The blockchain continues to emerge as a game-changing technology worldwide – one poised to boost the efficient, secure nature of asset transactions in addition to delivering other innovative solutions across many platforms and industries. However in a recently released report produced by Moody’s Investors Service, thought leaders and experts generally agree that mass applications ensuing from this promising technology could be a few years off.
The report titled “Credit Strategy — Blockchain Technology: Robust, Cost-effective Applications Key to Unlocking Blockchain’s Potential Credit highlights a list of projects in various stages of development, resulting in a top 25 list of blockchain use cases. It looks at how growing numbers of businesses are examining the potential effects of blockchain technologies on their strategic efforts. The report details the advantages of distributed ledgers as well as ways to overcome barriers to implementation. It spans over 120 projects currently in play among its issuers, running the gamut from startups and investments to internal projects and business collaborations.
Throughout the pages, Moody places a spotlight on the vast array of applications for this technology across capital markets, manufacturing, healthcare, energy, and government, among many others. The report also looks at the compatibility of blockchain with existing technology systems as well as the ongoing development and alignment of industry standards and regulatory practices. Says Robard Williams, Senior Vice-President at Moody’s: “There is significant enthusiasm for the potential of the technology, but there is still a limited track record of large-scale blockchain implementation in a regulated environment, and many hurdles lie ahead before we’ll see widespread applications.”
The report nevertheless touts the blockchain and its ability to deliver speed, cost effectiveness, security, reliability and audible processes as its main value. One of the primary findings? That capital markets can be greatly enhanced through a shared and synchronized blockchain among many stakeholders.
The Case For Blockchain’s Future
Megabank Santander’s venture capital arm, Santander InnoVentures, is one of a number of case examples of blockchain innovations being put to use. This project which commenced in June of 2015 reputedly vetted 20-25 use cases for blockchain technology, tied primarily to banking and finance. Unfortunately, according to the Moody’s report, these findings were not carefully documented and captured by researchers.
Deutsche Bank is another financial institution that has been examining the viability of blockchain technology for over two years. While company officials note that payment markets were the primary focus of their investigation, the biggest potential gains they say may be in the securities world.
Alex Tapscott who with his father Don authored the much-anticipated book Blockchain Revolution: How the Technology Behind Bitcoin is Changing Money, Business, and the World believes that is it’s heartening (though not altogether unsurprising) to see a mainstream firm like Moody’s report on the exciting ways blockchain is being implemented to revolutionize the economy and world.
Says Tapscott: “Given their work at Moody’s, it’s unsurprising to see them focus primarily on financial services. To be sure, the financial service industry was one of the first to wake up to this technology shift, with firms like Goldman Sachs, JP Morgan and dozens of others focusing immense resources on blockchain innovations. While blockchain can radically reduce costs for banks, providing a boost to productivity and making it easier to offer products and services to a global clientele, it also radically lowers barriers to the creation of alternatives for the conventional banking industry, thereby challenging incumbents in virtually every market where they operate.”
Tapscott believes that these baby step advancements taking place in the financial services really are really just the beginning. He concludes that much larger scale advancements in the corporate world will be the next big push :
“Blockchain could allow us to finally re-architect the corporation, one of the pillars of modern capitalism. With the rise of a global peer-to-peer platform for identity, trust, reputation and transactions, we will be able to re-engineer deep structures of the firm for innovation and shared value creation. This doesn’t mean smaller firms in terms of revenue or impact. To the contrary, we’re talking about building 21st-century companies that look more like networks rather than the vertically integrated hierarchies of the industrial age.”