Blockchain: Opportunities for Private Enterprises in Emerging Markets

January 22, 2019

Over the course of two years, IFC worked with key influencers and experts in the worlds of distributed ledgers and digital finance to create a series of nine papers examining the potential and perils of blockchain. An initial report with six chapters was published October 2017. Since then, three additional in-depth notes have been added to broaden and deepen our understanding of this burgeoning technology, its enormous potential, and its many challenges. These documents collectively examine the general contours and technology underlying blockchain and its implications for emerging markets.

Specifically, this report provides an examination of blockchain implementation in financial services and global supply chains; a regional analysis of blockchain developments in emerging markets; and a new focus on blockchain’s ability to facilitate low-carbon energy solutions as well as a discussion of the legal and governance issues associated with the technology’s adoption.

Key messages

  • Blockchain is a new mechanism of trust with the ability to deliver significant productivity gains to multiple industries, from financial services to energy, intellectual property, the public sector, and beyond.
  • Emerging markets may be poised for a more rapid adoption of blockchain due to their underbanked populations, higher banking risks, and lower bank penetration. And blockchain may be critical to mitigating the de-risking by financial institutions that is impacting emerging markets.
  • Digital finance—mobile networks, the cloud, big data, and blockchain—is the key to bringing banking to the next billion people.
  • Blockchain’s potential uses may carry beyond the financial sector, with possible benefits for global value chains that cross multiple borders and connect advanced and emerging economies, as well as for agriculture and pharmaceuticals, among other sectors.
  • Developing a proper governance and regulatory framework for blockchain-based applications will be essential to providing market participants the stability they need to fully engage with the technology.
  • Blockchain can help accelerate the adoption of clean, affordable, reliable, and resilient energy sources in emerging markets.
  • The use of blockchain presents unique legal issues, including accountability and privacy, though some of these were also challenges identified and overcome at similar innovative leaps in the recent past.