Everywhere you look, there are more and more emerging businesses and ideas around the applications for blockchain in the supply chain. It can be difficult to discern which opportnities offer the potential to provide realizeable benefits in the foreseeable future. I’m bullish about blockchain technology but bearish about cryptocurrencies and the following paragraphs will outline my personal opinions regarding the role that blockchain and cryptocurrencies will play in the near term.
Probably the most notable venture in this space is the newly-created joint venture created by Maersk and IBM. I’m glad to see that some forwarders are committed to working withMaersk and IBM on blockchain technology.Like many of my colleagues, I’m a big believer that blockchain technology will give us the tools to solve several of the biggest pain points in supply chain today. Airlines and retail stores have already begun tests of the technology with success. Walmart recently simulated a recall under the blockchain system and were able to trace the origin of sliced mangoes in 2.2 seconds. The possibilities to gain efficiencies seem to be endless.
I look forward to seeing the breakthroughs that Maersk and IBM will develop together but I would be skeptical if cryptoassets were to be included in this project. Some cryptocurrency startups are featured heavily inthis article pubilshed by the JOC. As shipping startups start to explore cryptocurrencies and even refer to themselves as “bitcoin of shipping,” I believe these companies will ultimately have to answer some of the questions that remain unanswered in the bitcoin market: most importantly regarding regulatory and legal structure. In addition, there is a lot of uncertainty not only about how supply of the cryptocurrency will be controlled but also about the sources of demand. Despite the suggested shortfalls of using USD to alleviate some of the biggest problems in ocean freight today, shippers and carriers can be certain that their dollars will always be worth something.
A few days ago, I was speaking with a notable professional in the Finance industry who played a role in predicting the financial crisis of 2008. When asked about cryptoassets he referred to crypto trading today as “the wild west”. Even thinking about “wild west” and “supply chain” in the same sentence gives me anxiety. Given all the uncertainty surrounding cryptocurrencies, if I were a BCO, I would not entrust my supply chain to any cryptocurrency right now. I believe we’re many years away from cryptoassets contributing to alleviating challenges in the supply chain.