Blockchain Powered Financial Inclusion (Quest Ventures)

Summary

• Over US$ 1.4 billion has been invested in blockchain over the past 3 years, and 24+ countries are currently investing in DLT.p.2
• 90+ central banks are engaged in DLT discussions worldwide and 90+ corporations have joined blockchain consortia.p.2
• Banks are estimated to generate $380 Bn in revenue from the unbanked population in emerging markets.p.4
• Santander says blockchain could reduce banks' infrastructure costs for cross-border payments, securities trading and regulatory compliance by $15-20 Bn per annum.p.4
• Mobile penetration even in low-income countries is over 50%, opening access routes for mobile banking and payments.p.4
• Risks include integration concerns, the nascent stage of the technology, cyber security and privacy, cultural adoption and uncertain regulatory status.p.7

Key insights

1. 2,500+ patents were filed over the last 3 years in blockchain.p.2
2. Significant hurdles remain to large-scale DLT implementation, including nascent standardization efforts and an unharmonized regulatory environment.p.2
3. Closing the small business credit gap is estimated at $270 Bn of the opportunity.p.4
4. Blockchain-based economic identity and remittance services, such as BanQu, Ripple and Stellar with Oradian, are used to foster financial inclusion.p.5
5. Blockchain can cut operational costs and eliminate the need for clearing houses by storing transactions in a shared, tamper-proof database.p.6
6. Use cases for DLT in financial services include global payments, P&C claims processing, syndicated loans and trade finance.p.8
7. Further use cases include automated compliance, proxy voting, asset rehypothecation and equity post-trade.p.9