Tracking and proving the provenance of everything from organic chickens and ethically produced diamonds to college degrees will be the top use of blockchain technology over the next decade, accounting for a nearly $1 trillion boost in global GDP, according to a new report from PwC.
The consulting and accounting giant said in a study released on Oct. 13 that provenance will be far and away the largest use of blockchain, which it believes will have a $1.76 trillion impact on the global economy by 2030.
“Serious activity around blockchain is cutting through every industry across the globe right now,” said Steve Davies, blockchain leader for PwC UK, which produced the report. “It’s driven by an acute need to win trust in the digital world. Businesses are rethinking their operations and are discovering not only is blockchain technology key to delivering trust, but it’s an opportunity open to all.”
Certification, recruitment, commercial transactions and the way they secure, share, and use data are the leading uses for blockchain, as 61% of CEOs said that the digital transformation of their business is a top-three priority.
China and the U.S. will be the biggest winners, with China getting a $440 billion boost, by 2030, while the U.S. will add $407 billion to its GDP by 2030, said PwC. Germany, Japan, the U.K., India, and France will all benefit by at least $50 billion.
The top five uses
While arguing that blockchain has the potential to impact almost every industry, from heavy industries to food and fashion, PwC found that these five uses have the biggest potential impact.
Provenance: $962 billion
Provenance is far and away the biggest use, with a potential impact more than twice that of any other and the potential to strengthen transparency in any supply chain.
“Take retailers—they can track the provenance of products, enabling them to build customer loyalty and trust through transparency. If they want to demonstrate that a product is environmentally friendly, or that everyone involved in its production was paid and treated fairly, they can. Counterfeit, stolen or contaminated goods can be flagged within seconds. The technology provides a safe and transparent journey for goods, allowing organizations to prove they live up to their values.Anthony Bruce, Partner and Pharmaceutical and Life Sciences Leader, PwC UK
Payments and financial instruments: $433 billion
From central bank digital currencies to stablecoins, blockchain technology can improve national payment infrastructures and transform cross-border payments with lower fees, near-instantaneous transactions and greater financial inclusion, to say nothing to cutting down fraud and money laundering.
“As the regulatory landscape becomes better defined, regulated financial institutions are more confidently exploring how they can adopt blockchain and crypto assets. Yet most people won’t even realize they are using blockchain… These powerful innovations will transform payments infrastructure for people, businesses and governments.”Lucy Gazmararian, Crypto and FinTech Advisory, PwC Hong Kong
Identity: $224 billion
From safeguarding personal credentials ranging from drivers’ licenses to professional credentials, blockchain can “bring vast cost efficiencies” while reducing fraud and identity theft.
“Individuals want to be able to access and share their professional qualifications anywhere, anytime, and organizations want to know they can trust those qualifications. As the education sector accelerates its move into digital learning, particularly in light of COVID-19, it is embracing new technology with greater urgency.”Caitroina McCusker, Education Consulting Leader, PwC UK
Contracts and dispute resolution: $73 billion
Blockchain technology can improve the flow of commercial agreements, bringing together ledgers, contracts and payments while flagging disputes.
“[S]mart contracts … can synchronize the release of payments with the delivery of goods, services, or even financial instruments. The biggest advantages are in the signing and filing: the contracts don’t need to be signed in person, and the technology automatically creates an audit trail. This saves time, lowers costs and removes friction to improve the flow of any commercial agreement, within and across borders.”Guenther Dobrauz, Global Financial Services Leader, PwC Switzerland
Customer engagement: $54 billion
By breathing new life into traditional, card-based loyalty and reward programs, blockchain can boost engagement by integrating with customer relationship management (CRM) platforms like Salesforce.
“Blockchain could prevent loyalty programs from falling out of use. Loyalty and reward programs were created in the 1980s when we bought things with cash. The idea is still sound, but redemption rates are low. Consumers just aren’t motivated to use them as much as they could. The younger generation is likely to be carrying around nothing more than a smartphone as a means of payment. They don’t want a wallet full of plastic cards.”Haydn Jones, Senior Blockchain Market Specialist, PwC UK