pay-money” now. They do not paint your door but I just read in the newspapers the “owe-money-pay-money” has gone online now. But at least the physical harassment is down. Residents are greatly relieved,” Lee said.

Singapore paid a heavy price on this slackness of not making the different systems of sensors to integrate with each other when the Little India riot of Dec 2013 occurred with the authorities being caught a little flat-footed – the first riot since the early 1960s.

Since then progress has been made and Singapore is now building an integrated national sensor network in which “every lamppost is a smart lamppost” where it can mount different types of sensors.

The novelty of a smart lamppost lies in the analysis of the combined data yielded by each lamp post by using artificial intelligence (AI) to automatically flag when something unusual is happening.

“So if I have 10,000 cameras, I do not need 1,000 people watching those cameras. I need maybe just 10 people. Each person can watch 1,000 cameras and if the AI detects that something funny is happening, it will pop up and the man can pay attention and a response can be directed. So one day if we have an incident like the Boston Bombings, then the Home Team can assess the situation quickly and respond promptly, or even pre-empt it from happening,” added Lee.

Another instance of technology not “talking” to each other highlighted by Lee is in electronic payments. Citing China as the most advanced with e-payments, he shared a story on how a Singapore cabinet minister was caught “flat footed” in China when he wanted to pay cash for chestnuts from a roadside hawker. The hawker rejected the cash, gave the minister a quizzical look and pointed to a QR code for WeChat Pay.

In the major Chinese cities, cash has become obsolete, even debit and credit cards are becoming rare. Everyone is using WeChat Pay or AliPay and these apps are linked to one’s bank account. To pay someone money, you just use your hand phone, scan QR Code of that someone and voila, the payment is effected. And these apps can be used for nearly all payments.

“So when visitors from China find that they have to use cash here, they ask: how can Singapore be so backward?” quipped the prime minister.

In Singapore, with too many different schemes and systems of e-payments that do not talk to one another, people have to carry multiple cards and businesses have to install multiple readers – inconvenient for consumers and costly for businesses. As a result, most Singaporeans still prefer the use of cash and cheques – six in ten transactions are in cash and cheques.

A single unified card reader

But with the Monetary Authority of Singapore (MAS) having simplified and integrated the different systems into one, the city-state now has one single unified terminal that can read different cards.

MAS and the banks have also rolled out a new service since July 10, called PayNow that links mobile phone number to bank account which is basically a peer-to-peer funds transfer service.

Lee explained this very simply: “So you use your app you send $20, you know his phone number, you send it to him, it pops up on his account. It is done. Different bank, notwithstanding, money goes across. Does not matter if the bank is different.

“In fact, you do not have to know his bank account number, or which bank he is using. Soon you will be able to use QR codes too. It is convenient, it is cheap. It is safe. There is no credit card fee. So next time I am at a hawker centre, I look forward to paying for my meal with PayNow. Then I will know it is fully working.”

Jamari Mohtar is a veteran journalist who used to live and work in Singapore. Comments:

The Day of Arafah: The impact of calendars on rites of worship

By Jamari Mohtar

IN ISLAM, a new day begins on the onset of Maghrib when the sun sets. It’s a time when people are still wide-awake and starting to chill out after a long day at work. It’s an occasion for relaxing and spending quality time with members of the family whom you’ve not seen the whole day because of your work commitments. Muslims welcome a new day with the Maghrib prayer.

Contrast this with a new day in the Gregorian system. Many people, even those in the West, thought a new Gregorian day begins when they first open their eyes in the morning at about 6 or 7 after a restful six to eight hours of sleep.

In actual fact, a new day in the Gregorian system begins at midnight when the majority of people on earth are in a deep comatose sleep – what a way to welcome a new day!

Of course the exception will be those owlish people or musang (fox) folks as they are called in our part of the world (some say they are like Musang King – a class of branded durian, ahem!). They will be wide-awake to welcome the Gregorian new day, as they stay alive and kicking all night long to the beat of Lionel Ritchie’s song.

That is why in Islam, all festivals begin a day before their allotted time in the Gregorian calendar, when the sun sets in line with this concept of a new day taking place as the sun sets.

Take the case of Eidul Adha (Feast of the Sacrifice) known as Hari Raya Haji in the Southeast Asian region. If you look at your Gregorian calendar, Sep 1, 2017 is listed as Hari Raya Haji, along with a small print of 10 Zulhijjah, which denotes its counterpart in the Hijriah taqwim (Islamic calendar).

This is not exactly correct because a part of the previous day i.e. 31 August (the part after the sun has set) is actually the start of 10 Zulhijjah and that’s why the Takbeer Muqayyad (takbeer after the five daily prayers at the mosque) for Eidul Adha began on August 31 after the Maghrib prayer.

Apart from this difference on the start of a new day, the other confusion when discussing the differences between the Gregorian and Islamic calendars lies with the meaning of the word ‘day’.

A day in its narrow sense means a time period, which starts when the sun rises (brightness) and ends with the setting of the sun (darkness). It is roughly a 12-hour time interval. The other 12-hour interval begins with darkness and ends with brightness, or what we call night.

But a day in its broad sense could also mean the whole day encompassing both night and day – a 24-hour interval. This distinction between a narrow day (12-hour interval) and a broad day (24-hour interval) must always be kept in mind, otherwise you won’t be able to follow the subsequent arguments in the following paragraphs of this article.

Our familiarity with the Gregorian calendar – the only calendar most of us have known since our birth – has sometimes caused some confusion about some aspects of Islamic worship that is based on the Hijriah taqwim.

But before going into this confusion, let’s first pose a question – why does the Islamic calendar begin a new day (day as in the 24-hour interval) at night?

The answer is simply the Hijriah taqwim is a lunar-based calendar where a new day in the broad meaning of the word begins at night with a moonrise i.e. the rising of the moon above the horizon. The night of this broad day ends with a moonset i.e. the setting of the moon below the horizon. This is the first stage of the 12-hour interval of the broad day we called night in the Hijriah taqwim.

As the moon exits the horizon (moonset), sunrise comes to the fore known as Syuruk in Islamic calendar, which starts the other phase of the 12-hour interval we called day in the narrow meaning of the word. The narrow day of this broad day ends when the sun sets, known as Maghrib in the Islamic calendar, and the whole 24-hour cycle is repeated for the next broad day.

Now whether this moonrise coincides exactly with a sunset, or a moonset coinciding exactly with a sunrise is for the experts in astronomy or its counterpart in Islam, ilmu falak to answer.

My point here is to show that while the Islamic calendar is consistent in defining day and night with the movement of the moon and the sun, the solar-based Gregorian calendar is not, because it starts a new day at midnight, not at sunrise.

What do you call a midnight in relation to the movement of the sun and the moon? The meaning of a narrow day (brightness to darkness) is rendered meaningless in the Gregorian system because a new broad Gregorian day starts in total, utter and lonely darkness at 12 midnight and thus, it does not fit into the definition of a narrow day. It also does not fit into the definition of a night (darkness to brightness) because the other portion of the 12-hour interval of the Gregorian calendar starts at 12noon.

The choice of midnight to start a new day is thus very arbitrary and herein, lays the confusion I have alluded to earlier.

“Blessed is He who has placed in the sky great stars and placed therein a [burning] lamp and luminous moon. And it is He who has made the night and the day in succession for whoever desires to remember or desires gratitude.” AlQuran, Surah AlFurqan (25): 61-62

The Day of Arafah made simple

The Day of Arafah in all Ahadith refers to the day in the narrow sense of the word, i.e. from the time the moon sets at Arafah, up to when the moon rises there, which is a 12-hour interval.

Within this 12-hour interval are the rites of Standing (Wukuf) at Arafah. That is why the Day of Arafah is also known as the Day of Wukuf. But this is where the mistake arises when you equate the Day of Arafah with the Day of Wukuf because the Wukf rites officially begin on the onset of Zuhr with the performance of the jama taqdim prayers (the combined and shortened Zuhr and Asr prayers.) This is roughly at about 12 noon plus in Arafah.

This is followed by the khutbah wukuf/Arafah (the wukuf/Arafah sermon) and the climax of the Wukuf rites is the standing (wukuf) at Arafah outside the tent where supplications of the mutawiff (hajj guides) will be greeted with chorus of Aamiin and accompanied by sobs and teary eyes of the pilgrims. The Wukuf rites end in the wee hours of 10 Zulhijjah when the fajr azan (the call to the morning prayer) commences.

From the above explanation, one can see that when the moon sets in Arafah, that marks the beginning of the Day of Arafah but it is not yet the Day of Wukuf. Only on the onset of the time of Zuhr, the rites of Wukf begin which means it is at that point that the Day of Arafah and the Day of Wukf are synonymous.

This synonymity ends with a moonrise at Arafah which signals the end of the Day of Arafah, as the rising moon heralds a new day, 10 Zulhijjah – the Day of the Feast of the Sacrifice or Hari Raya Haji. At this juncture, while the Day of Arafah has ended, the Night of Wukuf or the Night of the Feast of Sacrifice (they are synonymous) begins and one can still perform the Wukuf rites if one hasn’t done so until the onset of the fajr azan on 10 Zulhijjah.

The Significance of the Day of Arafah

The Day of Arafah, according to a soheh Hadith, is a day of forgiveness from sins and freedom from the Hell-Fire for the people who are present in the plain of Arafah.

Aisyah (ra) narrated the Messenger of Allah (pbuh) saying: “There is no day on which Allah frees more people from the Fire than the day of Arafah. He comes close and expresses His pride to the angels saying, ‘What do these people (the Hajis) want?’” (Muslim).

Obviously, this hadith refers to the pilgrims. And from this hadith, some make the erroneous conclusion that the maqbulah (the granting of supplications easily by Allah) nature of a doa (supplication) during the Day of Arafah is limited to the pilgrims only.

The fact that all Muslims and not only pilgrims can take advantage of this high-speed connection between oneself and Allah (the maqbulah nature of doa) is attested by this soheh hadith:

Prophet Muhammad (pbuh) said: “The best supplication is the supplication on the Day of Arafah” and the best which I and the Prophets before me have said (is):

لَااإِلَهَ إِلَّا  اللهُ ، وَحْدَهُ لَا  شَرِيكَ لَهُ ، لَهُ الْمُلْكُ وَلَهُ الْحَمْدُ ، وهُوَ عَلَى كُلِّ  شَيْءٍ قَدِيرٌ

(transliteration: laa ilaaha ill-allaahu, waḥdahu laa shareeka lah, lahul-mulku wa lahul-ḥamdu, wa huwa ‛alaa kulli shay’in qadeer)

None has the right to be worshipped except Allah, alone, without partner. To Him belongs sovereignty and all praise and He is over all things omnipotent.” (Tarmizi)

Notice that the above Hadith does not make a distinction between pilgrims and non-pilgrims. It also does not make a distinction between Arafah and other localities.

Another significance of the Day of Arafah is the fasting on that day. According to a soheh hadith of the Prophet (pbuh), “it (the fasting) expiates the sins of two years: a past one and a coming one.” (Muslim). This fasting is mustahabb – only for the non-pilgrims and not for the Hajis (the pilgrims) because it was not the practice of the Prophet (pbuh) to fast on the day of Arafah during pilgrimage and in another narration, he also forbade doing so.

Mustahabb are actions whose status of approval in Islamic law (ahkam) falls between mubah (neither encouraged nor discouraged) and wajib (compulsory). One definition is “duties recommended, but not essential, fulfilment of which is rewarded, though they may be neglected without punishment”.

Timing of the high-speed connection of supplications

The timing of the high-speed connection of supplications during the Day of Arafah has in recent years generated a controversy in terms of the need to synchronise the local time to be exactly the time of the Day of Arafah at Arafah itself.

This arises with the invention of a smart phone that has an app that could easily convert in the blink of an eye the time at Arafah with respective local times.

So let say a moonset during the Day of Arafah takes place at around 6.30am at Arafah, and since the time difference between Arafah and Malaysia is about 5 hours, the Day of Arafah in Malaysia begins at 11.30am, so says a smart opinion that commensurates with what a smart phone app says.

Smarter still, is the opinion that since wukuf starts at around the time of zuhr in Arafah (let’s say 12.30pm), which is within the Day of Arafah, and thus a double significance since the time of wukuf is also the best time to supplicate, so 5.30pm Malaysian time is the best time to supplicate.

Smartest still, is the opinion that says since the Day of Arafah ends with a moonrise at about let’s say 6.30pm at Arafah, you can still make supplication that will be easily accepted by Allah before 11.30pm Malaysian time.

Equipped with the understanding of the Hijriah taqwim as elucidated earlier in this article, you will realise the folly of such smart arguments because by 11.30pm Malaysian time, the Day of Arafah has already ended in Malaysia and Malaysians are already celebrating the Feast of Sacrifice by chanting the Eidul Adha takbeer, although at Arafah, the Day of Arafah is still on.

I have touched on this issue in my earlier article on celebrating Eidul Adha on a different day in different localities with different authorities. The day of Arafah and the fast thereon is always on 9 Zulhijjah, which is determined for each country according to their sighting of the new moon of Zulhijjah as commanded by the Prophet (pbuh).

It is not essential to follow the people of Mecca when there are differences in the sighting of the new moon. This also means that when there are no differences in the sighting of the new moon with Mecca, you celebrate the 9 Zulhijjah on the day the Meccans celebrate it but you don’t have to sychronise your local time with the time in Mecca to get exactly the same timing of the Day of Arafah or Wukuf in Mecca.

Otherwise you are making a mockery of the Hijriah taqwim and also ibadah like the five daily prayers whose timing is always based on the position of the sun in your local areas and not in Mecca or Arafah.

So in simple terms, this means the Day of Arafah in Malaysia will always begin on the 9 Zulhijjah when the moon sets in the horizon of Malaysia (about 7am) even though at Arafah this will be about 2am. Similarly, the wakaf rites in Malaysia, and hence the best time to supplicate, will be around the time of Zuhr in Malaysia although at Arafah it is just about 8.15am.

When the Prophet s.a.w decreed that performance of Korban is dependant on the sighting of the new moon, the Prophet s.a.w is aware that his decree would mean Eidul Adha, and hence the day of Arafah could fall on different days in different locations.

This is now easier to grasp but what is not easy to grasp is this injunction also means that when the Day of Arafah falls on the same day in different locations, the time difference between the locations and Mecca is not to be taken into account for otherwise it will affect the sense of day and night of a taqwim in a particular location which will definitely affect ibadah like the five daily prayers.

Wallahu a’lam bi shawab

It’s all about investing in technology!

When you ask the critics of crypto currencies on their opinion of these digital monies – the most famous being bitcoin – you’ll find that they are still mired on the issues of their safety and lack of intrinsic value as a secure system of payment and as an investment instrument.

In all likelihood, these critics – which include professors of economics and economic analysts – will invoke the famous greater fool theory, which asserts that the price of an object is determined not by its intrinsic value, but rather by irrational beliefs and expectations of market participants.

Simply put, they think a rational buyer can justify the price of these cryptos under the belief that another party is willing to pay an even higher price.

These had been my experience when discussing about bitcoin with academics and economists, with the die-hard gold enthusiasts among them insisting that there will be injustices in any system of currency that is not backed by gold.

But gold in itself has no intrinsic value. It’s just a piece of shiny metal. Its value is derived from everyone just agreeing it has value, and therefore it becomes valuable.

Be that as it may, gold has certain characteristics that make it a better ‘store of value’ though its role as a medium of exchange had long gone after what President Nixon had done to the Bretton Woods financial order in 1972 – cutting off the convertibility of the dollar with gold.

Turns out, the characteristics that have made gold a better store of value and medium of exchange – scarcity, malleability, stability, doesn’t degrade, easy to recognize and very importantly, hard to counterfeit – are also applicable to bitcoins.

While gold is limited by geography, bitcoin is limited by an algorithm to 21 millions. It can be made into smaller units without losing unit value (1 bitcoin = 100,000,000 satoshis – the smallest unit into which a bitcoin can be broken down, which is also why one can buy less than one bitcoin at a time). The underlying technology behind its creation – distributed blockchain ledger also known as the Bitcoin Protocol – is very stable with no hacking, counterfeiting and manipulation to date.

To top it all, unlike gold, you can move bitcoins to any place on earth within minutes, no matter how big or small the amount and that’s why many people say that bitcoin is not just digital gold, but a better version of gold.

And technology has already empowered a crypto currency, ether, with scalability – the ability for you to move it to any part of the world within seconds instead of minutes via its ethereum blockchain technology (so ethereal!).

A 2015 report by the UK Government Chief Scientific Adviser on Distributed Ledger Technology: beyond block chain has asserted that “algorithms that enable the creation of distributed ledgers are powerful, disruptive innovations that could transform the delivery of public and private services and enhance productivity through a wide range of applications.

“In distributed ledger technology (DLT), we may be witnessing one of those potential explosions of creative potential that catalyse exceptional levels of innovation. The technology could prove to have the capacity to deliver a new kind of trust to a wide range of services.

“As we have seen open data revolutionise the citizen’s relationship with the state, so may the visibility in these technologies reform our financial markets, supply chains, consumer and business-to-business services, and publicly-held register,” adds the report.

Where lie the injustices?

Now, let us address the gold purists’ argument that there will be injustices in any system of currency that is not backed by gold.

In 2013, bitcoin made headlines as it went from USD13 to USD1,157 (an 8,800% gain). Its meteoric rise was fueled by the economic crisis in Cyprus where its banking system had been battered by bad loans.

In order to save the banks, the government confiscated as much as 47% of people’s wealth via so-called “bail-ins.” As a result, people scurried to move their money outside traditional currencies and bitcoin soared.

In 2016, when Indian Prime Minister Narendra Modi banned 86% of all Indian paper money overnight, Indians turned to bitcoin.

Meanwhile, as the bolívar crumbled in 2016 as a result of the Venezuelan government deflating its currency and removed half of all paper money from circulation, Venezuelans turned to bitcoin.

When China tightened its stranglehold on capital outflows in the latter half of 2016, it caused a surge of bitcoin buying. It helped send bitcoin soaring as much as 91% at the end of the year.

All the above events, which can be summed up as Currency Crises and the War on Cash, obviously have resulted in some injustices. And crypto currency like bitcoin had mitigated some of these injustices.

So let’s ask the gold purists again: “Where lie the injustices of a currency, albeit a crypto currency, that is not backed by gold which in turn does not have an intrinsic value like gold?” They have been surely fed with the myth of the intrinsic value of gold.

When it comes to the crunch, as the above disparate events in history had shown, people no longer seek safe haven in gold but bitcoin.

The article below will demystify the accelerated increase in the prices of some crypto currencies by arguing that it is technology that has made these cryptos valuable despite lacking intrinsic value.

This is better than gold, which is not backed by technology but by a derived value of people just agreeing that it is valuable, and presto it becomes valuable.

Distributed Ledger Technology (DLT)

One technology that is now like the new kid on the “blockchain”, DLT (Distributed Ledger Technology) will become mainstream within the next few years, as predicted by many experts.

According to a 2016 report by the World Economic Forum on The future of financial infrastructure: An ambitious look at how blockchain can reshape financial services:

  • More than 24 countries are currently investing in blockchain
  • More than 2,500 patents filed over the last 3 years
  • More than 90 corporations have joined blockchain consortia
  • 80% of banks predicted to initiate DLT projects by 2017
  • Venture capital has invested over 4 billion in blockchain technology over the past 3 years
  • More than 90 central banks have engaged in DLT discussions worldwide

Singapore’s central
bank and financial regulatory authority (MAS) is embarking on a project to evaluate the implications of a tokenized Singapore dollar (SGD) on an ethereum-based blockchain distributed ledger with potential benefits to its financial ecosystem.

The objective is to develop a peer-to-peer payment system prototype using DLT in which
bank users can exchange currency with one another without lengthy processing times, expensive processing fees, or intermediaries.

If completed successfully and later implemented, Project Ubin, as it is known, will signify the republic would be the first major financial centre in Asia to fully explore the benefits of DLT across a broad set of transformative applications.

Since Malaysia is the only country in the world espousing the establishment of a free digital trade zone – the brainchild of premier Najib Razak – a synergy in cooperation and collaboration with Singapore on the creation of a global peer-to-peer payment system that would eliminate a trusted third party would be a novel thing to do.

With a trusted third party gone, you would also eliminate all the past and present scandals and crooks in the financial system masquerading or embedding themselves, as part of the trusted third party!



It’s all about investing in technology!

By Jamari Mohtar

Across the Straits

Focus Malaysia | Sept 2, 2017


While one would expect the custodians of fiat money, that is, banks and central banks in particular, to oppose the existence of crypto currencies – the most famous being bitcoins – the irony is they are actually seeing opportunities in these cryptos especially in the underlying distributed blockchain ledger technology behind their creation.

The Monetary Authority of Singapore (MAS), the republic’s central
bank and financial regulatory authority, is embarking on a project to evaluate the implications of a tokenized Singapore dollar (SGD) on an ethereum-based blockchain distributed ledger with potential benefits to its financial ecosystem.

The objective is to develop a peer-to-peer payment system prototype using distributed ledger technology (DLT) in which
bank users can exchange currency with one another without lengthy processing times, expensive processing fees, or intermediaries.

Three innovations that had begun with the creation of bitcoin have paved the way for DLT to emerge:

  • Peer-to-peer networks: In this model, every peer in the network is a server and client, both supplying and consuming resources. This may facilitate, for example, the creation of a currency without a privileged trusted third party, amongst other types of decentralised financial interactions.
  • Public key cryptography: This is a method for verifying digital identity with a high degree of confidence, enabled by the use of private and public keys. Cryptography enables the individual identification and exchange of bitcoin among users.
  • Consensus algorithms: This ensures agreement between parties on a network can help validate the data’s authenticity as well as transactions and control when it can be written into the system. This prevents double spending by ensuring chronological recording of data.

In June, MAS issued a report, The Future is Here, in which it announced Project Ubin: SGD on Distributed Ledger that was started on Nov 26. Its goal is to 
reduce risk and costs for cross-border settlements of payments and securities. Cross-border operations require international cooperation on standards, the ability to identify payers and payees, and systems of adequate scale.

Project Ubin is implemented in phases, starting with a DLT for domestic payments in phase 1. Subsequent phases will explore cross-border payments in a single currency, settling different currencies and culminate with risk free cross currency securities settlements.


This concept of an SGD-on-ledger is to distinguish it from existing forms of digital central bank money such as the deposits that banks hold at the MAS, which are used to make payments via MEPS+.

MEPS+ or MAS Electronic Payment System is a Real-Time Gross Settlement (RTGS) system that supports large-value local currency interbank funds transfers and the settlement of script less Singapore Government Securities (SGS) between MEPS+ participants, subject to the availability of funds and securities.

In essence, the SGD-on-ledger can be seen as a specific use coupon that is issued on a one-to-one basis in exchange for money. The coupons have a specific usage domain – the settlement of interbank debts – but no value outside of this. One is able to cash out by exchanging the coupons back into money later.

One may think of these as the coupon booklets at fun fairs: visitors can purchase them to be spent on games and food within the fairgrounds only.

SGD-on-ledger has three useful properties:

  • Unlike money in bank accounts, there is no interest on the on-ledger holdings because of the speed of the transaction. The absence of interest calculations reduces the complexity of managing the payment system.
  • To ensure full-redeem ability of the SGD-on-ledger for money, each token is fully backed by an equivalent amount of SGD held in custody. This means that the overall money supply is unaffected by the issuance of the on-ledger equivalents since there is no net increase in dollar claims on the central bank.
  • SGD-on-ledger is limited use instruments and can be designed with additional features to support the use case – such as security features against misuse.

While Phase 1, which includes developing proof-of-concept
to conduct inter-bank payments through DLT had been completed with flying colour, the other phases are still on going.

Moving forward

If completed successfully and later implemented, it will signify the republic would be the first major financial centre in Asia to fully explore the benefits of DLT across a broad set of transformative applications.

So what does all this mean when you see the frenzied transactions in crypto currency trading?

It means you are buying into future technology with varied applications. The ethereum blockchain, somewhat similar to the Bitcoin Protocol is the technology used to create the crypto currency, ether.

And because it has scalability – the speed to process transaction in seconds instead of minutes – the price of ether has risen faster than bitcoin, prompting experts to describe it as the new bitcoin.

But critics of crypto currency, including professors in economics in their rigid thinking, have no other words to describe this rapid increase in price other than painting a doomsday scenario of a bubble in the making, despite the many bubbles that bitcoin has undergone since 2013. They should instead embark on a rethinking of the phenomenon of bubbles in economics, just like the practitioners of economics – the MAS bankers – have exhibited in their rethinking of crypto currencies.

It will do them a lot of good to pay heed to a 2015 report by the UK Government chief scientific adviser on DLT: beyond block chain which asserts that “algorithms that enable the creation of distributed ledgers are powerful, disruptive innovations that could transform the delivery of public and private services and enhance productivity through a wide range of applications … The technology could prove to have the capacity to deliver a new kind of trust to a wide range of services.”

In essence, this would mean doing away with the present arrangement of a trusted third-party intermediary to cut meaningful cost and enhance speed in a trustless peer-to-peer system that can be trusted. If this is confusing, it just means you can have a transaction with anyone in the world, even someone you don’t trust, but you can be assured of the trusted nature of the transaction.

Since Malaysia is setting up a free digital trade zone, – a synergy in cooperation and collaboration with Singapore on the creation of a global peer-to-peer payment system that would eliminate a trusted third party would be a novel thing to do.

With a trusted third party gone, you would also eliminate all the past and present scandals and crooks in the financial system masquerading or embedding themselves, as part of the trusted third party!

Jamari Mohtar is a veteran journalist who used to live and work in Singapore. Comments: