Building Resilience In An Uncertain Global Economybr>
The COVID-19 pandemic has permanently altered the outlook for several key global industries, shuttering the doors of brick-and-mortar retailers, upending oil and gas demand and grounding planes at vital transportation hubs. However, the pandemic has also created a unique opportunity for promising sectors to flourish in our new normal, from finance to supply chain management and health care. At the foundation of the growth of these three markets is an important catalyst: blockchain technology.
Before COVID-19, the global blockchain industry was already positioned for significant growth, as worldwide spending on blockchain solutions reached $2.7 billion in 2019. This impressive number is expected to grow immensely as a result of the pandemic, with the size of the global blockchain market anticipated to top $28 billion in 2025. When COVID-19 is ultimately in the rearview mirror, it’s a very real possibility that distributed ledger technology will transform these markets and help bring a sense of trust and normalcy back to our economy.
Let’s dive deeper into how blockchain is positioned to benefit these key industries.
In early March, the World Health Organization and the Federal Reserve raised concern over the role of bank notes in spreading the virus, increasing interest in “contactless” forms of payment. While most of the world has already started leveraging contactless payments, the U.S. is behind. In 2019, less than 0.25% of point-of-sale transactions reported by Visa were contactless in the U.S., whereas 48% of transactions were contactless outside the country.
The pandemic has set the stage for widespread adoption of tokenized mobile wallets. These “tap and go” wallets like Apple and Google Pay do not even require purchasers to enter a pin. Importantly, distributed ledger technology can track assets and payments securely, eliminating the need for complex fraud protection.
These apps are just the starting point and will spur the growth of more secure, peer-to-peer contactless payment solutions that use authentication, monitoring and data encryption. Before we know it, cash and checks will be entirely replaced by digital payment systems and new, more secure digital currencies.
Supply chain management
One conclusion made inexplicably clear by the pandemic is that our global supply chain is broken. During the outbreak’s early stages, the failure to source items we take for granted such as toilet paper or cleaning supplies offered a glaring sign of glitches in the supply chain.
In response to supply chain failures exposed by the pandemic, Mariam Obaid Al Muhairi of the Dubai Future Foundation noted, “We cannot afford to continue operating in the dark.” Blockchain technology will be integral to avoiding disastrous sourcing challenges moving forward and creating more resilient supply chains built on trust and transparency. The World Economic Forum also recognized the importance of blockchain application and created the “Redesigning Trust: Blockchain Deployment Toolkit” to aid businesses in adopting solutions such as smart contracts and inventory transparency.
Blockchain is serving as a vital tool in the fight against COVID-19 across the medical supply chain, as well as in virus testing, contract tracing and research. In the face of a lack of personal protective equipment, blockchain is connecting buyers with nontraditional suppliers that are producing masks and hand sanitizers to combat the virus. For example, IBM launched Rapid Supplier Connect to help health care organizations and government agencies identify and onboard alternative vendors.
For medical researchers, it takes vast amounts of raw processing power to run the protein folding simulations used to look for vaccines and therapies to treat COVID-19 and other viruses. Distributed computer power is currently being used across universities, medical academia and the private sector to help streamline this process and reduce the time and manpower needed to conduct these simulations.
The common thread behind the concept of blockchain and its use cases is trust. In a COVID-19 world defined by uncertainty, trust is something we need now more than ever. As we look to the future, we hope that blockchain will help to reinsert trust and build resiliency in the industries and businesses at the foundation of our global economy.