Blockchain: to APAC and beyond
Seeing as we are well into 2020, it seems fitting to take a step back and reflect on the developments in my area that so many of my fellow leaders in their relevant space do around this time.
For blockchain – a technology that has seen a steep growth trajectory since inception – taking stock on its status at this time is particularly thought-provoking.
We continue to see blockchain develop to cover a growing number of use cases across industries as diverse as financial services, insurance, supply chain and healthcare.
So, I thought I would take this opportunity to look back in order to look forward and make three predictions for how blockchain will develop throughout 2020 and beyond.
It is clear that, while the technology has historically seen uptake firstly in the US and Europe, the APAC region which I oversee is fast catching up in its deployment of blockchain technology.
Here, I outline three of the promises blockchain can bring to APAC, and beyond:
1. The digitisation of assets
The creation of new markets powered by digital assets is one of the most exciting promises of blockchain technology. Tokenisation of real-world assets is now happening on R3’s Corda platform, with the launch of Token SDK and Corda Settler leading the way in this area.
Asia is a hub for the investment and trade of valuable digital assets and as such, the region has become a focal point for R3 to work with national regulators on the development of regulation and legislation for digital tokens - for example, the Monetary Authority of Singapore’s Project Ubin & Bank of Thailand’s Project Inthanon.
We expect to see a lot more development in the area of digital assets, not just in Asia, but globally.
Fonterra partners with HCL Technologies on IT infrastructure
2. Collaboration with regulators and central banks
In Asia-Pacific, R3 has the benefit of working with leading technology adopters. While there are those who have been slower to start, by and large, APAC corporates are punching above their weight in terms of forward-looking technology adoption. Especially in the blockchain area, we see a large chunk of our global Corda applications and implementations happening in APAC.
India, Thailand, Singapore, Australia, Japan and Hong Kong have all become hubs of blockchain innovation and progress. They are leveraging R3’s Corda to simplify processes, increase levels of automation, and create new business opportunities.
We expect to see this continue well into the new year, and, for R3, the continued involvement of major Thai banks in Project Inthanon is the next step towards a production-ready solution on Corda and accelerates the growth of the Thai banking sector’s blockchain ecosystem. We recently completed Phase III of the project that involved Hong Kong’s Monetary Authority (HKMA) and the banks in Hong Kong.
3. The growth of blockchain application in trade finance
A key vertical expected to gain momentum in APAC now and throughout 2020 is trade finance. HSBC recently announced the completion of the first yuan-denominated letter of credit using Contour, a trade finance platform built on Corda. This marks an important step forward for Contour’s popularity as a commercially viable model for Asia Pacific banks.
As a sector that is currently beholden to legacy processes and weighed down by inefficiencies, trade finance is ripe for blockchain to make a real difference. In 10 years, trade finance will be unrecognisable. An industry whose operating model has changed only marginally over the last century is going through an unprecedented transformation.
Despite the above predictions being grounded in my own experience as a technology professional, as with all technology-led solutions, there is no absolute certainty with which we can foresee the course it will take. What is certain, however, is that the wave of interest in blockchain technology that was once limited to the US and Europe is well and truly present in Asia and growing day by day. Perhaps in the future we will look to Asia as the gold-standard guide for blockchain’s deployment? Watch this space.
Amit Ghosh, Head of APAC, R3