Hong Kong, Singapore: Trust is an Issue in Blockchain Initiatives

AWS is seeking to enter the blockchain-as-a-service market (Image phive2015 / iStockPhoto)
Image: phive2015/ iStock

While firms surveyed by PwC are jumping on the blockchain bandwagon, they identify trust as one the biggest blockers to the technology’s adoption.

PwC  surveyed  600 executives in 15 countries and territories— Australia, China, Denmark, France, Germany, HK, India, Italy, Japan, Netherlands, Singapore, Sweden, UAE, the UK, and the US—on their development of blockchain and views on its potential.

Concern about trust among respondents in the survey is highest in in Singapore (37%), Hong Kong (35%), and UAE (34%), reflecting in part the dominance of financial services in blockchain development, said PwC, adding that 45% of all respondents see trust as an issue and 48% believe regulatory uncertainty is the biggest concern.

“Blockchain by its very definition should engender trust. But in reality, companies confront trust issue at nearly every turn. Failing to state a clear business case from the outset leads to projects stalling,” said Steve Davies, PwC’s Blockchain Leader.  “

“Creating and implementing blockchain to realize its potential is not an IT project. It’s a transformation of business models, roles, and processes,” he advised. “It needs a clear business case, an ecosystem to support it; with rules, standards and flexibility to deal with regulatory change built in.”

Other survey highlights

  • 84% of executives report blockchain initiatives underway
  • 15% report having fully-live blockchain platforms
  • 10% report a blockchain implementation pilot in progress
  • 32% have projects in development and 20% are in research mode.
  • The US (29%), China (18%), Australia (7%) are perceived as the most advanced currently in developing blockchain projects
  • 30% of respondents believe China will have overtaken the US Within three to five years in blockchain development

Four key areas for focus

In addition, PwC  identifies four key areas for focus in the development of internal or industry wide blockchain platforms:

Make the business case: organizations can start small, but need to set out clearly the purpose of the initiative so other participants can identify and align around it.

Build an ecosystem: Participants should come together from different companies in an industry to work on a common set of rules to govern blockchains. Of the 15% of survey respondents who already have live applications, 88% were either leaders or active members of a blockchain consortium.

Design deliberately around what users can see and do: Partners need rules and standards for access permissions. Involving risk professionals including legal, compliance, cybersecurity – from the start will ensure blockchain frameworks that regulators and users can trust.

Navigate regulatory uncertainty: The study warns that blockchain developers should watch but not wait as regulatory requirements will evolve over the coming years. It’s vital to engage with regulators to help shape how the environment evolves.

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