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2 posts from March 2021

31 March 2021

Transforming contracts and disputes with blockchain

by Guenther Dobrauz Partner and Leader PwC Legal Services, Global LegalTech Leader, PwC Switzerland

Email +41 58 792 14 97

Blockchain is going to become an infrastructure technology - like the internet. No one really cares how the internet works, but it has become integral to our daily lives. The same will be true of blockchain. We haven’t reached that tipping point yet because there are no dominant players: we have Google for the internet, but there’s no Google for blockchain. At some point soon, this will change.

In the meantime, blockchain is causing major disruption to some really complex systems in the area of contracts, agreements and disputes. So much so, that PwC economists expect blockchain to generate as much as US $73 billion over the next decade in this arena.

In a new report, Time for Trust: The trillion dollar reason to rethink blockchain, PwC has assessed how blockchain technology is currently being used across every industry. The report argues that the technology is on track to deliver a US $1.76 trillion boost to the global economy by 2030, and that the majority of businesses will be using blockchain technology from 2025.

The beauty of using blockchain technology for contracts is that it can bring together ledgers, agreements and payments improving the flow of commercial agreements, and it can capture, and potentially manage, any disputes. The types of terms and conditions usually seen in a legal contract can be added to blockchain payments. These are known as Smart Contracts and they can synchronise the release of payments with the delivery of goods, services, or even financial instruments

“Smart Contracts are a one stop shop for business because they encompass everything you need: binding legal obligations, evidence immutably committed to the blockchain ledger, and a process for execution of payments. The blockchain records all of your activity, there’s no middleman. The use of smart contracts on the blockchain has the fantastic ability to act quickly and record transactions.” Dean Armstrong QC, CEO of The Proof of Trust and author of ‘Blockchain and  Cryptocurrency: International Legal and Regulatory Challenges’

The biggest advantages of Smart Contracts is in the signing and filing: the contracts don’t need to be signed in person, and the technology automatically creates an immutable audit trail. This saves time, lowers costs and removes friction to improve the flow of any commercial agreement, within and across borders. As an early adopter of this technology, PwC is now the world’s leading provider of Smart Contract assurance.

There are a number of these types of solutions in use. For example, the tech group IBM and the shipping company Maersk have developed a blockchain-based platform to exchange digital documents, replacing paper documents to ensure instant instant secure access and trusted workflows.

By their very nature smart contracts are legally binding, but they don’t have jurisdiction clauses. This has opened up opportunities for dispute resolution systems. In the UK, companies, such as The Proof of Trust, run adjudication software systems. It can be written into the terms and conditions of a Smart Contract that any dispute will be resolved by a panel of independent adjudicators - brought together by companies such as Proof of Trust - rather than a specific jurisdiction.

For governments or large multinational companies this could save time and money on cross-border disputes. If a dispute occurs, blockchain can help by logging it, automatically blocking payments and triggering alerts that automate the dispute processes. And with its tracking abilities, blockchain technology can help quickly unwind disputes and exposures in a trusted way.

Read Time for Trust to find out more about how blockchain is being used right now, and which industries and countries are set to reap the biggest rewards from the technology. Explore our research and read the insights from our global industry experts.

To find out more about how Smart Contract solutions can create value for your organisation, get in touch.

Related links

by Guenther Dobrauz Partner and Leader PwC Legal Services, Global LegalTech Leader, PwC Switzerland

Email +41 58 792 14 97

01 March 2021

Education sector set for blockchain boost

by Caitroina McCusker Education Leader, PwC United Kingdom

Email +44 (0)7764 331623

As schools across the UK reopen, the challenges facing the education sector are still unfolding. From plans to cancel GCSE and A Level exams, to extending the UCAS application process by two weeks - plans are still changing and a number of uncertainties remain. Yet despite this, the sector knows it needs to press ahead with digital and technology investment.

I’ve had a number of conversations over the last few months with universities and other organisations, and it’s clear that one of the most pressing concerns is: how do we transform and how do we do that quickly, sustainably and impactfully? As they grapple with the impact of the COVID-19 pandemic, it is clear they want to act as quickly as possible. But many are aware they have a long way to go - especially when it comes to issuing, verifying and sharing qualifications and professional credentials online. 

As the sector rethinks how it operates, it’s worth highlighting an interesting new PwC technology report. Our economists expect the education sector - along with the health and public administration sectors - to benefit more than any other sector from blockchain technology. This may come as a surprise to those who associate blockchain with cryptocurrencies such as Bitcoin. But blockchain is expected to boost the education, health and public administration sectors across the globe by US$574 billion by 2030. It’s one of the key findings in PwC’s new report, Time for Trust: The trillion dollar reason to rethink blockchain, which outlines the impact blockchain will have on the global economy over the next decade.

How blockchain can help

The report explains how blockchain technology can be used to generate and store sensitive personal records online or on mobile apps - such as birth certificates, driving licences or professional qualifications - for instant proof of identification. Universities can create degree certificates that can be shared by graduates with prospective employers at the touch of a button. They can be instantly verified, with no need to run a credentials check with a third party. It frees us all from the time-consuming, inefficient, paper-based credentials system, saving time and money, improving efficiencies and helping to eliminate fraud.

These systems are already in use. Here at PwC, we have partnered with, among others, the Institute of Chartered Accountants and a major European university to develop our Smart Credentials blockchain platform. It shares the credentials of chartered accountants and technology graduates in a ‘digital wallet’, saving a huge amount of time and money in the verification process, while combating fraud. Students can also add any number of documents to it, from their birth certificates to a sporting qualification, which they can control and share. Going forward, we plan to scale our experience of Smart Credentials in a deeper transformational context, working with aligned service providers covering technology and resourcing, to build what is effectively an internet of credentials. 

People want to be able to access and share their identity documents and professional qualifications anywhere, anytime. And organisations want to know they can trust what they see online. Blockchain has the power to transform the education sector in this arena.

To find out more about how blockchain is being used right now, read Time for Trust - explore PwC’s research and read the insights from our global industry experts.

To find out more about how blockchain can create value for your organisation, get in touch.

Related links

by Caitroina McCusker Education Leader, PwC United Kingdom

Email +44 (0)7764 331623