Incorporating blockchain into public and private sector systems could add £57bn to UK GDP over the course of the next decade, as authorities and businesses transform the way they operate in the wake of the pandemic.

Globally the benefits of using blockchain technology could reach $1.7tn (£1.3tn), a 13 October study by accountancy firm PwC found. China and the US would take the lion’s share of this boost at $440bn and $407bn respectively.

While significant, PwC’s estimates suggest the technology — originally developed to underpin cryptocurrencies such as bitcoin — will not revolutionise the economic system. The projected benefit to the UK economy, for example, of £5.7bn a year on average over the 10 years to 2030, would account for about 0.3% of a total UK annual GDP valued at about £2tn in 2019.

The report said 2025 will be a tipping point as blockchain becomes more mainstream and adopted at scale across a variety of industries.

It has already been widely accepted by those in the financial services sector, as some banks and fintechs are operating trials for using blockchain to support cross-border payments and promote financial inclusion.

PwC said blockchain’s adoption in the payments sector alone could contribute £13bn to the UK economy in the next 10 years.

A Deutsche Bank note on the topic, published on 12 October, said distributed ledger technology and blockchain are already being used to improve supply chains and manage information by companies such as consumer giants Nestlé and Unilever and pharmaceutical firm Merck.

“Blockchain has long been associated with cryptocurrencies such as bitcoin, but it has much more to offer, particularly in how public and private organisations secure, share and use data,” said Steve Davies, global blockchain leader at PwC.

“As organisations grapple with the impact of Covid-19, we have seen an acceleration in many disruptive trends. Our analysis shows the potential for blockchain to support UK organisations in how they rebuild and reconfigure their operations, underpinned by improvements in trust, transparency and efficiency.”

PwC said the public administration, education and healthcare sectors stand to be the biggest beneficiaries from the advent of blockchain to the tune of £22bn by 2030, using it to combat identity and counterfeit fraud.

Meanwhile, business services could receive £15bn in benefits from blockchain, while retail and communications could gain £13bn and £5.3bn respectively.

Using blockchain to help in tracking and tracing products and services would boost the UK economy by £30bn in the next 10 years, as it can be adopted by a range of industries from mining to fashion retail.

PwC recommended that those seeking to implement blockchain must also consider its energy impact, as the data centres needed to keep the technology going can be intensive to operate.

To contact the author of this story with feedback or news, email Emily Nicolle



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