Welcome to 2022’s first edition of the TSC member profile series!
In 2021 you became acquainted with the first four members who joined the BSV Technical Standards Committee (TSC). This year we’ll introduce you to more of the committee members who dedicate their time and expertise to bring together the community to construct BSV blockchain processes and standards.
In the latest edition of our series, we speak to committee member Masumi Hamahira – Executive Advisor for the Islamic Banking Window, MUFG Bank.
Background information on TSC member Masumi Hamahira
| Industries: Banking and Finance Current positions: Executive Advisor for the Islamic Banking Window, MUFG Bank. Bitcoin Association Ambassador for Japan and Malaysia, as well as the banking and finance sectors. Other roles: Global Strategic Planning, Islamic Finance, Derivatives and Corporate Finance About Masumi Hamahira is a veteran financial executive, having spent 22 years working for MUFG – the world’s fifth-largest bank – including in Malaysia. An expert in the requirements of Islamic Finance, Hamahira also serves on the board of directors for the Chartered Institute of Islamic Finance Professionals (CIIFP). Supporting BSV initiatives in his individual capacity (rather than on behalf of MUFG or CIIFP), Hamihara is an initial member of the Bitcoin SV Technical Standards Committee and already serves as Bitcoin Association’s Ambassador for Malaysia. Having relocated from Malaysia to Tokyo, Japan, Hamahira now will also act as a Bitcoin Association Ambassador in Japan (adding to efforts of Ken Shishido, the Association’s first appointed Ambassador for the country). Masumi was selected in Islamica 500 by the World Islamic Economic Forum. He aspires to contribute more significantly to the development of Islamic FinTech, Islamic Project Finance, Sukuk and Islamic Derivatives by sharing industry knowledge with the public. Role within the TSC Masumi joined the TSC during the inception workshop in London in January 2019. He is extremely interested in the governance aspect of the TSC. He wishes to be the bridge between the financial world and the Bitcoin world. He is interested in developing the optimisation and governance of Bitcoin. He is also the Sponsor of the Paymail Working Group. |
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Blockchain for Islamic Finance
At present, Masumi is a PhD Candidate in Islamic Finance at the IIUM Institute of Islamic Banking and Finance, International Islamic University, Malaysia.
‘The Islamic finance industry has a big agenda to adopt fintech to expand their scope, which makes blockchain of great interest,’ he explains. Yet there is a very limited talent pool familiar with blockchain and Islamic finance.
‘By taking on the intersection between the two academically, I’m aiming to become a bridge between them. My research topic is how we can utilise blockchain for Islamic banks’ audits.’
Optimising Islamic finance with blockchain
Masumi explains that Islamic and conventional finance don’t differ much in terms of economics. Where they differ is in the way Islamic finance needs to comply with Shariah, or Islamic Law.
‘Interest is prohibited in the Islamic finance industry, but not profit. In practice, Islamic banks do not give loans, but they do offer Commodity Murabahah. It works like this: The bank buys a commodity and sells it to the customer under the agreement that they will pay for it five years down the line. In the meantime, the customer can sell the commodity to the market. In economic terms it works similar to a loan, yet it complies with Shariah.’
The sequence of events is therefore crucial to determining compliance. If the customer sells the commodity first and buys it later, it would breach Shariah. This is where he sees blockchain fitting in.
‘Blockchain’s time-stamped ledger is the key to securing the sequence of trading – which is otherwise a very messy process for auditors. The transparency and immutability of the blockchain’s ledger also means that auditors can’t be cheated, which ensures a trustworthy audit. Once Islamic finance adopts blockchain it will result in a cleaner and a more beautiful implementation of Islamic law.’
How blockchain makes Islamic finance more competitive
Masumi relates how he discovered the valuable contribution that blockchain could make to Islamic finance.
‘A few years back, the Japanese bank I’m working for was starting to expand into Malaysia, an Islamic country. We realised that we would have to comply with Islamic finance, which focusses on the sequence of commodity transactions. Because it was such a messy process to check the sequence of events in each transaction, we had to hire an additional Islamic banker to take on the administrative burden. The additional cost made it difficult to compete with conventional financing.’
That’s when he came across talks by Dr Craig Wright explaining how blockchain could be employed by the financial industry and realised that blockchain could help decrease their costs while assuring the highest level of compliance.
Technological innovation and the cannibalism dilemma
Although blockchain and Islamic finance is a match made in heaven, Masumi is well aware that innovative technology often makes incumbent industries feel threatened.
‘Let’s take the example of the motorcar champion, Toyota,’ he demonstrates. ‘Although they’re an extremely prosperous business, the sudden invention of flying cars could cannibalise their business.’
Within the banking industry, there are people who fear that fintech will cannibalise their business opportunities. According to him, blockchain shouldn’t be viewed as a threat to conventional finance as it could save a tremendous amount of costs and allow them to expand into other sectors.
‘My message to the conventional finance industry is that we don’t have to fight fintech. We can find a good synergy between banking and the blockchain industry. My role is to educate traditional finance on how they can utilise blockchain to prosper.’
Masumi mentions peer-to-peer banking as an example.
‘It would open up new horizons for individual finance. At the same time, most people would still prefer to have a trusted third-party involved, an entity they know and trust, to facilitate the process in some way. Banks can expand into providing peer-to-peer banking services, from platforms to insurance – they don’t have to be excluded from it.’
Motivation for joining the TSC
‘The way I see it, blockchain will change the world,’ Masumi declares. But before we can get there, he sees several issues we need to overcome. He considers his experience a good contribution to the team effort.
‘BSV engineers are excellent, but their focus is on coding and computer science. Someone needs to bring to the table their experience in the banking industry. While I’m not a developer, I have significant experience in finance and the banking industry, so I joined the BSV blockchain’s TSC.’ His experience in working with limited resources fits in well with the TSC – a fledgling organisation tasked with huge ambitions.
The TSC’s 2022 recruitment campaign
With four of the TSC members retiring from their positions in 2022, the committee is inviting applications from the BSV blockchain community and beyond. Who would Masumi like to consider applying for the role?
‘There are three types of people we need on the TSC. Firstly we need people who are technically and professionally adept with things like on-chain swaps, SPV, DeFi and a vision for Web 3.0. The second category is people who are familiar with regulation and standards setting organisations. The third group who would be valuable to have on the TSC are academics who are familiar with and interested in blockchain and financing.’
Masumi’s wishes for the TSC’s future
In the long term, Masumi wants to see people from all over the world attracted to the standards set by the Bitcoin SV technical standards programme. In order to get there, he believes it fundamental for the committee to support the development of a complete set of core technical standards to illustrate the bigger picture of each feature.
‘If we want to illustrate tokenisation’s potential, for example, we need to have standards to capture its infrastructure all the way to its application. This will give us a sort of “menu” that will make it easier for people to understand the potential of BSV. It will also make it much easier to engage with governments and regulators.’
