Blockchain use cases and adoption: perspectives
In the past six months, B-hub partners have begun to map their local blockchain ecosystems. Interacting with major blockchain actors at national level, they have developped initial perspectives on blockchain adoption and most frequent use cases. Our mapping activities are expected to span across the two years of the project to offer an increasingly detailed vision of blockchain ecosystems in Europe. This article will seek to present a first overview of blockchain use in our five ecosystems.
Blockchain technology has been widely acknowledged in Lithuania although the number of use cases is quite limited and is concentrated in the fintech sector.
Since early 2018, Lithuania has been active in regulating the use of blockchain technology. The Bank of Lithuania (BoL) was the first in Europe to issue STO (Security Token Offering) guidelines. Shortly afterwards, the BoL launched LBchain program — a regulatory sandbox where fintech startups are provided with a blockchain platform (in cooperation with IBM or Tieto), regulatory consultations, and are able to conduct research, create blockchain-based solutions and test them in financial institutions. There are no publicly known use cases in the public sector.
In the private sector, the development of blockchain startups was booming in 2017. However, businesses are often struggling to understand the technology’s real benefits and monetize products based on blockchain. Most of the use cases are concentrated in fintech around cryptocurrency tracking, exchange and wallet services. For example, Dapp, a blockchain data tracking company, has secured a €2 million seed round investment to continue its product development.
The German economy is pillared on industry and construction and the services industry, with a relatively large number of (family owned) SME companies. Only more recently it has also gained traction as a startup-hub (predominantly Berlin) where many technological innovations around blockchain originated.
While many solutions and technologies are developed by innovators, adoption of blockchain use-cases is still lagging behind other developed countries, yet there is a more than average willingness to invest significantly into the technology. Its government has recently released a national blockchain strategy prioritizing the adoption of blockchain technology within public institutions, manifesting a solid interest from the government to find suitable use cases. Next to general recommendations regarding studies and research, it particularly highlights the need for digital identities, a trust infrastructure, a government blockchain and blockchain in public administration. It also recommends a few high-level use cases for further research.
In practice we observe many use cases around fintech, entertainment and identity being developed, but do not have the current insight to quantify the effort, possibly because companies are not actively advertising the fact that they use or pilot the technology, and more research may be needed to obtain a better overview.
Due to the origin of blockchain technologies, France’s blockchain adoption first developed through the financial sector. France’s financial regulator (Autorité des Marchés Financiers) has been an early pusher for the development of crypto assets in the country, and the Ministry of Economy is increasingly active in funding and improving the regulatory framework, as illustrated by the 2019 PACTE law.
In the past three years though, blockchain has touched upon a much larger scale of application domains – spanning from education to healthcare, to infrastructure securitization to retail, and many more. Today, most French industrial groups have their own blockchain unit or implement blockchain to some extent; although they do not necessarily make the information public.
Blockchain adoption in the public sector remains limited to traceability and notarization of documents and physical flows. For instance the French military police has implemented blockchain for notarization of documents and traceability of international funds allocated; and a blockchain pilot has been implemented by trade courts to secure registers. In addition, RENATER, owner of the national electronic communications network for technology, education and research, is set to integrate an EBSI blockchain node in the next months.
Brakes to a larger adoption include a limited trust in the added-value of blockchain implementation both in the private and public sector.
Since 2018, blockchain is taking increasing ground in Italy. In the period 2018-2019, total investments in the blockchain domain doubled from 15 million euros to 30 million euros. The sectors of finance/insurance and supply chain/product traceability attract most investments, with 40% of all investments for the former, and 30% for the latter.
In 2019, 50 training initiatives on blockchain applications, 80 business consultancy-led initiatives supporting blockchain proof of concepts or pilot projects development, and 10 cases of implementation of operative deployment projects were identified. However, trust in the impact of blockchain technologies in the private sector remains limited. According to a 2019 survey from the Blockchain and Distributed Ledger Observatory of the School of Management of the Polytechnic of Milan, only 12% of large companies and 3% of SMEs consider that blockchain will have an impact on their business in the next five years.
In the public sector, pilots led by ministries or local governments are under development. They focus on three major aspects:
- Notarization to register documents and databases usually on permissionless platforms (e.g. digitalisation of public registers or public lists);
- Smart Contracts solutions to guarantee transparency of public services provision to citizens (e.g. identity management or allocation of funds through tenders and public procurement);
- Distributed Ledger: development of new platforms with different actors/nodes to ensure transparency of information or databases while managing processes or supply chains (e.g. management of medical records or anticounterfeiting of medicines).
In summary, despite the disruptive potential of the technology, only tangible demonstration of cost efficiencies, new value or creation of new revenues for blockchain adopters will drive further adoption.
In Romania, blockchain technology has a low adoption in general. There are less than 100 active startups of which no more than a dozen have traction. A number of startups founded by Romanians are active in larger markets in Asia, the United States of America or Western Europe; and are not necessarily making their presence known in Romania.
Overall, the tech ecosystem is aware of the potential of the technology, and there are meetups and discussion groups on the topic. In most cases, blockchain is considered for fintech, digital infrastructure, and healthtech use cases. Besides, several organisations and associations aim to promote blockchain-related technology adoption.
In the public sector, little attention was given so far. However in the past months, we should note that the Agency for Digitisation of Romania became more active – working on fostering online interaction between citizens, companies and the central administration. There is hope for the future that blockchain will receive more attention.