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10-07-2019 13:38

Address by the Minister of Finance Mr Harris Georgiades at the Cyprus Blockchain Summit, in Nicosia

Let me first thank you for your kind invitation and for the opportunity to address such a distinguished audience. And let me say that this conference comes at a perfect timing; just days after the cabinet adopted the first Blockchain National Strategy, a result of a common initiative with the Presidency of the House of Representatives. Indeed bringing Blockchain to the forefront of the agenda has been a priority for Cyprus for the past year.

We are already experiencing the digital revolution in every spectrum of our personal and professional life. In fact, the new wave of technological progress will probably be stronger and faster than anyone can imagine. The opportunities are immense but equally significant will be the challenges, not least on the labor market.  But one thing is for sure: Technological progress cannot be stopped. It is already happening.

And this is exactly why I feel that it is imperative that we should intensify the political and social dialogue in an effort to incorporate the technological challenge into a new meaningful, political narrative.

I am also of the view that the challenges and opportunities which lie ahead highlight the role and the significance of the EU. It is an illusion to believe that the member-states of the EU will be able to maximize the benefits and opportunities and to minimise the risks, with a go it alone approach. We must work together, at EU level, removing barriers, ensuring access and connectivity, promoting e-society and investing in world-class ICT research and innovation. The new EU budget should be a tool in this direction.

But also at national level, efforts should be stepped-up. Even countries which cannot hope to be leaders in the designing and developing the new technologies, should aim to be at the forefront of using and utilizing the new technologies. This is where I see opportunities for Cyprus. And this is exactly where our first Blockchain national strategy fits in. 

Digital Transformation, including Blockchain applications, probably offers the most effective and quick way to public sector reform. It may also be the means to increase productivity in key sectors of our economy. It could facilitate speedy execution of transactions and contracts; it could enhance transparency; it could help establish a secure environment for the exchange of information.  It could be a tool for government agencies, regulators, financial institutions, universities and private business.

All of the above relate perfectly with the key objectives of our economic policy, as these have been redefined almost a year and a half ago, at the commencement of the second term of our government. 

Having already tackled the most pressing issues related to the crisis, having restored the soundness of public finances, having seen the economy enjoying solid growth rates since 2015 and with conditions of full employment being round the corner, our current objective is none other than ensuring that growth becomes sustainable. Through reform. Through the broadening of the productive base of our economy. Through investment in technology. Through measures that will boost competitiveness and productivity.   

In short, having dealt with the legacies of the past, we should now look ahead.

And I am delighted that Startups, universities, and technology companies are indeed becoming fast a new important component of economy.

Acknowledging the significance of the knowledge triangle, that is education, research and business, government actions over the last year have included the following:

  • A new governance system for research and innovation which includes the National Board for Research and Innovation and the appointment, for the first time, of a Chief Scientist for Research and Innovation
  • A set of tax incentives for investing in innovative SMEs, including start-ups as well as a start-up visa scheme for allowing talented entrepreneurs from third countries to reside and work in Cyprus, aiming exactly at the development of companies with high growth potential.
  • The revamping of the Research and Innovation Foundation, as the executive arms of the government and the allocation of new sources of funding.
  • A financial commitment of 15 million euros to each of the six Teaming Centres of Excellence for Research and Innovation which have also secured EU funds, under the Horizon 2020 programme.
  • The introduction of legislation to facilitate technology transfer from public universities to the business community and to promote business innovation through university spin-offs.
  • A public investment programme worth hundreds of millions of euros in e-government projects, including e-justice, a new ERP system, tax administration, and e-health.
  • The next important step in this direction is the setting up of a Junior Ministry for Digital Policy and Innovation, which will take over the responsibility which the Finance Ministry has temporarily assumed.  The draft bill is ready and is currently under legal vetting by the Law Office. Hopefully, we shall not face delays, and the new Deputy Minister will take over on January 1st.

The Cyprus Blockchain National Strategy, adopted by the Cabinet on June 18, is part of this broad effort. It is a tangible recognition of the dynamics of new technologies and the opportunities they present when properly exploited.  I should once again thank President Syllouris, the speaker of the House for his initiative and strong support but also a dedicated team of experts from the private sector and academia who have shared their expertise and have joined forces with our own teams in the government in order to draft this action plan. 

The main pillars of the National Strategy are the preparation of a legislative framework and the implementation of pilot use cases for both public sector and the financial sector.

This legislative framework will take into account the European Parliament resolution of October 2018 and will be based on European principles, technology neutrality, promoting innovation so that the private and public sectors can work together effectively and develop successful applications.

Our aim is to be among the first countries to regulate aspects of Decentralized Ledger Technologies in order to create a truly attractive environment, in parallel with all the other factors that make Cyprus an attractive destination for investment and business.

The pilot use cases already under discussion are relevant to the customs department, the department of Land and Registry, shipping, the verification of academic degrees, taxation and customs. Emphasis will also be placed on promoting applications in the financial sector, for example relating to KYC procedures.  

We also look forward to cooperating with the Mediterranean MED& countries for joint applications of the technology. And we shall work for the common utliisation of EU funds, especially in the news EU budget after 2021, where a substantial increase of funds for the digital economy is envisaged.

For us, this marks a new effort. It is a new beginning.

I would like to assure you that our government we will continue doing whatever is necessary to create an environment that favors and facilitates the development and implementation of these new technologies.

Besides, all our efforts aim at establishing a favourable economic environment, offering stability, certainly and opportunities and in this way supporting business and investment activity across the sectors.

And as I have said again on other occasions: We have a plan, let’s stay focused and let’s do the job.

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AM/SCH