What Benefits could Blockchain and Cryptocurrencies offer us during this COVID19 Pandemic?

by | Sep 3, 2020 | Token | 0 comments

During the initial stages of the COVID19 outbreak- before even the World Health Organization (WHO) had termed it as a global pandemic- various supply chain measures were put in place due to the virus’ impact in China, which certainly left severe consequences on the international trade. Amazon, one of the world’s biggest e-commerce companies, encountered intense supply chain disruptions in the wake of the Pandemic that it decided to stop the shipping of all non-essential products temporarily- and it was not the only business to do so.

However, it seems the challenges we are facing have rejuvenated the world to establish new and effective ways of facilitating business. Last month, the World Economic Forum published a report stating that blockchain and digitization could help make supply chains more robust to future disasters, by making supply chains more visible to manufacturers.

As a distributed and immutable ledger of records, blockchain can accurately track and trace the movement of goods in a supply chain, assisting manufacturers and business personnel identify where issues might arise during the production process and establish alternative suppliers instead.

This implies that while a manufacturer may be able to identify challenges with Tier-1 suppliers during a worldwide pandemic or regional crisis, they are less likely to realize what is happening with those supplier’s other business partners, and this is where we believe blockchain could play an essential role in responding to shocks.

In this Pandemic, many manufacturers have established that this is where the problem lies- not in getting products or services rendered by Tier-1 suppliers but by “their” guys, and there lies the potential value in embracing blockchain to track the whole supply chain to spot potential barriers.

Already pharmaceutical supply chains leverage blockchain to achieve compliance and traceability of their products, with MediLedger being the most popular blockchain-based solution used the industry today.

But pharma is not the only sector already exploiting the distributed ledger technology. Several US-based food producers, like Nestle, Carrefour and Starbucks, are already using blockchain for inventory management, and the world has admitted that blockchain is the answer for streamlining the supply chain sector of various industries.

From decentralizing the patient health history to improving payment methods, blockchain is becoming a recommendable force in the healthcare industry.

Regarding the COVID19 Pandemic, blockchain-based credentialing systems such as ProCredEx could have a significant impact on accelerating the on-boarding process of extra doctors and retired staff, enabling them to be at the front line and help those in need quicker.

Cryptocurrencies on the limelight

COVID19 has highlighted a significant shortcoming of fiat money, which may accelerate the transition to digital currency.

Physical money, whether made of paper, polymer, or cotton and linen as in the case with the US dollar, can act as an agent of virus transmission. The World Health Organization (WHO) confirmed this statement in their recent press briefing and in a study from Germany which established that Coronavirus could survive on notes, coins, and the plastic exteriors of ATMs for almost a week.

An inflection point for cryptocurrencies

More than 75% of transactions in China are done virtually using WeChat Pay or AliPay. However, the “social governance” aspects of a government-backed digital currency- which might feed into the social credit system well- could prove helpful for closing tabs on quarantined individuals.

For the rest of the world, the urge to improve personal hygiene makes cryptocurrencies an attractive proposition. As the virus spreads and various governments impose lockdowns on their people, banknotes have not been left behind. Paper notes have been disinfected using ultraviolet light and high-temperature ovens in China and placed under a two-week quarantine period in countries as far as Hungary and the US.

If the trend persists and causes rampant distaste for physical notes, the credit card sector is likely to grow, as well as payment companies like PayPal.

On the other hand, if regulators acknowledge the opportunity to seize tighter measures over the economy, governments could be compelled to issue their central bank virtual currencies. This would mark the dawn of a new era of financial experimentation.

For cryptocurrencies, this would be the first real test of an alternative financial system based on scepticism of banks.

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