© Catherine Darphin
Thomas Campione, Director, Blockchain & Crypto-assets Leader at PwC Luxembourg.
Let’s be clear... what we’re going through is dramatic and our gratitude goes to the healthcare professionals who give 200% of themselves to help distressed people all around the globe. These professionals are firefighting, literally, as are governments throwing trillions of dollars in the economy to go through this hardship.
Most governments and businesses were neither prepared nor ready to face such a crisis and its consequences on social and economic life. War mode is on.
As a matter of fact, the current situation shows:
· A limited to no real time supply chain visibility preventing timely decisions (shortage of masks, ventilators, free hospital beds, stocks of consumer staples...).
· A limited ability to ensure that complex decision-making processes can take place remotely and to maintain industrial production autonomously.
· A significant lag in the necessary move towards fully paperless/digital workflows in private and public services.
· A too high prevalence of physical cash payments in day-to-day individual transactions.
· A hard time for public authorities to enforce behaviours and a very limited ability to monitor such behaviours...
But now is the time to find solutions, not to blame anyone, so picture this:
· what if worldwide stock of critical health materials could be identified and mobilised in a matter of minutes;
· what if national (and even international) hospital capacities could be known in real-time and even prospectively, ensuring optimal allocation of patients and solution for traffic jams (volunteers monitoring availability of beds all day long over the phone, how crazy is that in 2020?!);
· what if the level and provenance of the stock of consumer staples could be visible to every citizen, ensuring that there’s no panic mode among people;
· what if public and private digital infrastructures were up and running so that any decision-making process (including election…) could happen remotely, without integrity risk (in paperless mode) so as to ensure continuity of business/social life under any circumstances;
· what if each and every individual was able to demonstrate who they are and some of their attributes, what they did/did not and get incentivised/rewarded for that;
· what if the society became cashless and central banks had the ability to put money directly in the hands of citizens in the matter of a second.
The list goes on...
The good news is that all of the above is not science-fiction. The willingness to engage with disruptive technology and to make the required level of investments can dramatically increase our ability to efficiently manage the situation. The bad news...? There's no bad news here.
If you’re still wondering, we’re of course referring to the blockchain technology here.
While many are looking for tactical/short-term moves to save what can be saved and to fix what can be fixed, there’s certainly a strong need to also look at a strategic/long-term shift to ensure this does not happen ever again.
The inability of major economies to function properly in the current context costs hundreds of billions per week, so maybe now is the right time to put research and development budget and investment into perspective, to start and understand what technology can bring to the table, to go beyond misconceptions, and to move away from the idea that one can have a truly global economy working on centralised systems supported by excel sheets.
As a short reminder, some of the main use cases of blockchain technology include:
Assets (tangible or not) provenance and tracking => ensuring full transparency on supply chain, near real-time visibility and timely decision making.
Payment (transaction, clearing, settlement), including cross-border payments => almost instant settlements, massive reduction of counterparty risk and drastically reducing transaction fees.
Crypto-assets and tokenisation => Whether they represent a decentralised, censorship-resistant, cryptographically secured form of money such as bitcoin or have a more functional purpose acting as a mean to bootstrap a network, crypto-assets bring unique features and new ways to transact and collaborate. Tokenisation - the process of digitally representing rights to an asset on a blockchain - is tightly linked to crypto-assets and brings fractional ownership and transferability of any kind of assets, automation of asset servicing workflows and promises to offer liquidity to currently illiquid assets. In a nutshell, perspectives include full investability of assets (directly impacting diversification potential), global investor reachout, and cost efficiency.
Credentialisation => Blockchain gives to the owner of any credentials (from any issuer) the ability to demonstrate that it is legit, and the capacity to any external party to rely on such credential without the need for further verification by a third-party. This does not only bring massive fraud reduction but also significant cost savings in verification time and efforts.
Self-sovereign identity => Think about truly owning and controlling your digital identity and all of its attributes, deciding what personal data to share, managing access rights, without the need to go through any intermediary: a real paradigm shift.
Digitisation of workflows and decentralised autonomous organisation based on smart contracts => Smart contracts (which are not that smart and rarely contracts actually) push the concept of automation to the next level and bring forward the idea of autonomous application or organisation, relying on coded business logics (the so-called smart contracts) to behave in a certain way depending on the course of events, working effectively 24/7 without any manual input.
The list goes on (as well) ...
Of course, blockchain is not alone here - IoT (Internet of Things) and AI (Artificial Intelligence), for example, would be two essential technologies which, in combination with
blockchain, would have a multiplicative effect and significantly augment the overall impact on current ways of operating.
I trust that this experience will be a catalyst for radical change in behaviours, operating models and the way we do business. None of the above will happen overnight but it is time to challenge the status quo