ANNUAL REPORT 2021 27 PERFORMANCE BLOCKCHAIN TECHNOLOGY Another significant highlight was MYEG’s development of DeFi solutions in FY2021. In August 2021, MYEG introduced DeFi services, leveraging on the power of blockchain technology to provide accessible, affordable and efficient cryptocurrency services to customers. DeFi uses blockchain technology – in particular, cryptocurrencies and smart contracts – to enable the provision and settlement of transactions without the involvement of conventional financial intermediaries. The first DeFi offering introduced was MYEG Lock-Earn Wallet, which enables individuals and institutions to earn rental fees on their digital assets holdings. As the roll-out progresses from the initial preliminary phase to subsequent stages of commercialisation and implementation, the Group shall continuously ascertain the applicability of all prevailing regulations at every stage, and engage with relevant authorities to ensure compliance at all times. DeFi services make up just one part of a much broader push by the Group to promote greater adoption of digital assets and to harness the transformative potential of blockchain technology. Toward this end, in advancing the Group’s blockchain agenda, in September 2021, MYEG, through its subsidiary Mydigitalcoin Sdn. Bhd., entered into an agreement with Bubi Technologies Co. Ltd. (“Bubi”), Agmo Holdings Sdn. Bhd. (“Agmo”) and Star Jewel Capital Inc. (“Star Jewel”) to regulate the relationship inter se of shareholders and other parties that will become shareholders of Zetrix and MYEG holds 51% of Zetrix. This partnership will facilitate the development of supernodes around the world, with Malaysia to be home to the first supernode known as Zetrix, based on a blockchain system that will ensure data compatibility with China’s national blockchain network, Xinghuo Blockchain Infrastructure and Facility (“Xinghuo BIF”) to enable the introduction of game-changing applications, including in the area of global cross-border supply chain financing and traceability. The Zetrix supernode will offer both a public blockchain network, which is one that is permissionless and open to anyone to participate, as well as a private blockchain network, where participation will be restricted to permissioned entities typically required for B2B use cases, with each network designed to serve distinct purposes. Zetrix will lend itself well to the provision of solutions that have been long and much sought-after in global trade; endto-end product traceability and financing along the entire supply chain, which, in this case, relates to the two-way flow of goods between China and the rest of the world. This represents a particularly timely development in view of the impending commencement of the Regional Comprehensive Economic Partnership (“RCEP”), a free-trade agreement comprising 15-member countries, including China, that collectively account for 30% of global output and 30% of the world population. Verification of product origin and supply chain traceability are among RCEP’s key objectives. In a related development and further cementing MYEG’s key role in driving regional adoption of blockchain innovations through the Zetrix project, MYEG signed on October 2021 a MOU of Strategic Cooperation with the Institute of Industrial Internet and Internet of Things of the China Academy of Information and Communications Technology (“CAICT”). The agreement was signed with the objective to establish Zetrix as the international extension of China’s national blockchain network, Xinghuo. Zetrix is positioned to be a catalyst for blockchain technology adoption and innovation across all business sectors, which will allow and accelerate the adoption of 4IR technologies – Blockchain, Artificial Intelligence (“AI”), Internet of Things, advanced materials and technologies, as well as cloud computing and big data analytics. Countries and corporations, especially in RCEP regions, can utilise Zetrix as a gateway to China’s Xinghuo BIF network to maximise the potential of the free trade agreement by leveraging on the blockchain. Doing so will generate increased administrative efficiency and at the same time enhance transparency and product traceability, which are key to provide added value for ever-increasing consumer awareness. Pilot applications in blockchain will power trade traceability, digital identity, supply chain management, smart financing and digital trade to enable a new wave of innovation and talent development towards a borderless future. MANAGEMENT DISCUSSION AND ANALYSIS REVIEW OF THE MACRO-OPERATING ENVIRONMENT (CONT’D)
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