New analysis by PwC shows Blockchain technology has the potential to boost global gross domestic product (GDP) by US$1.76 trillion over the next decade.
That is the key finding of a new PwC report Time for trust: The trillion-dollar reason to rethink blockchain, assessing how the technology is being currently used and exploring the impact blockchain could have on the global economy. Through analysis of the top five uses of blockchain, ranked by their potential to generate economic value, the report gauges the technology’s potential to create value across industry, from healthcare, government and public services, to manufacturing, finance, logistics and retail.
The report identifies five key application areas of blockchain and assesses their potential to generate economic value using economic analysis and industry research. The analysis suggests a tipping point in 2025 as blockchain technologies are expected to be adopted at scale across the global economy.
- Tracking and tracing of products and services – or provenance – which emerged as a new priority for many companies’ supply chains during the COVID-19 pandemic, has the largest economic potential (US$962bn). Blockchain’s application can be wide ranging and support companies ranging from heavy industries, including mining through to fashion labels, responding to the rise in public and investor scrutiny around sustainable and ethical sourcing.
- Payments and financial services, including use of digital currencies, or supporting financial inclusion through cross border and remittance payments (US$433bn).
- Identity management (US$224bn) including personal IDs, professional credentials and certificates to help curb fraud and identity theft.
- Application of blockchain in contracts and dispute resolution (US$73bn), and customer engagement (US$54bn) including blockchain’s use in loyalty programmes further extends blockchain’s potential into a much wider range of public and private industry sectors.
Blockchain’s success will depend on a supportive policy environment, a business ecosystem that is ready to exploit the new opportunities that technology opens, and a suitable industry mix.
Across all continents, Asia will likely see the most economic benefits from blockchain technology. In terms of individual countries, blockchain could have the highest potential net benefit in China (US$440bn) and the USA (US$407bn). Five other countries – Germany, Japan, the UK, India, and France – are also estimated to have net benefits over US$50bn.
At a sector level, the biggest beneficiaries look set to be the public administration, education and healthcare sectors. PwC expects these sectors to benefit approximately US$574bn by 2030, by capitalising on the efficiencies blockchain will bring to the world of identity and credentials.
Meanwhile, there will be broader benefits for business services, communications and media, while wholesalers, retailers, manufacturers and construction services, will benefit from using blockchain to engage consumers and meet demand for provenance and traceability.
The potential for blockchain to be considered as part of organisations’ future strategy is linked to research by PwC with business leaders that showed almost two thirds of CEOs (61%) said they were placing digital transformation of core business operations and processes among their top three priorities, as they rebuild from COVID-19.
The report warns that if blockchain’s economic impact potential is to be realised, its energy overhead must be managed. Growing business and government action on climate change, including commitments to Net Zero transformation, will mean that organisations need to consider new models for consolidating and sharing infrastructure resources to reduce reliance on traditional data centres and their overall technology related energy consumption.