Inadequate understanding of blockchain applications is the greatest barrier to adoption of the technology in the Asia-Pacific region, according to the majority of respondents to a recent poll by consulting firm Ernst & Young.
Why it matters: Despite banning cryptocurrency activities, China wants to be a front-runner in blockchain development. Businesses in China are encouraged to develop and apply blockchain solutions which fall within regulatory compliance. However, the survey results signal potential for a gap between policy goals and widespread industry adoption.
- Chinese tech giants including Baidu, Alibaba, Tencent, and JD have been experimenting and applying blockchain solutions to areas such as electronic invoicing, gaming, medical prescriptions, financial services, and logistics.
“Trust is a key factor and current barrier for companies in Asia-Pacific. Understanding and education is required to build trust and confidence with aspects of a business.”
—Adam Gerrard, partner at Ernst & Young and EY Asia-Pacific Assurance Blockchain Leader
Details: The poll was conducted by Ernst & Young during a live blockchain webcast on June 19 attended by 576 individuals in the Asia-Pacific region. The majority of participants were middle- to senior-level professionals working in industries including technology, accounting, financial services, and manufacturing.
- Lack of understanding and education on blockchain applications pose the greatest risk and challenge for boards and executives, according to 68% of the participants.
- Of total participants, 66% said they need a better understanding of possibilities, risks, and benefits before considering applying blockchain solutions to their organizations.
- The most common misconception about blockchain is that it is a trustless system without a central authority, according to survey respondents. Private blockchain solutions which cater to the needs of enterprises, for example, require permission to join and usually have a central authority controlling its code and protocols.
Context: Blockchain is recognized as a technology that can transform industries and improve transparency, security, and efficiency, and China has been one of the most active players in blockchain development.
- Advanced economies like Singapore and Hong Kong have emerged as Asia’s blockchain hubs.
- Data from November show that China led in the number of blockchain projects in progress, which accounted for about 25% of such projects globally, according to state-owned media China Daily.
- A recent report by LinkedIn shows blockchain is listed as one of the fastest-growing skills in Asia-Pacific markets including China, Singapore, Japan, Taiwan, South Korea, Hong Kong, and Vietnam.