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23/04/2025by EOS Intelligence EOS Intelligence No Comments

Cashless Sweden: Prepared or Vulnerable?

Sweden’s cashless initiative is gaining momentum, driven by high digital literacy, favorable regulations, and rapid adoption of technology. Since most consumers (~95%) are digitally savvy, a tendency to prefer mobile payments over cash is pushing Sweden closer to its goal of becoming a cashless economy. Technology solutions will likely play a crucial role in shaping the evolution of payment systems as Sweden transitions to a cashless society.

Consumer preference for mobile payments drives Sweden’s cashless shift

The shift toward a cashless society in Sweden reflects both consumer preferences and the increasing number of businesses that prefer or require card and mobile payments. At the same time, Swedish society shows a high level of trust in banks and government institutions, which reduces resistance to financial innovation. Together, these factors create a strong foundation for the widespread adoption of new digital payment systems.

Since the COVID-19 pandemic began in early 2020, cash usage has declined, with cash in circulation accounting for only 1% of the country’s GDP, owing to the convenience and security of digital transactions.

Card offerings, such as Handelsbanken’s Allkort Mastercard, SAS EuroBonus Cards, and the Lunar-SAS partnership, encourage consumers to adopt digital payments by offering various reward programs, including cashback, bonus points, and travel incentives.

Growth in real-time payments fast-tracks the cashless initiative

The Swish mobile payment system is boosting the country’s cash-free initiative by driving growth in real-time payments. Swish is the country’s second most common payment method, highlighting its significance in Sweden’s digital payment landscape. A recent addition of the tap-to-pay function in December 2024 has further expanded Swish’s capabilities for in-store purchases for over 8.6 million Swedish app users (a high number, considering the country’s population is around 10.5 million).

Moreover, the Riksbank, Sweden’s central bank, intends to expand its RIX-INST, a real-time settlement service that currently only allows for domestic payments. The government plans to explore synergies between the RIX INST system and other regional systems, such as the European Central Bank, Banca d’Italia, and Danmarks Nationalbank, seeking to facilitate cross-border payments utilizing cross-currencies. The plan focuses on supporting seamless international transactions that would ultimately strengthen Sweden’s position as a global leader in digital payments.

Despite this favorable scenario for Sweden’s cashless initiative, Sweden’s central bank still aims to support both cash and digital payments, as a way to be more inclusive. This means that while digital payments will continue to be a popular option, cash payments should not disappear entirely. Swedish authorities acknowledge that the role of cash is still key, especially to protect vulnerable groups such as the elderly population and people with disabilities. In case of emergencies (natural disasters, cyberattacks, or other crises where digital systems might fail), cash will also be necessary.

Cashless Sweden: Prepared or Vulnerable? by EOS Intelligence

Open-banking regulations aid in alternative payment adoption

In 2019, Sweden implemented the EU’s revised Payment Services Directive 2 (PSD2). This European law aims to strengthen customer authentication, ensure proper authorization and regulation of third-party providers, enhance security and data protection, and promote open banking.

The ratification of the recent revision to PSD2 fosters growth in open banking in Sweden, resulting in innovative fintech products such as digital identity BankID. This innovative system leverages secure certificates and biometric authentication to enhance security. Users across Sweden rely on this innovative system for secure authentication and digital signatures.

The adoption of open banking greatly benefits Sweden’s cashless initiative. Companies such as the Swedish payment platform Open Payments enable real-time payments directly from consumers’ bank accounts and facilitate seamless bank-to-bank transfers without intermediaries. These capabilities are accelerating the growth of account-to-account (A2A) payments and solidifying the foundations of a cashless economy.

Government plans new regulations to improve consumer protection

Alternative payment methods (APMs) such as Buy Now Pay Later (BNPL or simply Pay Later) have become essential to Sweden’s cashless success. Klarna has emerged as the leading provider of BNPL solutions, with other players, including Walley, Qliro, and Zaver, also growing their presence. BNPL’s seamless integration with all major e-commerce platforms, technology partners, and payment service providers (PSPs) enhances its accessibility and adoption.

Regulators plan to fully implement the updated regulation, the Consumer Credit Directive 2 (CCD2), by Q4 2026, aiming to make APMs even more accessible and safer for consumers. Under the directive, APM providers must conduct in-depth assessments of credit liability to ensure responsible lending, expand coverage of interest-free loans under €200, and comply with clearer advertising rules that include mandatory warnings when consumers take on debt.

AI and Blockchain facilitate secure and automated transactions

Tapping into the growing prevalence of cryptocurrency, the Riksbank has been exploring the development of its digital currency, e-Krona, based on distributed ledger technology (DLT), which offers a more secure digital payment method.

The Riksbank launched several pilot programs between 2021 and 2024 to explore the application of e-Krona in both retail and wholesale transaction setups. The bank expects this token-based, state-backed digital currency to complement existing payment systems and enhance financial stability. It also aims to promote greater inclusivity by acting as a public alternative to cash.

Technology is also driving a change in consumer preference for digital payments. The growing integration of IoT and AI enables seamless and automated transactions, further accelerating the country’s transition to a cashless society.

Although the vast majority of payments in Sweden are already digital, there is no precise data on how often consumers use voice‑activated transactions via Google Home, Alexa, or similar platforms. The rapid integration of payment apps with these connected devices suggests a strong likelihood that voice-activated and IoT-based payment solutions will gain traction in the future.

Added compliance and limited infrastructure access challenge fintechs

Lack of access to central financial infrastructure is a significant challenge for most fintech companies, forcing them to rely on banks and other intermediaries to provide essential financial services. This results in higher costs, reduced efficiency, and a limited ability to compete with traditional financial institutions.

Infrastructure upgrade and scalability

The Riksbank is looking to modernize the payments infrastructure to facilitate the integration of more fintech companies with its RIX payment system. This modernization aims to support the growing number of fintech companies adopting new cashless payment technologies while ensuring the stability and resilience of Sweden’s payment infrastructure.

e-Krona, albeit still in its pilot phase, presents a transformative initiative. However, the government must ensure scalability for successful widespread adoption among merchants. Processing a large volume of transactions without compromising speed or security remains a significant hurdle. Moreover, e-Krona must seamlessly integrate with Sweden’s payment systems, such as Swish.

Regulatory compliance

Fintech companies seeking to enter Sweden often find it difficult to navigate the complex regulatory landscape set by the Swedish Financial Supervisory Authority (Finansinspektionen). According to a survey by SweFinTech, an independent financial association, 82% of its fintech members reported being weighed down by the additional burden of anti-money laundering and combating the financing of terrorism (AML/CTF) regulations. Companies are increasingly implementing Regulatory Technology (RegTech) solutions to monitor transactions, ensure data integrity, and comply with Sweden’s national and international regulations.

As digital payments increase, merchants must also invest in cybersecurity measures against rising threats. This compounds costs due to high interchange fees, ultimately reducing profit margins.

Potential disruptions and cyberattacks

Disruptions and cyber risks regarding the country’s payment network are also a concern, prompting a cautious approach. Between 2023 and 2024, brief outages disrupted critical digital payment infrastructure, affecting the Riksbank’s RIX system and the supporting systems for Swish, including Bankgirot, Getswish AB (Swish), and BankID.

In these cases, the disruption did not cause major issues. However, with growing concerns about cyberattacks amid Europe’s uncertain geopolitical climate, Sweden is taking steps to protect its cashless economy. To reduce the impact of possible outages, the Riksbank is considering a system that would allow offline card payments for essential goods during disruptions lasting up to seven days.

The Swedish government has also encouraged people to keep enough cash on hand to cover a week’s worth of necessities, helping households stay prepared in case of a cyberattack.

EOS Perspective

Sweden’s swift move towards becoming cashless reflects the country’s focus on digitalization, innovation in fintech, and regulatory changes. The growing adoption of platforms such as Swish and Klarna suggests that Swedish consumers are highly tech-savvy, regardless of age. This trend also indicates that flexible payment solutions can drive consumer behavior to prefer digital payment methods over cash.

The integration of blockchain and IoT technologies into payment systems is likely to offer new opportunities in improving the efficiency and security of digital transactions, reinforcing Sweden’s position as a global leader in cash-free transactions.

There is significant room for developing and launching innovative financial tools and services, offering opportunities for fintech companies. Real-time payment innovations, such as Swish, and blockchain-based solutions that benefit from the rise of decentralized finance (DeFi) offer promising growth opportunities. RegTech tools that improve digital identity verification, AML compliance, and AI-driven financial planning tools may also witness growth.

Sweden’s strict regulatory and compliance requirements, as well as the difficulty of obtaining access to central financial infrastructure controlled by established banks, remain challenging, particularly for fintech companies attempting to enter the market. Arbitrary de-risking by banks, which has affected nearly 40% of fintech companies in 2023 by restricting banking services, further challenges companies.

Nonetheless, open-banking initiatives that grant access to third-party providers suggest a shift toward a more inclusive economy, enabling greater competition, easier market entry for fintech companies, and broader access to digital payment solutions for both consumers and businesses.

Further enhancements in financial infrastructure will support a cashless economy. Modernization of the Riksbank’s RIX payment system will enable more fintech companies to participate, while also facilitating integration into Sweden’s payment system.

The potential introduction of e-Krona offers further opportunities to increase inclusivity, which in turn boosts cashless adoption. However, we must wait and see how it evolves as the Riksbank continues to monitor the development of other digital currencies, such as the Digital Euro.

While Sweden has made significant strides toward its cashless vision, progress may stall due to Europe’s current scenario, amid a vulnerable political environment and the risk of susceptibility to cyberattacks. Nevertheless, the country has demonstrated a clear trend toward becoming a digital-first economy, evident in its low reliance on cash usage and the ongoing development of a robust digital payment infrastructure.

12/12/2024by EOS Intelligence EOS Intelligence No Comments

Estonia’s Rise as Europe’s Fintech Powerhouse

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Estonia, a small Baltic country with a population of 1.4 million, is in the news for all the right reasons: its burgeoning fintech sector. With a market size of €15.2 billion in 2023 and projected growth of 5.7% CAGR from 2023 to 2028, Estonia’s number of fintech companies has increased by 23% from 2020 to 2023. The country has 264 fintech startups, half emerging between 2020 and 2022. Strategic investments in digital infrastructure, a progressive regulatory environment, and a tech-friendly culture make Estonia a leading hub for fintech innovation in Europe.

Estonia has become an important name in the fintech sector ever since its financial institutions started using fintech in the early 2000s. It has become the leading fintech hub in Europe, with 2.3 fintech unicorns (startups with a valuation exceeding US$1 billion) per million population.

Most fintech startups, accounting for 87% of all fintech companies in Estonia, fall into six categories: digital asset exchange (33%), digital lending (15%), enterprise technology provisioning (14%), digital payments (11%), wealthtech (9%), and digital capital raising (6%).

Startups dominate Estonia’s fintech landscape with fewer established companies, indicating a favorable environment for new players. Digital asset exchange services that facilitate the trade of cryptocurrencies or digital currencies for other assets form the lion’s share of these startups. This includes Tallinn-based companies such as AsicVault and Guardtime.

Finding customers is a concern for Estonia’s fintech sector

Fintech is flourishing in Estonia despite various challenges that players must navigate. Typically, these challenges affect the smallest and newest entrants to the market the most.

One of the significant challenges that businesses can expect is finding loyal customers for their solutions, according to the 2023 report by the TalTech School of Business. In their research, the respondents indicated finding customers as the most critical problem in two survey editions, 2021 and 2023.

Since Estonia has a small population of 1.4 million, the domestic market is relatively small. Businesses across sectors, including fintech, often face limitations in expanding their customer base. This can force companies to look beyond national borders to achieve significant growth, which can be difficult for new players.

Estonia’s Rise as Europe’s Fintech Powerhouse by EOS Intelligence

Rising costs are affecting smaller and newer players

The financial side poses a substantial challenge for players with limited budget planning to start and expand a fintech firm in Estonia. Estonia used to be a place of low living costs and cheap labor since its independence in 1991. However, the rising operation costs now affect the fintech landscape. A 2023 report published by the European Commission indicated that in the fourth quarter of 2022, compared to the same period in the previous year, Estonia saw a 10.1% increase in hourly wage costs. This can harm small new players looking to enter Estonia’s fintech landscape.

Competition with Big Tech in foreign markets can challenge expansion

Estonian fintech companies attempting to expand into more mature markets can face several hurdles. For example, a high degree of sophistication and regulation characterizes the UK financial services sector, a desired expansion target, leaving little room for new entrants without an established brand presence or a solid track record.

Establishing trust is paramount for fintech startups, as consumers and businesses often prefer providers with known reputation, selecting them through word of mouth or established market presence. As a result, new entrants must devise comprehensive (and often cost-intensive) marketing strategies to overcome these initial credibility barriers.

Increased competition from established financial institutions that leverage their substantial resources to compete with startups can exacerbate these challenges. Big Tech firms such as Google, Amazon, and Apple have also begun to venture into the financial services sector. These companies possess strong brand recognition, customer trust, and rich data sets, enabling them to overshadow smaller fintech operations.

Cross-border expansion signals Estonia’s thriving fintech sector

Estonia’s cross-border expansion activities highlight its flourishing fintech sector. Fintech ranks as the second largest industry within the Estonian startup ecosystem, following business software and human resources, accounting for 13% of the nation’s startups. In terms of revenue, it also holds the second position, generating €196 million in turnover as of 2023.

Estonian fintech startups are actively pursuing opportunities beyond national borders. For instance, the financial cybersecurity firm Salv, based in Estonia, has extended its operations to Latvia and is planning further expansion to Lithuania and the UK. The firm aims to promote its AML solution, Salv Bridge, in these markets.

Additionally, in June 2024, Depowise, a startup located in Tallinn, announced its plans to expand into Ireland and the UK to enhance its market presence in the region.

Estonian fintech startups are increasingly seeking opportunities outside their home market, demonstrating the sector’s robust success and appetite for expansion.

Several catalysts are fueling the growth of Estonian fintech

Ease of doing business

The country ranks 18^th in the World Bank’s ease of doing business index, beating more developed countries such as Germany (22^nd), Canada (23^rd), and Ireland (24^th) as of 2019. This favorable business environment in the country is one of the main factors making it an attractive location for fintech businesses. According to the World Bank, the country has a highly conducive tax system, ranked 12^th in the ease of paying taxes.

Efficient corporate tax systems

Due to its efficient tax policy and straightforward tax compliance frameworks, Estonia holds the top spot in the 2023 International Tax Competitiveness Index published by Tax Foundation, a US-based think tank. This allows companies to spend considerably less time (five hours per year in Estonia compared to 42 hours per year in an average OECD country) on tax-related tasks.

The Estonian tax system also boasts a similarly low compliance burden (resources and costs associated with complying with regulatory requirements) for other taxes, including value-added tax (VAT).

The country’s corporate tax rate is 20%, but it only applies to distributed profits. This means that if a company reinvests its profits back into the business, it does not pay any corporate income tax until it distributes those profits as dividends. This has significantly encouraged reinvestment, growth, and expansion of businesses, including fintech companies.

Internet freedom

Internet freedom is robust in Estonia, and the country is known for its numerous e-government initiatives. For the past several years, Estonia has maintained the second position globally in the Freedom on the Net reports by the US-based NGO Freedom House, indicating a very high internet freedom rating in the country. This minimal restriction on online content facilitates easy information and idea transfer and helps businesses, including fintech companies, to flourish.

Cybersecurity

Though online activities have minimal restrictions, the Estonian authorities have implemented proactive measures to ensure cybersecurity. The 2020 Global Cybersecurity Index (GCI) published by the International Telecommunication Union (ITU) ranks Estonia as the third most cybersecure nation. This is especially beneficial for fintech companies since most of their operation is online.

Estonia is a cashless society with around 99% of transactions occurring digitally. This creates a significant demand for innovative fintech solutions. Startups and established companies take this as an opportunity and offer services such as digital wallets, payment gateways, and peer-to-peer lending, among others, to which strong cybersecurity is essential.

E-residency scheme

Estonia’s e-residency program supports fintech investments by allowing foreign entrepreneurs to establish businesses remotely without a physical office. This program provides online business owners, digital entrepreneurs, and freelancers with a digital Estonian ID, granting access to various local services such as business registration, banking, payment processing, and tax management.

Since its introduction in 2014, the e-residency program has grown significantly, with 117,000 individuals from 185 nationalities obtaining e-resident status and creating over 31,800 Estonian companies. This represents roughly one in five new companies annually and links 38% of startups to e-residents. The initiative has also contributed €244 million to Estonia’s economy, generating €67.4 million in direct revenue in 2023 alone, with associated costs of €7 million, achieving a nearly tenfold return on investment.

Regulatory sandboxes

A regulatory sandbox (RS) is a framework established by regulators that allows businesses to test new products, services, or technologies in a controlled environment for a specified time. This concept is prevalent in various sectors, including finance, transportation, and healthcare.

In March 2024, Estonia expanded its RS through the Accelerate Estonia program to support non-fintech startups, inviting a medical startup, Your Cue, and a clean energy startup, O-Innovations. While regulatory sandboxes are more common in the US fintech sector, European countries such as the UK, Poland, and Spain are also developing their own. As of October 2023, there were 14 fintech sandboxes in 12 EEA countries, including Estonia, which launched its sandbox in August 2023 but has yet to invite any fintech participants.

Technological advancements dictate the direction of development

The use of newer and more innovative technologies is on the rise. Many Estonian fintech startups now use technologies such as artificial intelligence (AI), machine learning (ML), the Internet of Things (IoT), etc.

An example is Depowise, which has developed innovative AI-powered solutions to automate critical functions for financial institutions, including compliance oversight, cash flow monitoring, and digital asset safekeeping.

Companies such as Value.Space, an insurtech firm founded in Estonia and currently headquartered in London with an operating office based in Tallinn, uses deep tech (advanced technologies engaged to address and revolutionize the fields they are used in) such as InSAR (Interferometric Synthetic Aperture Radar), AI, predictive analytics, and satellite imagery to help businesses monitor and assess the risk of damage to commercial assets.

Open banking and embedded finance are the budding trends in Estonia’s fintech solutions developments. BaaS (Banking as a Service) enables secure data sharing and collaboration between financial institutions, technology companies, and customers. Open banking facilitates the entry of new players into the Estonian market through strategic partnerships with local fintech companies. This dynamic allows fintech and technology companies to challenge traditional financial models, creating innovative customer engagement methods with financial institutions. Furthermore, open banking grants developers access to an extensive financial data repository. This accessibility has spurred the emergence of novel fintech business offerings, including budgeting applications, robo-advisors, and automated savings solutions.

Embedded finance involves fluidly incorporating financial services and products into non-financial platforms, such as e-commerce websites, mobile apps, or other digital landscapes. One of the leading examples of fintech companies in Estonia leveraging embedded finance is Inbank, which has developed a portal for solar panel installers to provide financing solutions to their customers.

Opportunities for financial cybersecurity players emerge with increasing crime

Online financial crime and money laundering protection are also gaining traction in the development of fintech solutions. This has particularly accelerated following the 2007 mass cyberattack on a range of institutions and the 2017 money laundering scandal involving Danske Bank’s Estonian branch. Since those events, Estonia has seen a surge in demand for services and products providing solutions in compliance and AML measures.

An example of a solution meeting this demand is SalvBridge, Salv’s anti-money laundering solution, which uses advanced analytics and ML to detect and prevent financial crimes in real time. It also helps financial institutions meet increasingly stringent regulatory requirements and combat money laundering effectively.

Similarly, Tallinn-based Veriff offers solutions to help reduce fraud and ensure regulation compliance. Veriff protects against identity fraud and theft by automatically verifying customer identities through an AI system that assesses various technological and behavioral factors, including facial recognition.

Serokell is another Tallinn-based R&D company offering cybersecurity solutions for fintech companies. Its solutions use functional programming, making it ideal for the complex fintech sector.

Demand for such solutions will likely continue to grow, offering lucrative opportunities for players operating and innovating in this space.

Estonia’s fintech scene is shifting towards sustainable investing

As with many other industries, sustainability and environmental awareness have entered the fintech playing field. Some players attempt to improve their sustainability score while expanding their investment portfolios to include sustainable exchange-traded funds.

Companies that operate using carbon credits and sustainability fintech players are some of the newer market entrants. An example is Grünfin, founded in 2020, which facilitates investments in sustainable stocks.

Several fintech companies are also increasingly leveraging carbon credits to enhance their sustainability practices and offer financial solutions to clients. A notable example is the partnership between XTCC, an Estonia-based company specializing in exchange-traded carbon credits, and Finmaal, a UAE-based fintech platform. This collaboration allows customers purchasing financial products, such as insurance and banking, to offset their carbon emissions at the point of sale, thus integrating sustainability measures with financial transactions.

These activities reflect a broader trend in which fintech firms are leveraging cloud technologies and financial instruments to maintain a lower carbon footprint while contributing to carbon neutrality goals. It is fair to expect that the trend of focus on the environment and sustainability will gain more traction in the future.

EOS Perspective

Estonia is emerging as a strong and resilient ground for fintech startups as well as established fintech businesses. Given the country’s favorable conditions, this growth will likely continue. Industry experts expect the market to advance further in key areas such as digital payments, blockchain technology, and AI-driven financial services.

While no single company has a dominant market share, notable players such as Wise, Guardtime, and Bolt are likely to continue strengthening their positions. These companies have the financial resources, established brand presence, and technological capabilities to drive innovation and expand their market reach. Players can also expect increased competition from established financial institutions, such as banks, which are likely to enter the space.

New players and startups can expect a better level playing field in niche fintech areas, such as financial security or climate fintech, and other related areas often working in tandem with fintech, e.g., insurtech or regtech.

With several countries, including China, Egypt, Qatar, Oman, Morocco, Algeria, and Tunisia, banning bitcoin or other cryptocurrency mining due to high energy use and safety issues, climate fintech startups can use this opportunity to expand their operations to offer more sustainable financial solutions.

Fintech startups offering cyber protection and customer data safety are expected to grow significantly in the coming years, especially with large financial institutions such as US-based Evolve Bank & Trust experiencing cyberattacks and a subsequent data breach in 2024.

The new tax policies scheduled to take effect in 2025 will increase individual and corporate tax rates from 20% to 22%. These changes are likely to create some ripples in the fintech sector, at least in the portion of players’ profits that are not reinvested. The new tax laws may increase the operating costs for fintech companies, which could somewhat stifle innovation. This new development may curb investment, especially for small, budding players.

Over time, consolidation is likely to occur as the Estonian fintech market will head towards maturing. Larger companies may acquire smaller startups to expand their product offerings and increase their market share.

While development is rife in the global fintech sector, with its tech-savvy culture, strategic digital infrastructure investments, and progressive regulatory conditions, Estonia will likely carve out an even more prominent place in the fintech landscape.

21/11/2024by EOS Intelligence EOS Intelligence No Comments

Open Banking Sparking a Wave of Innovation in Financial Services

The adoption of open banking is leading to innovation across financial solutions such as account-to-account payments (A2A), personal finance management (PFM) apps, embedded finance, and banking-as-a-service (BaaS) by enabling real-time data-driven insights and personalized financial services. It is paving the way for a more dynamic financial landscape. Open banking has evolved rapidly since the revised Payment Services Directive (PSD2) came into force in Europe. While challenges exist, adopting open banking solutions, aided by introducing regulatory and security measures, holds the potential to revolutionize the financial services sector.

The introduction of APIs transformed banking services

Open banking has emerged as a transformative force, changing how financial data is shared, and services are offered to consumers. It securely provides third-party financial service providers access to consumer’s financial information with their consent through an application programming interface (API). It aims to foster innovation in financial services, encourage healthy competition, and give consumers more control over their banking information. Several banks across countries, including Citi, Barclays, and Deutsche Bank, have started providing access to their APIs.

Regulatory initiatives and consumer demand lead to open banking growth

While open banking has existed for a long time, it gained traction when the PSD2, a European regulation focused on creating a more open, competitive, and secure payment landscape across Europe, came into effect in 2018.

Since then, several countries have introduced open banking regulations to support its adoption. For instance, in the UK, the open banking initiative, led by the Competition and Markets Authority (CMA, the UK’s principal authority responsible for strengthening business competition and preventing anti-competitive activities), became effective in 2018. In addition to the European countries, Australia, New Zealand, Brazil, and South Africa, among others, have introduced regulatory measures to drive the adoption of open banking.

Countries across the globe are adopting various approaches to open banking, including regulatory-led, market-led, and hybrid approaches. While Europe has taken a regulatory-led approach, adopting open banking in the USA, Canada, and China is driven by consumer demand and technological innovations. Consumers prefer to have control and transparency over their financial data. While there are currently no regulatory frameworks for open banking in the USA, the Consumer Financial Protection Bureau (CFPB) has proposed rules to protect consumer data rights, which will aid in facilitating the adoption of open banking.

Several countries, such as India, South Korea, Japan, Hong Kong, Russia, and Singapore, have adopted a hybrid model, including both regulatory and market-led initiatives. These countries do not have mandatory open banking regimes, but policymakers are looking to introduce initiatives to accelerate open banking adoption. For instance, in Singapore, the Monetary Authority of Singapore (MAS) and the Association of Banks have published an API playbook. This publication aims to support data exchange between banks and fintech players.

The growing emphasis on introducing regulatory measures to ensure data security will likely drive the adoption of open banking.

Open Banking Sparking a Wave of Innovation in Financial Services by EOS Intelligence

Open banking is driving innovation in financial solutions

The adoption of open banking is transforming financial solutions, including A2A payments, variable recurring payments (VRP), PFM apps, BaaS, and embedded finance, by enabling faster, more convenient, secure, and personalized financial services.

A2A payments and VRP

Open banking allows secure access to real-time bank data to third-party providers, enabling process automation, speeding up A2A payment transfers, and providing a better user experience. Increasing adoption of open banking globally is expected to make international A2A payments more viable and secure.

Digital wallet platforms such as Apple Pay, Google Pay, and Stripe are looking to integrate open banking on their platforms to provide enhanced user experience. In September 2023, Apple soft-launched a new iPhone wallet app in the UK integrated with an open banking framework to replace traditional banking apps as the preferred platform for accessing information related to their account balance, spending history, etc.

Open banking also encourages the widespread adoption of variable recurring payments by giving consumers more transaction control and transparency. The use of variable recurring payments is expected to increase across various commercial payment services, such as utility bills, subscriptions, and insurance premiums, in the coming years.

PFM apps

Access to financial data enables PFM apps to share more effective and personalized financial advice with consumers. A real-time snapshot of the overall financial health of the consumers helps them make long-term financial decisions.

BaaS

Banking-as-a-service platforms are likely to develop due to the adoption of open banking, allowing non-banking entities to provide financial services without becoming certified banks. This offers consumers a variety of payment and credit options, as well as more personalized finance solutions, expanding the industry offering.

Integrating BaaS in retail is being explored to improve customer loyalty programs and provide seamless payments. Also, the scope of services is likely to expand rapidly, from offering banking services to individual consumers to small and medium-sized enterprises (SMEs) and large corporations in the near future.

Embedded finance

Open banking has become the driving force behind the rise of embedded finance, enabling businesses and corporate clients to enhance operational efficiency and user experience. While retail and e-commerce platforms are some of the first to adopt embedded finance, the adoption is likely to increase in less digitalized spaces such as real estate as well.

Synergy with AI and blockchain offers scope for advanced innovation and security

Open banking provides a data-rich environment by aggregating data from various financial institutions for AI algorithms to analyze and utilize for decision-making. It is expected to benefit AI algorithms further by incorporating new features such as data categorization and anomaly detection in the coming years.

On the other hand, AI is likely to increase the effectiveness of open banking by analyzing individual consumer data and enabling the offering of personalized services. AI and open banking will likely help financial institutions develop innovative products.

While both AI and open banking complement their financial services, they can lead to data misuse or unauthorized access concerns, highlighting the need for strong regulatory measures to keep up with the evolution of open banking and AI.

Blockchain technology will likely become more common in open banking as it will enhance the security and transparency of financial transactions. It will likely reduce the risk of data breaches and unauthorized access to consumers’ finances. Additionally, it will likely make it easier for consumers to share their data by simplifying the authentication and consent processes.

Open banking services have expanded from basic payment initiation to open finance

The open banking framework has evolved from basic account information and payment initiation services to open finance, including access to data from various accounts, including savings, investments, pensions, insurance, and mortgages.

Countries such as India, South Korea, Australia, and Brazil have moved from open banking to open finance to develop a more connected financial ecosystem. In February 2024, South Korea also introduced two initiatives focused on including business data and providing offline open banking services.

In Europe, the European Commission is also pushing towards open finance by introducing the Financial Data Access (FiDA) regulation, a framework to enable secured sharing and access of financial data.

Open banking will diversify consumer options, with non-financial companies such as telecom providers, e-commerce platforms, and utility companies offering innovative financial products. They will likely enter into partnerships with banks to provide integrated services to consumers, enhancing their offerings and creating an interconnected financial ecosystem.

Lack of standardized APIs affects the open banking adoption

While open banking is gaining traction, specific challenges, such as lack of standardized APIs, integration with legacy systems, privacy compliance, and data security, are affecting its adoption.

The lack of standardization of APIs across financial institutions is the key challenge in adopting open banking. Third-party providers are usually unable to adapt to different APIs and provide seamless data sharing between systems.

Various financial institutions also face difficulty integrating open banking into their legacy systems, making the integration process complex and expensive. Banks must first update their systems by investing in technology upgrades and partnering with fintech solutions providers to overcome integration challenges.

As the adoption of open banking increases, the chances of data breaches might also increase, highlighting the need to protect customer data and compliance with privacy regulations. Banks are looking to adopt measures such as encryption, clear usage policies, and regular audits to protect customer data. The European Union has also put regulations such as the General Data Protection Regulation (GDPR) and the Digital Operational Resilience Act (DORA) in place to protect customer data and improve the digital security of financial institutions. Advanced security measures solutions, including tokenization and dedicated API gateways, can also help safeguard customer data.

Lack of awareness among consumers is another key challenge. Users are often unaware of open banking and are reluctant to share their financial data due to privacy concerns. Initiatives aimed at educating the users about security and regulatory norms related to open banking by banks can help overcome this challenge and drive adoption.

EOS Perspective

The shift to an open banking model can transform the future of digital banking. The key driving factors for the users are the ease and clarity of the interface, which are likely to replace the traditional banking infrastructure and ownership of consumer data.

The expected introduction of PSR1 in 2026 will likely improve competition and consumer protection in the payments market, which will likely drive the adoption of open banking. PSR1 will help enhance fraud prevention, improve consumer rights and protection, standardize payment regulations, and enhance open banking functions.

The introduction of regulatory and security measures and growing awareness about open banking and its benefits are also likely to aid this growth. A phased implementation of open banking will help with greater adoption of open banking by gradually introducing the concept to the consumers and helping them adapt.

Open banking will benefit banks by providing better customer insights, encouraging innovation, and creating an additional revenue stream through API monetization. However, increasing competition from fintech and non-financial institutions entering the market will likely pressure banks to transition to open banking. The shift to open finance will further increase the competition in the industry. We will likely witness banks entering partnerships with fintech players to develop and offer innovative financial services for their consumers.

The financial sector is embracing open banking as a means to offer creative and innovative financial solutions to enrich the user experience. Open banking will likely evolve into a broad ecosystem of connected services, streamlining the consumers’ products, services, and applications into one, providing a seamless experience.

22/08/2024by EOS Intelligence EOS Intelligence No Comments

What’s Fueling Asia’s Drive to Develop Wholesale CBDCs?

The emergence of Central Bank Digital Currencies (CBDCs) has become a central focus in the global financial space, as it offers the potential for revolutionary shifts in how the world conducts and manages monetary transactions. While much of the spotlight has been on retail CBDCs, wholesale CBDCs are gaining momentum globally. Asia is leading the pack in developing wholesale CBDCs that offer opportunities that may significantly impact the global financial landscape.

Asia is outpacing developed countries in the drive toward wholesale CBDCs

Wholesale CBDCs are digital forms of a country’s fiat currency. Unlike retail CBDCs, only a limited number of entities can access wholesale CBDCs, which are designed for undertaking interbank transactions and settlements. The concept of wholesale CBDCs is similar to currently available digital assets used for the settlement of interbank transactions, with the key differentiation being the use of technologies such as distributed ledger technology (DLT) and tokenization.

Wholesale CBDCs have garnered global interest with central banks. Facebook’s (albeit failed) attempt to launch its Libra cryptocurrency in 2019 was a breaking point for blockchain technology’s use in global finance, eventually spurring the development of wholesale CBDCs. Initially launched as a measure to counter private cryptocurrencies, wholesale CBDCs are fast emerging as a potential disruptor in the fintech space.

Currently, more than 30 countries are researching the use of wholesale CBDCs. Interestingly, about half of these countries are from Asia. The development of wholesale CBDCs in Asian countries has outpaced the efforts of financially strong economies such as the USA and the UK, as these CBDCs offer more tangible benefits to developing economies in Asia than their more developed counterparts.

Several Asian countries have engaged in pilot programs, and proof-of-concept runs to explore the use of wholesale CBDCs to improve the efficiency of domestic large-value transactions and cross-border transfers.

China has been at the forefront of the development and widespread testing of wholesale CBDCs. Several Southeast Asia and the Middle East countries, including India, the UAE, Thailand, and Singapore, have launched pilot programs to explore the viability of wholesale CBDCs and test interoperability for cross-border transactions.

Achieving faster and cheaper cross-border transactions is key to Asian central banks

Growth in global trade has resulted in exponential growth in cross-border transaction volumes. However, these cross-border transactions are faced with challenges. There may be involvement of potential intermediaries, varying time zones, and regulatory frictions that may cause slower settlement. Financial systems such as SWIFT have a stranglehold on the cross-border transaction ecosystem, with many of these transactions using SWIFT messaging to settle payments.

Potential intermediary fees and forex-related charges also lead to increased transaction costs. According to World Bank’s estimates, transaction costs for cross-border transactions may range up to 6% of the transfer value, a significant surcharge.

Removing friction associated with cross-border transactions is a key goal behind Asian countries’ push toward exploring wholesale CBDCs.

A growing interest in wholesale CBDCs is attracting investments in building large-value payment infrastructures in Asia, allowing for faster and more efficient cross-border transfers. Wholesale CBDCs enable central banks to transact directly with each other, removing the involvement of multiple intermediaries and resulting in quicker transaction settlement. This also results in the elimination of intermediary fees to help lower transaction costs.

Technology also adds elements of security and traceability to these digital transactions. It also offers the potential to program them by automating or restricting payments if certain conditions are met.

Challenging US dollar dominance in cross-border settlements offers additional motivation

Several Asian countries are also looking to reduce their reliance on financial settlement systems that involve US dollar reserves. Currently, most cross-border transactions involve the use of the US dollar. Countries with limited forex reserves also face the challenge of outgoing reserves, resulting in potential currency inflation and adding to the already high transaction costs.

Wholesale CBDCs offer several Asian countries, particularly those with limited US dollar reserves, an opportunity to directly transfer the amount in their local digital currencies and eliminate the need for US dollars in bilateral transactions.

Developing Asian economies, such as China and India, with significant cross-border transactions, are looking to promote their CBDCs as a potential reserve currency in the Asian region that would allow cross-border settlement directly in the digital currency. It is also in the interests of countries such as China to develop its CBDC (e-CNY) as a potential alternative to the US Dollar in cross-border trade to mitigate any potential currency-related challenges posed by economic sanctions from the USA and EU.

What’s Fueling Asia’s Drive to Develop Wholesale CBDCs by EOS Intelligence

Tandem development and collaborations offer tailwinds to CBDC projects in Asia

Central banks of several Asian countries are undertaking information sharing and tandem development of CBDC infrastructures to mitigate some challenges associated with CBDC.

Recent pilot projects such as mBridge, launched by central banks of China, the UAE, Thailand, and Hong Kong, have been testing the use of a common ledger platform for real-time peer-to-peer transactions. The launch of several other projects, such as Project Mandala (involving Singapore, South Korea, and Malaysia) and Project Aber (involving Saudi Arabia and the UAE), is laying the groundwork for the widespread implementation of wholesale CBDCs.

Another potential avenue for collaboration includes forming partnerships with central banks to maintain reserves of digital cash to facilitate direct settlement. China, in particular, plans to develop e-CNY as a potential reserve currency alternative to the US dollar.

Interoperability and ownership are key challenges to CBDC implementation

While the use of wholesale CBDCs certainly comes forward as a boon, there are challenges in using these technology-driven digital currencies. CBDCs may have varying protocols, and interoperability between different CBDC frameworks remains a key challenge for implementing wholesale CBDCs for cross-border transactions.

Establishing common technical and operational standards is essential to ensure CBDC interoperability. Currently, most pilot programs involve CBDCs with common or similar technological frameworks and rules, which limit the application of wholesale CBDCs to a certain number of compatible entities.

Recent research projects are laying the groundwork for CBDCs’ compatibility with various ledgers and technical frameworks. However, significant testing will be required before compatibility can be established across the Asian region.

Ownership, governance, and regulatory oversight of wholesale CBDC technologies are other key concerns. Doubts exist over who will oversee the transactions and ledger entries, especially for any multi-party cross-border transaction.

Systems must also to adhere to anti-money laundering and counter-terrorism financing regulations. Varying financial laws may also hamper the seamless implementation of these anti-money laundering and counter-threat funding regulations across the region.

Lastly, like any digital asset, CBDCs are also susceptible to cyberattacks.

EOS Perspective

Wholesale CBDCs can potentially change the nature of cross-border transactions across Asia and globally.

We are likely to witness significant growth in test runs and pilot programs by several Asian countries to provide proof of concept for the applicability of wholesale CBDCs in countering the challenges associated with cross-border transactions. We can expect a spurt in CBDC alliances and treaties among countries with significant bilateral and intra-regional trade. Simultaneously, it may result in slightly reduced transaction volumes going through existing cross-border financial systems such as SWIFT.

The next stage of CBDC evolution is likely to coincide with the emergence of pilot programs involving multiple CBDCs with different technological frameworks, creating possibilities for easier and seamless cross-border transactions among banks or countries without any existing bilateral or regional partnerships.

These developments are likely to be aided by the development of enabling technologies such as RegTech (regulatory technologies) and SupTech (supervisory technologies), which could provide the sandbox environment for widespread testing of the CBDC systems, as well as lay the groundwork for potential regulatory systems to manage these infrastructures.

With the bulk of cross-border transactions still being conducted in the US dollar, wholesale CBDCs do not pose any imminent threat to its dominance. The US dollar’s future prospects in this role will depend on whether digital currencies such as e-CNY take off as a reserve currency, which is unlikely, at least in the short- to medium-term.

The overall success of wholesale CBDCs will depend on the level of cooperation that countries across Asia can develop over the next few years.

15/02/2024by EOS Intelligence EOS Intelligence No Comments

eNaira: Is It Here to Stay or Are Nigerians Going to Say ‘Nay’?

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Although Nigeria boasts about its digital currency launch, there are contradictory opinions about eNaira’s subsequent adoption. The eNaira has the potential to impact Nigeria’s economy positively, however, it is not possible without its widespread acceptance.

CBDC – A global picture

Central Bank Digital Currency (CBDC) is virtual currency or money issued and controlled by a country’s central bank. According to the Atlantic Council, a leading US-based think tank, 130 countries were considering a CBDC as of September 2023, while only 35 countries were exploring a CBDC as of May 2020. This steep rise in the number of countries considering CBDC in a span of just over three years shows an increasing interest in CBDC across the globe. Even more so, some 64 countries are already in an advanced phase of exploration of the currency (development, pilot, or launch phase).

Among the G20 countries, 19 are in the advanced stage of developing CBDC, and 9 out of these 19 G20 countries are in the pilot phase. There are some 11 countries that have launched a CBDC. China’s CBDC is in the pilot stage and is presently reaching 260 million people taking part in this pilot while being tested in more than 200 scenarios, including e-commerce, public transit, and stimulus payments. In Europe, the European Central Bank is currently on course to start its pilot for CBDC, the digital euro.

More than 20 other countries are stepping towards piloting their digital currency in 2023. Countries such as Australia, Thailand, and Russia plan on continuing pilot testing. Brazil and India intend to launch their CBDC in 2024.

eNaira – A choice or compulsion?

eNaira is Nigeria’s digital currency, issued and regulated by the Central Bank of Nigeria (CBN) for retail use. It is a liability of the CBN, similar to coins and cash.

Cryptocurrencies such as Bitcoin and Ethereum are similar to eNaira in terms of the underlying Bitcoin technology. Apart from this, both cryptocurrencies and eNaira are stored in digital wallets and can be used for payments and digital transfers across the globe to anyone with an eNaira account at no cost.

However, what makes eNaira different from Bitcoin or Ethereum is that the CBN has access rights controls over the Nigerian digital currency. Secondly, the eNaira is not a financial asset but rather a digital form of the physical naira, to which it is pegged at parity.

With the release of eNaira in October 2021, Nigeria became the first country in the African continent and second in the world after the Bahamas to launch a CBDC. Major motivations behind launching CBDC in Nigeria included encouraging financial inclusion, improving cross-border transactions, complementing the current payment systems, and enabling diaspora remittances. However, the adoption of eNaira has been low, with only 0.5% of the Nigerian population using CBDC within a year of its launch.

In a rather desperate move to compel its people to adopt eNaira, the government caused cash shortages in the country. This resulted in protests, riots, and unrest among Nigerians. As a result of the currency shortages in early 2022, Nigeria witnessed a 12-fold increase in the number of e-Naira wallets to 13 million since October 2021.

As of July 2023, the value of transactions had also seen a 63% rise to N22 billion (US$48 million) since its launch in October 2021. According to the International Monetary Fund (IMF), 98.5% of the eNaira wallets were inactive one year after the launch of the CBDC, meaning 98.5% of eNaira wallets have not been used even once during any given week. These low levels of activity mirror the low public adoption of eNaira.

eNaira Is It Here to Stay or Are Nigerians Going to Say ‘Nay’ by EOS Intelligence

Motivations to launch eNaira: Strong enough to sustain adoption?

CBN conceived multiple advantages of adopting eNaira, such as fostering financial inclusion, facilitating remittances, and minimizing informality in the economy. These serve as motivations for launching eNaira and are expected to take shape with the eNaira becoming more widespread along with strong support of the regulatory system.

Fostering financial inclusion

Currently, eNaira can be used by people with bank accounts, but the idea is to expand the coverage to anyone with a mobile phone, even if they do not have a bank account. Around 38% of the adult population in Nigeria do not have bank accounts. If this section of the adult population could be provided with access to eNaira through mobile phones, Nigeria could potentially achieve 90% financial inclusion.

Facilitating remittances

Nigeria is one of the Sub-Saharan African countries that receives considerable remittances. In 2019, Nigeria received US$24 billion in remittances, which are usually made through international money transfer operators. These operators charge around 1-5% of the value of the transaction as their fee. One of the motivations for launching eNaira is to reduce the costs associated with remittance transfers.

Minimizing informality in the economy

With more than half of the economy being informal, it becomes imperative for the Nigerian government to introduce a digital currency across the country to reduce the informality in the economy and increase the country’s tax revenues. Therefore, eNaira was launched in Nigeria to strengthen the tax base along with obtaining higher transparency in informal payments.

Can Nigeria overcome implementation challenges to spur eNaira adoption?

It comes as no surprise that Nigeria is facing a range of adoption barriers on its journey to eNaira’s widespread implementation. Apart from perceptual barriers such as considering eNaira wallets as deposits at the central bank, which might decrease the demand for deposits in commercial banks, there are cybersecurity risks and operational barriers linked to eNaira. These adoption barriers to Nigeria’s CBDC include a combination of factors such as lack of required tech infrastructure, lack of training of bank personnel managing the process, trust issues, and electricity and internet issues.

Lack of tech infrastructure

The CBN is looking to revamp the technological platform used for eNaira and was in talks for that with a company called R3 in early 2023. CBN is contemplating having complete control over the platform, while eNaira was initially developed in collaboration with a fintech multinational called Bitt. The change of technology platform vendor in less than two years might suggest a lack of vision of CBN regarding the technological infrastructure necessary for the seamless adoption of eNaira.

Lack of training

The CBN is expected to oversee the ledger and manage the system, while other financial institutions, such as banks, are to provide users with access to CBDC wallets. The bank staff is required to onboard users to the eNaira platform. However, it is observed that the bank staff is not sufficiently trained to be able to seamlessly bring users on board. This, in turn, negatively impacts the adoption of CBDC.

Trust issues

Nigeria has been considered a country with high money laundering and terrorist organizations funding risk (ML/TF). In February 2023, the Financial Action Task Force (FATF), a global money laundering and terrorism funding inspection organization, put Nigeria on its grey list owing to Nigeria not having adequate measures to curb such activities. Similarly, Basel Institute of Governance, a non-profit organization focused on improving governance and preventing corruption and other financial crimes, in its 2022 global ranking on ML/TF risks, placed Nigeria 17^th out of 128 countries, a high spot indicating a significant risk of ML/TF.

In the current design of CBDC in Nigeria, the CBN is equipped to monitor all users’ transactions using eNaira, potentially allowing it to detect and curb ML/TF activities and improve Nigeria’s standing in the risk rankings. However, this has turned out to be a double-edged sword in implementing eNaira. The high level of supervision of all transactions has brought apprehension amongst potential users in Nigeria, most of whom believe that eNaira was developed by the government to monitor the monetary transactions, breaching their right to privacy and potentially giving the government a tool to control them. This lack of trust significantly hampers the adoption of the CBDC in Nigeria.

Electricity and internet issues

With around 92 million people not having access to power in a population of 200 million, Nigeria has one of the lowest electricity access rates globally, as per the Energy Progress Report 2022 published by Tracking SDG 7. At the same time, the internet penetration in Nigeria stands at 55.4% in 2023. Seamless internet connectivity and power access are some of the critical prerequisites for the smooth implementation of the eNaira in Nigeria.

What would give eNaira adoption a much-needed push?

As the challenges to widespread adoption of the eNaira are multipronged, finding solutions to overcome the implementation challenges is not easy or quick.

One of the main infrastructural challenges, inadequate power and internet access, should be among the first to be addressed. One way to approach it is to create offline access to the eNaira platform. To achieve this, the CBN launched the Unstructured Supplementary Service Data (USSD) code for eNaira, meaning that Nigerians without internet-enabled phones can perform transactions with eNaira.

To facilitate rapid and seamless adoption of the eNaira, the CBN must make the CBDC available to everyone with a mobile phone. More and more people should be encouraged to use eNaira by incentivizing them through rebates while paying income tax. Another incentive example dates back to October 2022 when CBN offered discounts if people used eNaira to pay for cabs.

EOS Perspective

The eNaira has the potential to have a significant impact on the Nigerian economy. As transactions using eNaira are fully traceable, more widespread adoption of eNaira is expected to expand the country’s tax base by bringing higher transparency in payments, especially in informal markets. It will undoubtedly result in higher tax revenue, a development welcomed by the government.

With US$24 billion in remittance receipts in 2019, Nigeria is considered one of the key remittance destinations in Sub-Saharan Africa. As remittances are currently burdened with a 1-5% charge of the transaction value, removing these costs through the adoption of eNaira would bring more remittance income to the population and, indirectly, more capital to the Nigerian economy.

With the expanded tax base, cheaper and higher inflows of remittances, facilitated retail payments, welfare transfers, etc., the impact of the eNaira on the Nigerian economy is likely to be quite considerable. Indeed, at the time of launch, the CBN estimated that the eNaira should increase Nigeria’s GDP by US$29 billion over the first 10 years, contributing to the country’s economic growth and development. With the implementation challenges encountered so far, it is clear that these estimations were overly optimistic. Still, how well the CBN can do its homework and undertake well-directed steps to navigate the challenges remains to be seen.

14/10/2020by EOS Intelligence EOS Intelligence No Comments

Agritech in Africa: How Blockchain Can Help Revolutionize Agriculture

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In the first part of our series on agritech in Africa, we took a look into how IT and other technology investments are helping small farmers in Africa. In the second part, we are exploring the impact that potential application of advanced technologies such as blockchain can have on the African agriculture sector.

Blockchain, or distributed ledger technology, is already finding utility across several business sectors including financial, banking, retail, automotive, and aviation industries (click here to read our previous Perspectives on blockchain technology). The technology is finding its way in agriculture too, and has the potential to revolutionize the way farming is done.

This article is the second part of a two-piece coverage focusing on technological advancements in agriculture across the African continent.

Read part one here: Agritech in Africa: Cultivating Opportunities for ICT in Agriculture

State of blockchain implementation in agriculture in Africa

Agricultural sector in Africa has already witnessed the onset of blockchain based solutions being introduced in the market. Existing tech players and emerging start-ups have developed blockchain solutions, such as eMarketplaces, agricultural credit/financing platforms, and crop insurance services. Companies, globally as well as within Africa, are harnessing applications of blockchain to develop innovative solutions targeted at key stakeholders across the food value chain.

Blockchain to promote transparency across agriculture sector

The most common application of blockchain in any industry sector (and not only agriculture) is creating an immutable record of transactions or events, which is particularly helpful in creating a trusted record of land ownership for farmers, who are traditionally dependent on senior village officials to prove their ownership of land.

Since 2017, a Kenyan start-up, Land LayBy has been using an Ethereum-based shared ledger to keep records of land transactions. This offers farmers a trusted and transparent medium to establish land ownership, which can then further be used to obtain credit from banks or alternative financing companies. BanQu and BitLand are other examples of blockchain being used as a proof of land ownership.

This feature of blockchain also enables creation of a transparent environment where companies can trace the production and journey of agricultural products across their supply chain. Transparency across the supply chain helps create trust between farmers and buyers, and the improved visibility of prices further down the value chain also enables farmers to get better value for their produce.

In 2017, US-based Bext360 started a pilot project with US-based Coda Coffee and its Uganda-based coffee export partner, Great Lakes Coffee. The company developed a machine to grade and weigh coffee beans deposited to Great Lakes by individual farmers in East Uganda. The device uploads the data on a blockchain-based SaaS solution, which enables users to trace the coffee from its origin to end consumer. The blockchain solution is also used to make payments to the farmers based on the grade of their produce in form of tokens.

In 2017, Amsterdam-based Moyee Coffee also partnered with KrypC, a global blockchain, to create a fully blockchain-traceable coffee. The coffee beans are sourced from individual farmers in Ethiopia, and then roasted within the country, before being exported to the Netherlands.

This transparency can help food companies to isolate the cause of any disease outbreak impacting the food value chain. This also allows consumers can be aware of the source of the ingredients used in their food products.

Blockchain-based platforms to improve farmer and buyer collaboration

Blockchain can also act as a platform to connect farmers with vendors, food processing, and packaging companies, providing a secure and trusted environment to both buyers and suppliers to transact without the need of a middleman. This also results in elimination of margins that need to be paid to these intermediaries, and helps improve the margins for buyers.

Farmshine, a Kenyan start-up, created a blockchain-based platform to auger trade collaboration among farmers, buyers, and service providers in Kenya. In January 2020, the company also raised USD$250,000 from Gray Matters Capital, to finance its planned future expansion to Malawi.

These blockchain platforms can also be used to connect farmers to other farmers, for activities such as asset or land sharing, resulting in more efficiency in economical farming operations. Blockchain platform can also enable small farmers to lease idle farms from their peers, thereby providing them with access to additional revenue sources, which they would not be able to do traditionally.

AgUnity, an Australian-start-up established in 2016, developed a mobile application which enables farmers to record their produce and transactions over a distributed ledger, offering a trusted and transparent platform to work with co-operatives and third-party buyers. The platform also enables farmers to share farming equipment as per a set schedule to improve overall operational and cost efficiency. In Africa, AgUnity has launched pilot projects in Kenya and Ethiopia, targeted at helping farmers achieve better income for their produce.

A Nigerian start-up, Hello Tractor uses IBM’s blockchain technology to help small farmers in Nigeria, which cannot afford tractors on their own, to lease idle tractors from owners and contractors at affordable prices through a mobile application.

Smart contracts to transform agriculture finance and insurance

Less than 3% of small farmers in sub-Saharan Africa have adequate access to agricultural insurance coverage, which leaves them vulnerable to adverse climatic situations such as droughts.

Smart contracts based on blockchain can also be used to provide crop-insurance, which can be triggered given certain set conditions are met, enabling farmers to secure their farms and family livelihood in case of extreme climatic events such as floods or droughts.

SmartCrop, an Android-based mobile platform, provides affordable crop insurance to more than 20,000 small farms in Ghana, Kenya, and Uganda through blockchain-based smart contracts, which are triggered based on intelligent weather predictions.

Netherlands-based ICS, parent company of Agrics East Africa (which provides farm inputs on credit to small farmers in Kenya and Tanzania) is also exploring a blockchain-wallet based saving product, “drought coins”, which can be encashed by farmers depending on the weather conditions and forecasts.

Tracking of assets (such as land registries) and transactions on the blockchain can also be used to verify the farmers’ history, which can be used by alternative financing companies to offer loans or credits to farmers – e.g. in cases when farmers are not able to get such financing from traditional banks – transforming the banking and financial services available to farmers.

Several African start-ups such as Twiga Foods and Cellulant have tried to explore the use of blockchain technology to offer agriculture financing solutions to small farmers in Africa.

In late 2018, Africa’s leading mobile wallet company, Cellulant, launched Agrikore, a blockchain-based digital-payment, contracting, and marketplace system that connects small farmers with large commercial customers. The company started its operations in Nigeria and is exploring expansion of its business to Kenya.

In 2018, Kenya-based Twiga Foods (that connects farmers to urban retailers in an informal market) partnered with IBM to launch a blockchain-based lending platform which offered loans to small retailers in Kenya to purchase food products from suppliers listed on Twiga platform.

Read our previous Perspective Africa’s Fintech Market Striding into New Product Segments to find out more about innovative fintech products for agriculture and other sectors financing in Africa

And last, but not the least, blockchain or cryptocurrencies can simply be used as a mode of payment with a much lower transaction fee offered by traditional banking institutions.

Improving mobile internet access to boost blockchain implementation

While blockchain has shown potential to transform agriculture in Africa, its implementation is limited by the lack of mobile/internet access and technical know-how among small farmers. As of 2018, mobile internet had penetrated only 23% of the total population in Sub-Saharan Africa.

However, the GSM Association predicts mobile internet penetration to improve significantly over the next five years, to ~39% by 2025. Improved access to internet services is expected to boost the farmers’ ability to interact with the blockchain solutions, thereby increasing development and deployment of more blockchain-based solutions for farmers.

EOS Perspective

Agritech offers an immense opportunity in Africa, and blockchain is likely to be an integral part of this opportunity. Blockchain has already started witnessing implementation in systems providing proof of ownership, platforms for farmer cooperation, and agricultural financing tools.

Unlike Asian and Latin American countries, African markets have shown a relatively positive attitude towards adoption of blockchain, a fact that promises positive environment for development of such solutions.

At the moment, most development in blockchain agritech space is concentrated in Kenya, Nigeria, Uganda, and Ghana. However, there is potential to scale up operations in other countries across Africa as well, and some start-ups have already proved this (e.g. Farmshine was able to secure the necessary financing to expand its presence in Malawi). Other companies can follow suit, however, that would only be possible with the help of further private sector investments.

Still in the nascent stages of development, blockchain solutions face an uncertain future, at least in the short term, and are dependent on external influences to pick up growth they need to impact the agriculture sector significantly. However, once such solutions achieve certain scalability, and become increasingly integrated with other technologies, such as Internet of Things and artificial intelligence, blockchain has the capability of completely transform the way farming is done in Africa.

17/09/2020by EOS Intelligence EOS Intelligence No Comments

Agritech in Africa: Cultivating Opportunities for ICT in Agriculture

2.8kviews

Agriculture technologies in Africa have been undergoing significant development over the years, with many tech start-ups innovating information and communications technologies to support agriculture at all levels. While some technologies have been successfully launched, some are in initial stages of becoming a success. Private sector investments have been the key driving factor supporting the development of agriculture technologies in Africa. In the first part of our series on agritech in Africa, we are examine what impact and opportunities arise from the use of these technologies in Africa.

Agriculture plays a significant role in Africa’s economy, contributing 32% to the continent’s GDP and employing 65% of the total work force (as per the World Bank estimates). Nearly 70% of the continent’s population directly depends on agribusiness. Vast majority of farmers work on small scale farms that produce nearly 90% of all agricultural output.

This article is the first part of a two-piece coverage focusing on technological advancements in agriculture across the African continent.

Read part two here: Agritech in Africa: How Blockchain Can Help Revolutionize Agriculture

Agriculture in Africa has been under the pressure of many challenges such as low productivity, lack of knowledge and exposure to new farming techniques, and lack of access to financial support, especially for the small-scale farmers. These challenges are prompting investments in newer technologies to enhance the productivity through smart agriculture techniques.

Lately, there have been an increased use of various technologies in agriculture in Africa, such as Internet of Things (IoT), Open Source Software, Cloud Computing, Artificial Intelligence, Drones/Unmanned Aerial Vehicles (UAVs), and Big Data Analytics. Many tech start-ups have developed solutions targeting various aspects of agriculture, including finance, supply chain, retailing, and even delivering information related to crops and weeds. These solutions are accessible to farmers through front-end devices such as smart phones and tablets, or even SMS.

Start-ups lead agritech development in Africa

Many agritech start-ups in Africa have come up with solutions that have led to a rise in productivity of the farms. Drones have been a breakthrough technology, helping farmers oversee their crops, and manage their farms effectively. Drones use highly focused cameras to capture picture of crops, soil or weeds. This, coupled with big data analytics and Artificial Intelligence (AI), provides insights to farmers, saving their time and effort, while also helping them find potential issues which could impact the productivity of their farms.

There are various agritech start-ups that are developing such drones, and providing them to farmers for rent or lease to analyse their crops and farms. A South African agritech start-up, Aerobotics, offers an end-to-end solution to help farmers manage their farms using drones, through early detection of any crop-related problems, and offering curative measures for the problems using an AI-based analytics platform. The company partners with drone manufacturing companies such as DJI and Micasense to deliver these solutions.

Acquahmeyer, another start-up based in Ghana, also provides drones to its farming customers to help them use a comprehensive approach to apply crop pest control and plant nutrition management for their farms.

Advent of advanced technologies such as IoT is also helping farmers to adopt smart farm management through the use of smart sensors connected in a network. This helps every farmer to get granular details of the crops, soil, farming equipment, or livestock, enabling the farmers to devise appropriate farming approaches.

Kenya-based UjuziKilimo provides solution for analyzing soil characteristics using electronic sensor placed in the ground. This helps farmers with useful real-time insights into soil conditions. The solution further utilizes big data analytics to guide the farmers, by offering insights through SMS on their connected mobile phones or tablets.

Hello Tractor, a Kenyan start-up, provides an IoT solution, through which farmers can have access to affordable tractors which are monitored virtually through a remote asset tracking device on the tractor, sharing data over the Hello Tractor Cloud. Farmers, booking agents, dealers, and tractor owners are connected via IoT. The company is also collaborating with IBM to incorporate artificial intelligence and blockchain to their solutions.

AI has also witnessed a rapid growth in adoption across agriculture sector in Africa. Agrix Tech, based in Cameroon, has developed a mobile application that requires the farmers to capture the picture of diseased crop, which is then analyzed via AI to detect crop diseases, and helps the farmers with treatment solution to save their crops.

AI is also helping Kenyan farmers with the knowledge on planting the right crops at the right time. Tech giant, Capgemini, has teamed up with a Kenyan social enterprise in Kakamega region in Western Kenya to use artificial intelligence to analyze farming data, and then send insights about right time and technique of planting crops to the farmers’ cell phones.

There are other agritech solutions that include mobile applications which use digital platforms such as cloud computing to reach out to farmers, and provide them with apt agriculture solutions. Ghana-based CowTribe offers a mobile USSD-based subscription service which enables livestock farmers to connect with veterinarians for animal vaccines and other livestock healthcare services using cloud-based logistics management system. The company focuses on managing the schedules, and delivering the right service to the livestock farmers, to help them safeguard their animals from any health-related problems.

Several agritech investments are also impacting the financial side of agriculture. Kenya-based Apollo Agriculture provides solutions related to financing, farm inputs, advice insurance and market access through the use of agronomic machine learning, remote sensing, and mobile technology using satellite data and cloud computing.

Another Nigerian start-up Farmcrowdy has developed Nigeria’s first digital agriculture platform that provides financial support to the farmers by allowing those outside the agriculture industry to sponsor individual farms.

Several other agritech start-ups across the continent, such as Ghana-based Farmerline and AgroCenta, and Nigeria-based Kitovu have also launched data-driven mobile application for farmers. These technology solutions are proving to be a boon for agriculture sector in Africa, helping improve the overall efficiency and productivity.

Agritech development is concentrated in Kenya and Nigeria

But, when it comes to first adopting the newest technologies and starting an agritech business in agriculture, Kenya and Nigeria have been leading in the adoption of new agritech solutions, accounting for a significant share of agritech start-up across Africa. Kenya has played a pioneering role in bringing agritech in Africa since 2010-2011, when the first wave of agritech start-ups began to bring new niche innovations. Currently, Kenya accounts for 25% of all the agritech start-ups in Africa, and the development is progressing rapidly, thanks to the country’s advancement in technology, high smartphone penetration, and relatively widespread internet access.

Similarly, Nigeria too has sailed the boat of success in agritech start-ups since 2015, and now it accounts for 23.2% of total agritech start-ups in Africa, with include major players such as Twiga Foods, Apollo Agriculture, Agrikore, and Tulaa. The growing inclination amongst Nigerian farmers towards using digital tools in agriculture sector has further pushed the rapid development in agritech sector in the country.

Other countries have also shown potential for agritech development, though it is still in the initial stages of becoming mainstream in their agriculture sectors. Ghana has encouraged several start-ups to launch different technology innovations for making agriculture more sustainable, while South Africa, Uganda, and Zimbabwe have also witnessed the rise in agritech start-ups over the years with newer technologies for agriculture sector.

Recent investments highlight the agritech potential

The agriculture technologies in Africa got the boost from the increased private funding. According to a report by Disrupt-Africa released in 2018, there has been a total investment of US$19 million in agritech sector since 2016. These investments have largely focused on funding agritech start-ups working on bringing innovative agriculture technologies. Also, according to the same report, the number of agritech start-ups rose by 110% from 2016 to 2018.

Some of the recent investments in the agritech sector include Kenya’s Twiga Foods, a B2B food distribution company, which raised US$30 million from investors led by Goldman Sachs in October 2019. The company aims to set-up a distribution centre in Nairobi to offer better supply chain services, while also expanding to more cities in Kenya, including Mombasa.

In December 2019, Kenya-based agritech start-up Farmshine, also raised US$25 million in funding from US-based Gray Matter’s Capital coLabs (GMC coLabs), to expand its operations in Malawi. GMC coLabs also invested US$1 million in another Kenyan B2B agritech start-up Taimba in July 2019. Taimba provides a mobile-based cashless platform connecting smallholder farmers to urban retailers. The investment was focused on strengthening Taimba’s infrastructure and increase the delivery logistics to cater to new markets.

Cellulant, a leading pan-African digital payments service provider that offers a real-time payment platform to farmers, also raised US$47.5 million from a consortium of investors in May 2018, which is the largest investment in the African tech industry till date. Cellulant also plans to channel a significant portion of funds into its Agrikore subsidiary, an agritech start-up dealing with blockchain based smart-contracting, payments, and marketplace system.

EOS Perspective

African agritech is expected to witness high growth in future. According to a CTA report on Digitalization for Agriculture (D4Ag) published in 2018, digital agriculture solutions are likely to reach 60-100 million smallholder famers, while generating annual revenues of nearly US$320- US$470 million by the end of 2020.

Adoption and use of innovative technologies such as remote sensing, diagnostics, IoT sensors for digitalization of agriculture is steadily moving from experimental stage to full-scale deployment, contributing to the data revolution in agriculture, while also unlocking new business models and opportunities.

Apart from these, blockchain is gaining prominence, and finding applications in the agriculture sector in Africa. This technology has the potential to significantly impact the agriculture sector, which we will discuss in the second part of our series on Agritech in Africa.

However, lack of affordability and knowledge to access such technologies, especially by small-scale farmers, has restricted the growth and reachability of these solutions. With the need to educate farmers and make such technology affordable and viable, it is likely that it may take at least 5-7 years before these technologies become truly mainstream in the continent.

A disparity of investments has been observed among the countries in the region. Over the years, countries such as Kenya, Nigeria, and Ghana have experienced a strong growth in terms of private investments, while other countries are left wanting. Investors have prioritized easy-to-reach markets in Africa, leaving behind the lower-income markets, resulting in agritech becoming less sustainable and scalable in these markets. However, several other African countries have shown the appetite to adopt agritech solutions, and offer significant potential.

This requires an intervention and participation from both governments and private investors, which can help improve scalability of agriculture technologies in the region. Implementation of farming digital literacy, public-private partnerships, and increased private sector investments in agritech enterprises can help the agritech industry experience a consistent and higher success rate, thus bringing the agriculture technology to a mainstream at faster pace.

Blockchain a Frontline Warrior in Battling Coronavirus Pandemic by EOS Intelligence

09/07/2020by EOS Intelligence EOS Intelligence No Comments

Blockchain: a Frontline Warrior in Battling COVID-19 Pandemic

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SARS-COV-2 has brought the world to a standstill. Technology and its creative uses have been playing a pivotal role in sustaining lives during the pandemic as well as combating the crisis. One such technology that has been at the forefront of the pandemic is blockchain. From mitigating supply chain issues with medicines and protection gear to facilitating transparency in donations to effectively tracking the spread of the virus and protecting patient privacy, blockchain technology is being applied across the spectrum to contain and manage the outbreak.

The current pandemic has brought to light many inefficiencies and limitations of the existing global healthcare systems, wherein governments across the globe are grappling to control the outbreak, challenged by the lack of a unified, interconnected, and trusted network to share data and track cases. Blockchain has several inherent properties, such as decentralized ledger, transparency, and immutability, that make it suitable for handling and managing various aspects of containing the pandemic.

Outbreak tracking

Global health authorities and governments across the globe are having a hard time gathering authentic data regarding tests and patient numbers, hospital beds, recoveries, etc. Currently, most of the data circulating is disparate and comes from multiple sources, such as hospitals, labs, the public, and media, instead of one authorized source. This is extremely damaging since it results in the creation of a great amount of inaccurate and duplicate data, which, if trusted, makes the process of tracking and containment both time-consuming and ineffective. This is counter-productive to the management of a disease that is as fast-spreading as COVID-19.

Blockchain technology can come into play in effectively tackling this issue. Owing to its distributed and immutable nature, blockchain can provide a feasible solution for tracking the outbreak. Blockchain-based apps facilitate organizations across the globe to form a single connected network where data can be shared in real time and securely. Moreover, since data stored in the blockchain is immutable, it is protected against unauthorized changes, and its distributed nature ensures protection against fraudulent data (since each entry requires consensus algorithms and smart contracts). Lastly, blockchain efficiently manages high volumes of data (as in the cases of the COVID-19 pandemic) on a real-time basis, which cannot be managed using human resources.

However, in addition to these factors, the aspect that stands out the most and makes the blockchain technology ideal for monitoring and managing outbreak-related information is the level of privacy it offers. People do not wish for their information to be shared publicly or be used for other purposes. Thus, it is a challenge to get patients to collaborate with governments and healthcare institutions to share information regarding their condition and wellness. For instance, the Israeli government recently permitted healthcare institutions to track citizens’ mobile phones to control the spread of coronavirus. This has raised concerns from human rights organizations as citizens are not comfortable with sharing their personal information.

Since blockchain uses a distributed ledger, which ensures accountability and transparency with regard to access to its stored data, the information shared through blockchain cannot be extracted or misused. Moreover, information stored in a blockchain cannot be hacked. This encourages patients to share information regarding their condition, symptoms, location, and underlying health conditions without fear of the information being misused or shared with any third party.

Furthermore, information shared by patients in a blockchain network may not only be used for tracking the outbreak but also facilitate health centers’ study of the disease characteristics and patterns to develop treatment and solutions.

For instance, WHO has been using a blockchain-based data streaming platform, called MiPasa, which facilitates the sharing of information amongst need-to-know organizations such as state authorities and health officials. The platform is built on top of Hyperledger Fabric and partners with IBM for blockchain and cloud platforms. The application cross-references siloed location data with health information to track and prevent the spread of the outbreak, all while protecting patient privacy.

In another example, an Atlanta-based developer of blockchain-enabled healthcare applications, Acoer, developed an application called HashLog, which allows real-time logging and data visualization of the spread of the infection. HashLog provides real-time updates on the spread of the disease by tracking the movement of infected people to identify potential outbreaks and prevent further spread. The application uses the Hedera Hashgraph distributed ledger technology, and each entry is recorded through a verified hash reference on the ledger, ensuring that the data is correct.

Donations

In addition to tracking and preventing outbreaks, blockchain also plays an important role in securing donations. From hospitals and state authorities with insufficient funds for medical supplies to economically weaker sections of the population losing sources of income due to lockdown, the current pandemic has displaced a huge number of people across the globe. Thus, in such times, donations play a critical role in sustaining livelihoods and providing healthcare supplies to the affected people. However, given the fraud associated with donations in recent times, lack of trust is a common factor affecting the success of donations. Several individuals want to help and donate, however, are discouraged due to fear of their money being misused.

For instance in India, the government and police warned citizens against several fake relief schemes that have been floating in the name of COVID-19 relief, some even mirroring the Prime Ministers Relief Fund. These kinds of activities deter willing people from donating.

Blockchain technology can be used to effectively combat this issue. Since all transactions in the blockchain are secure, transparent, and traceable, donors can track their funds and see where they are utilized. This gives confidence to donors that their funds are being used for the exact purpose that they intended.

One such example is Hangzhou-based blockchain startup Hyperchain, which built a blockchain-based donation tracking platform for supporting government and hospitals (such as Tangshan People’s Hospital, Jiayu People’s Hospital, and Xiantao No. 1 People’s Hospital) in the donation process. The platform has attracted more than US$2 million in donations.

Supply chain tracking

Blockchain technology has been deemed extremely useful in managing and tracing the supply chain in several sectors as retail (for more insights on this, read our article Blockchain Paving Its Way into Retail Industry). However, given the current pandemic, the technology can also utilize similar functionalities and play a significant role in tracking of medical supplies.

Given the pace of the spread of COVID-19, authorities and healthcare organizations across the globe have faced a shortage of medical supplies, such as masks, sanitizers, PPE kits, ventilators, testing equipment, as well as some medicines. This drastic increase in demand has resulted in the distribution of a large number of counterfeit and faulty products. Blockchain technology can play a significant role to combat this. Given the data provenance in blockchain and its immutable nature, it is possible to identify and trace back every touchpoint of the medical supplies to ensure its authenticity.

In addition to filtering counterfeit products, blockchain also helps streamline the supply chain process to ensure hospitals and doctors secure timely supplies to treat patients. Blockchain can provide real-time updates regarding demand so that medical manufacturers can adjust production levels accordingly. In addition, it can help fast-track supply chain contracts through the use of smart contracts and facilitate faster payments, thereby improving overall efficiency.

In February 2020, China-based AliPay, along with the Zhejiang Provincial Health Commission and the Economy and Information Technology Department, launched a blockchain-based platform to facilitate the tracking of medical supplies required for fighting SARS-COV-2. The platform has improved trust within the medical supply chain since it records and tracks the entire provenance of preventive supplies, including masks, gloves, and PPE kits.

Apart from the medical supply chain, blockchain can also help limit supply chain disruptions faced by several other industries due to lockdowns in several parts of the world. However, companies that are using blockchain for managing their supply chain have an advantage as they have better visibility into their complete supply chain and thereby can identify points of disruption in a timely manner.

Avoiding future pandemics

Blockchain is on the front line for fighting the current pandemic, but it also has the potential to prevent future disease outbreaks. Most of the current healthcare surveillance systems across the globe are outdated and lack the required timeliness and efficiency in sharing information with local as well as international health enforcement organizations. Moreover, sometimes there is a question of deliberate delay in the sharing of critical information.

To this effect, blockchain-based health surveillance systems can help mitigate future outbreaks. Since they operate on a decentralized ledger, the surveillance data is transparently available to health organizations across the globe in a real-time manner, without the fear of any political disruptions. Timely knowledge of a potential outbreak is the first and most critical step in preventing a similar situation in the future.

In addition to the above-mentioned applications, blockchain companies, along with institutions, are developing creative solutions that help reduce challenges faced by people due to COVID-19 in their day-to-day lives. For instance, Toronto-based blockchain company Emerge launched a public safety app called Civitas, which assists citizens and local authorities across Latin America. This app matches one’s official ID to confidential medical records stored in the blockchain to identify whether the person is allowed to leave the house or not. Thus, the app allows police to verify if the person has travel permission just on the basis of their government ID and without gaining access to the person’s medical records. The app also determines the safest time and day for going out for essentials for people who are experiencing COVID-like symptoms.

Moreover, as discussed in our previous article (Blockchain Scores Well in the Education Sector), blockchain is also extremely useful in the virtual education scenario, which is now the new way of schooling for a large part of students across the globe.

EOS Perspective

Blockchain technology has several inherent properties that make it ideal for helping to manage and combat the current pandemic. Its decentralized, traceable, and immutable properties make it especially desirable for managing contact tracing and outbreak tracking, which are critical in handling a pandemic efficiently. Moreover, the benefits of blockchain are further amplified when used alongside other technologies, such as artificial intelligence, cloud computing, and big data.

However, despite its several uses, the issue of scalability plagues blockchain adaption at a larger scale. Blockchain is still a nascent technology and lacks high-level scalability. With COVID-19 affecting most of the world, the current blockchain companies do not have the level of scalability to provide all-encompassing global-level solutions.

Furthermore, blockchain technology does not operate alone, and it needs to be configured with the operating legacy system of companies and other stakeholders. However, most legacy systems are relatively old and, therefore, do not support blockchain technology. Updating or reconfiguring a legacy system is a tedious process (both in terms of time and money), and companies may not want to tie up resources for that at the current time.

Given these drawbacks, blockchain may not be deployed at a global-scale level during this pandemic, however, its inherent benefits have made companies, authorities, and global health organizations ponder, explore, and evaluate its potential in managing such situations in the future. While the COVID-19 pandemic has caught the world largely unprepared, organizations and companies across the globe are gearing up to ensure this history is not repeated, and blockchain technology has emerged as a critical part of the solution.

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