Caribbean Export OUTLOOK 3rd Edition

101

Clearing The Hurdles

computing are transforming the financial world, and this is set to have a positive impact on the over sixty percent (60%) of Latin American and Caribbean adults who do not have a formal account at a financial institution. By reducing costs for all participants in the economy, DLT supports new peer-to-peer models of mass collaboration that could make many of our existing organizational forms redundant. For example, new business ventures seeking to access growth capital would traditionally target angel investors and/or venture capitalists before eventually pursuing an initial public offering (IPO) on a Stock Exchange. This model supports several intermediaries such as investment bankers, auditors, lawyers, exchange operators and so on, each of whom must be paid. Blockchain Technology disrupts this model by enabling companies of any size to raise capital in a peer-to-peer fashion through global Initial Coin Offerings (ICOs). Already this approach for raising capital has surpassed early stage Venture Capital funding with US$4 billion raised via ICOs in 2017 and is already a legitimate alternative to equity financing. Moreover, the World Economic Forum predicts that by the year 2027, 10% of global GDP will be stored on blockchains. Against this factual matrix, the Caribbean is presented with a wealth of opportunities courtesy of the rise in Blockchain Technology. The Small Island Developing States (SIDS) of the Caribbean are demonstrably constrained by the limited size of their economies and finite natural resources. However, technology is a great enabler for growth and development, allowing individuals and industries to compete regionally and globally despite size or capacity constraints. Indeed, any thoughtful examination of the major economic sectors in the Caribbean, would illustrate numerous cases for use of Blockchain Technology that could have a significant impact even beyond digital currencies for peer-to-peer or cross-border payments. Supply Chain Trade is critical to the survival of economies in the Caribbean and multiple trading blocs - including the Caribbean Community (CARICOM) through its Single Market and Economy (CSME) and the Organization of Eastern Caribbean States (OECS) - have been established to remove trade barriers among States. Additionally, many islands have established preferential trade agreements with other States, such as Canada and the European Union. Blockchain Technology presents a tremendous opportunity to streamline trade processes, reduce costs and provide increased integrity and anti-counterfeiting assurances previously unavailable. Many everyday products have supply chains that span tens and sometimes hundreds of stages with multiple individuals and entities involved over different international locations which increases Opportunities for Blockchain technology in the Caribbean

the complexity and can protract product delivery. The Blockchain provides a single source of information for supply chain visibility with each network participant across a broad global supply base, providing significant efficiencies and improved security previously unavailable with traditional IT solutions. By offering a shared ledger that is updated in real time, Blockchain enables equal visibility of activities for all network participants, which can reduce delays traditionally caused by paperwork and improve consumer and partner trust by revealing where an asset is at any point in time, who owns it and its up to date condition. In the food industry, Walmart uses blockchain to track the source of various food items from China where the blockchain records the source of each item, where it was processed, stored and its sell-by-date. This undoubtedly improves inventory management and helps to identify the source of issues faster. Financing in Farming & Agriculture Around four percent (4%) of the 570 million farms worldwide are in the Caribbean and Latin America. Agriculture plays an important role to regional economies as a major economic sector, supplying food which can reduce poverty and hunger. Furthermore, agriculture provides significant employment opportunities in the Caribbean where unemployment continues to be a major challenge for governments throughout the region. Blockchain Technology can address the issue of financing where many of the farms in the region are small, family owned and operated businesses that struggle with little or no access to financing via existing banking services. Innovative technologies like Sentinel Chain are leveraging Blockchain Technology to provide a solution to this problem by providing the infrastructure for farmers to utilize livestock as collateral while facilitating attestations of ownership by livestock insurance companies. Roy Lai, CEO, Sentinel Chain summarizes this technology as “creating proof-of- ownership for unbanked livestock assets that can facilitate access to secured loan capital.” In short, this may mean greater financial inclusion and increased economic activity for the region, potentially alleviating proverty and inequality while providing insurance against shocks including natural disasters and loss of Correspondent Banking Relations (CBR). Private Data Assets Ease of movement of data is one of the problems that the internet has solved for over 30 years. BlockchainTechnology advances this concept by providing a framework that will empower individuals in the Caribbean to take control of their personal data, making retrieval more secure and providing permissioned access to third parties when, and for how long they decide. Electronic medical records, digital identities and Know-Your-Customer (KYC) data on the blockchain are use cases for which applications already