Blockchain technology for development financing

The Project at A Glance

Blockchain is defined as “a shared, immutable ledger that facilitates the process of recording transactions and tracking assets in a business network” (IBM, n.d.). Blockchain can be a gamechanger for trade as it promotes efficiency and accuracy in the transfer of knowledge and can be used to track orders, payments, production and so forth.
International Economics Consulting Ltd. (IEC) provided technical assistance to the GIZ in developing a foresight study on the implications of blockchain on sustainable development and sustainable finance from a macro-perspective. The objective of this foresight study was to assess how blockchain technology can advance sustainable finance in Germany’s development cooperation with partner countries. IEC prepared a foresight study on the existing Distributed Ledger Technology (DLT) applications, their potential impact on financing sustainable development, and the pre-conditions for advancing such development in partner countries.

What We Found

With regard to financial sustainability, it is found that blockchain technology can provide access to new financing models that may help developing countries mitigate existing investments. Thus, blockchain technology can be leveraged to promote sustainable development as well as achieve the UN Sustainable Development Goals. Thus, blockchain can revolutionise access to capital and finance. By democratising the funding process, blockchain can promote further investment in green infrastructure and other projects that address environmental and developmental challenges. Moreover, the advances currently being observed in technology, such as artificial intelligence, the internet of things, virtual reality, augmented reality, additive manufacturing and 5G can all be mutually reinforcing. Combined with blockchain technology, these can facilitate the monitoring and management of diverse recourses including financial assets, data, energy, or water, among others. These emerging technologies can therefore be leveraged to accelerate progress on multiple fronts regarding sustainable development and finance.

Our Strategy and Impact

IEC prepared a thorough research methodology and conducted structured interviews with relevant stakeholders in the blockchain community, including policymakers and regulators working on national financial, economics, and environmental development, academia, and think tanks. Subsequently, IEC prepared a foresight study on the existing influential DLT applications, their potential impact on financing sustainable development, and the pre-conditions for such development in partner countries; and made recommendations for the international development cooperation community on how to support developing and emerging countries in taking advantage of blockchain trends, especially in the area of financial and economic growth. IEC presented future scenarios with a high degree of blockchain adoption and described the technical and regulatory conditions necessary for the uptake of blockchain technology as well as the intended impacts on financial and sustainable development. Recommendations were formulated on how Germany can shape its development cooperation policies and instruments in accordance with future scenarios to support partner countries in developing their blockchain strategy.

Our Core Solutions

At International Economics Consulting, our team helps clients in identifying the strengths of online trading platforms, gaps and strengths in the legal framework, payment systems, infrastructure, packaging and standards gaps, logistics and trade facilitation framework to take advantage of online tools for sales. We offer a full diagnostic of the e-commerce sector, mapping out the enterprises’ strengths and the institutional ecosystem enabling it. We work alongside different organisations and the private sector to empower them to leverage the opportunities presented by the digital revolution.

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