China Among Emerging Hotbeds for Blockchain Solutions, Deloitte Says
China is among the countries that “appear to be emerging as hotbeds of new blockchain solutions, based on their own collective objectives, approaches, and cultural sensibilities”, Deloitte’s 2019 survey shows.
Most respondents in the survey released earlier this week suggest that blockchain is a top-five critical priority in top global economies including China. Country-specific, 73 percent of Chinese executives surveyed agreed with this assessment, while 34 percent of respondents “strongly” believe in the disruptive potential of blockchain.
As a top global economy and a leader in the Asia-Pacific region, the importance of the friendly stance China has developed towards the evolving technology cannot be overemphasized.
“China, more than anywhere else in the world, will use blockchain strategically instead of tactically,” says Paul Sin, consulting partner, Deloitte Advisory (Hong Kong) Ltd., and leader of Deloitte’s Asia-Pacific blockchain lab. “More projects are driven by top management who use blockchain as a strategic weapon rather than a productivity tool.”
Conducted between February 8 and March 4, 2019, the survey sought to gain greater insights into the overall attitudes and investments in blockchain as a technology. It polled a sample of 1,386 senior executives in Brazil, Canada, China, Germany, Hong Kong, Israel, Luxembourg, Singapore, Switzerland, United Arab Emirates, United Kingdom, and the United States at companies with US$100 million or more in annual revenue for respondents outside of the U.S.
The new global blockchain survey results show that more than half of enterprise respondents cited blockchain as a top-five strategic priority, and a further 56% stated that blockchain will disrupt their industry. The survey data also points to signs of blockchain’s increased maturity.
Those willing to invest US$5 million or more in new blockchain initiatives over the next 12 months, hold at 40% (39% in 2018). 53% say that blockchain technology has become a critical priority for their organizations in 2019 (a 10-point increase over 2018) while 83 percent see compelling use cases for blockchain (up from 74 percent).
The Chinese government recently established key strategic technology priorities in its 13th five-year plan for IT. In it, China cited blockchain as a key driver of economic development especially for long-term applications like product traceability and copyright protection.
China’s bans on cryptocurrencies and private blockchains has rubbed on Singapore which is positioning itself to promote them. It has been supportive of free public blockchain platforms with favorable tax treatments and public funding for blockchain development.
About 91% of respondents put the timeframe to achieve return on blockchain investment to less than five years. On the other hand, top on the list of the greatest barriers to the adoption of blockchain, according to the executives, is regulation (30%) followed by implementation-related issues (30%) as there’re concerns over replacing or adapting existing legacy systems. Next is potential security threats (29%) and uncertain return on investment (28%).
Lone Fønss Schrøder, CEO of Concordium, said Deloitte’s findings indicate that companies are “becoming increasingly focused on the specific use cases of blockchain and which business models it might disrupt” signaling “a significant turning point” in its history and opening the door to adoption.
“However, regulatory concerns continue to top the list of barriers preventing blockchain investment by companies. This is a recurring issue for businesses who must ensure that they are complying with regulatory requirements, ranging from ID/KYC verification to simple checks such as VAT numbers or customer age.
To see the mainstream adoption of blockchain, Schrøder adds, a structured regulatory framework is needed. “Without this, companies will remain reluctant to embrace this emerging technology and expose themselves to the potential risk of unregulated, anonymous blockchain networks and unintended whitewashing issues in relation to token transactions.”