World Economic Forum Says Blockchain is Key to Post COVID Economy Recovery
The coronavirus COVID-19 pandemic is not only changing the social and economic landscape in the four corners of the world, but it is also working as the catalyst for a long-waited massive deployment of Blockchain.
The pandemic has exposed the inefficiencies and vulnerabilities in the supply chains all around the world, and it has created a crisis of trust in sectors like pharmaceutical products, medical stocks, and food services.
The World Economic Forum has recently released over 1-year’s worth of research suggesting that the Blockchain and associated technologies would be the key to restore confidence and accelerate the economic recovery in a post-COVID world.
The Forum also published a toolkit that would pave the road for an efficient and low-risk massive blockchain deployment in the real world.
Focused on the global supply chain, the Forum published the "Thoughtful blockchain implementation is key to improving supply chains in a post-COVID world" report, followed by the "Redesigning Trust: Blockchain Deployment Toolkit."
The report says:
COVID-19 has shown the vulnerabilities of our supply chains and the opportunity for technologies such as blockchain to boost efficiencies and strengthen trust across a range of stakeholders, However, as organizations pivot quickly to put these new technologies into place, the crisis has highlighted the need for both speed and clarity in implementations.
Restoring Trust Between Critical Players
According to the report, inefficiencies in pharmaceutical products, medical supplies and food services, among other sectors, lie in the lack of transparency and trust between the parts involved in the chain. Although it is not new behavior, it comes into more prominent importance in the COVID times.
However, the implementation of distributed ledger technology (DLT) can create a "shared truth" among supply chain stakeholders.
In that framework, over a year ago, the Forum started a project including over 80 companies and organizations in more than 50 countries in six continents to study the use cases of over 40 blockchain projects.
The report says:
Any implementation of blockchain technology should be approached just as any other new solution an organization wishes to integrate into its overall operation. Blockchain is one piece of the information technology (IT) puzzle that, if deployed correctly, complements the other solutions used every day to carry out routine and mission-critical tasks.
The Forum bet hard on the project and included leading global organizations such as Deloitte, the World Food Program, Saudi Aramco, the World Bank, and The Abu Dhabi Digital Authority, among others.
It was interesting the case of Deloitte as the consulting firm reported in 2017 that 92% of all blockchain projects were dormant or dead. Well, Deloitte took it seriously and added its point of view to develop the Blockchain Deployment Toolkit based on its own research and experience.
The Future Has a Name And Last Name: Blockchain Deployment
Organizations are pivoting quickly to implement new technologies into place, especially after the COVID-19 irruption, or disruption. The pandemic has highlighted the need for both speed and clarity in decentralized implementations.
A good sample is JPMorgan’s strategic agreement with the San Francisco capital technology platform Taulia to provide "small and medium firms with secure, fast, and cheap access to money."
It has been said that $120 trillion worth of transactions are completed every year by businesses. Still, at any point in the chain, around $20 trillion of that amount is waiting in the supply. Well, JPMorgan and Taulia are now working with new technologies and blockchain to fix that.
Taulia affirmed in a press release:
The new strategic initiative offers J.P. Morgan's clients both the capability to onboard suppliers of all sizes across the globe and the flexibility to toggle seamlessly between bank-funded and self-funded early payments.
Back to the Forum, the report points out that "the role supply chains play has never been more critical." It states that the toolkit can be a game-changer for all that blockchain deployments in the real world that have been locked with scalability, risk, and trust problems in the past.
The Blockchain Age
Historically, IT solutions in the blockchain industry have been a patchwork of in-house and centralized entities that often create misunderstandings between the different players. That must change, and the supply chain should be a shared responsibility and effort to maintain trust.
The report concludes:
The essence of Blockchain is to offer a new way of collaboration through decentralization. At the same time, it is important to keep in mind that decentralization is not an all-or-nothing objective but a balanced one that can require trade-offs for practical reasons.
So, it is the moment of truth for Blockchain?
According to the World Economic Forum, there is no better time than now to look for deployment and a mass implementation and use of Blockchain and DLT solutions around the world.
Blockchain is here to fight against COVID-19 in the aftermath of the pandemic. Stay tuned.
Mauricio is a newer member of the team and a very welcome addition. He is a financial journalist and trader with over ten years of experience in stocks, Forex, commodities, and cryptocurrencies. This experience means he has an excellent understanding of the markets and current events.