Two years ago, the World Economic Forum predicted that 10% of global GDP would be stored using blockchain by 2027 – a proclamation that caught many by surprise.
1 Few companies at the time had conducted proofs of concept, much less participated in the many pilots that were beginning to percolate.Fast-forward to year-end 2017. Blockchain – the emerging distributed ledger technology with the potential to automate not just key processes but entire industries – is moving from conceptual buzz to mainstream business discussion, with a multiplicity of enterprise implications in play beyond Bitcoin, the cryptocurrency upon which blockchain is based.Innovation in and around blockchain is currently concentrated in the U.S. and Europe, primarily focused on financial services, but application of the new technology is quickly spreading over the Asia-Pacific region. For example, China has explicitly made blockchain a pillar of its economic development strategy. As a result, many observers believe Asia will become a crucial engine for venture capital investment and a hotbed for blockchain innovation – perhaps sooner than most global economy pundits had imagined. Consider that fintech financing in Asia-Pacific doubled from $5.2 billion in 2015 to $11.2 billion in 2016, compared with $9.2 bi ll ion in the U.S. and $2.4 bi ll ion in Europe.
2 Similarly, the region leapfrogged the adoption of mobile banking and has surpassed other geographic areas for mobile finance application usage.
3 Blockchain adoption may follow a similar trajectory, as the region boasts the most favorable dynamics for distributed ledger technology adoption. Key drivers include a dynamic socioeconomic landscape, solid interconnectivity, massive digitization of payment solutions, a consistent regulatory environment and a large unbanked population. To find out more about blockchain in the Asia-Pacific region, we conducted a study of 482 banking and financial services senior executives across China, Australia, Japan and Singapore (see methodology, page 23). Although blockchain technology is on-course to change how every sector in the world economy does business, this report focuses primarily on financial services, including banks and insurance companies, in the Asia-Pacific. The objective of this report is to provide a glimpse into how financial institutions are readying themselves in the Asia-Pacific region for a future that pivots around blockchain’s distributed ledger technology to power enterprise-grade, transactional applications.