New GST Rules for Digital Payment Tokens

Blockchain & COVID-19: An Ongoing Conversation

Zann Kwan - Director, Digital Advisory
New GST Rules for Digital Payment Tokens

New Dawn

The aftermath of COVID-19 will be a new dawn.

The conversations for organisations in the last few years were about disruption, reinvention, blockchain adoption, artificial intelligence and digital transformation. Fast forward to this current point in 2020, disruption seems to be more of a luxury now as the focus is switched to survival.

How long would this COVID-19 crisis last? It is hard to piece together reliable information to predict when it will end. Going by the current trajectory, a global depression could be a possibility.

Alarm Bell

One thing is for sure: The needle has moved. Many businesses that took the time to look into reinventing themselves, are also caught off-guard by COVID-19. The question turns from “How can we do better?” to “How long can we last?”

Some businesses are experiencing bottlenecks in their operations while implementing work-from-home arrangements and executing business continuity plans. Many organisations wonder if earlier adoption of technological solutions would have avoided some of these issues.

Many organisations resonated with the idea of digital transformation, innovative disruption and blockchain adoption. However, most organisations and businesses are not moving fast enough to change and to create enough impact to survive in the new digital age.

Many organisations took the luxury of time in the past few years to learn about new technologies, contemplate and review them to see if there is a fit to their organizations. We are losing the luxury of time now.

The Holy Grail of Blockchain: Decentralisation

COVID-19 has exacerbated the weaknesses and fiscal stress points of many sovereign countries. Whatever issues some countries were struggling with before COVID-19, the global pandemic has surfaced them further to the top.

In that same way, this pandemic will be revealing the strategical and operational weaknesses of many organisations.

In these uncertain times, some organisational strengths may become weaknesses. In the past decades, the chasing of economies-of-scales have resulted in centralised business models and processes. Many companies have started to question centralisation. Putting it in simple terms, centralisations attract a single point of attack and hence, one point of failure. The examples are centralised databases and processing centres.

What are the examples of decentralised business models? It could be the distribution and delegation of management, processes and even ownership and customer base. An example would be a decentralized ride sharing platform, whereby the platform shares its revenue with its various stakeholders (developers, customers, referrals and drivers, etc.) through predetermined smart contracts.

Another example would be a decentralised peer-to-peer platform which enables buyers and sellers to transact with each other through automatic swaps. That is, parties seek each other and transact directly without a need for a middleman, escrow agent or a centralised exchange.

As the onboarding cost of individual customers decreases with blockchain based solutions and other decentralised supportive solutions like IOT (Internet of things), decentralised business processes and models became the attractive way to go for most organisations. Perhaps, these distributed solutions could provide the lifeline, post-COVID-19.

The more centralised an organisation is, the lower its immunity to disruption and thus, the closer it gets to being made redundant. Take this time to build a stronger organisation.

Implementing Blockchain

Several business leaders have asked us how they could implement blockchain solutions and decentralized models in their businesses. We will have the following conversation with them:

1. Is Blockchain the answer?

We believe the right approach is to start with “knowing your business”. What does your business actually do? Is it playing the role of a middleman? What value does it deliver? What problems are being solved? Who are being served by your business? Who can do it better? Who are your competitors?

If organisations do not give some time and effort to know their business, any digital transformation might just be putting a fresh coat of paint on a mouldy house.

Blockchain, in the past few years, has been touted to be the solve-all-corporate-inefficiencies or the change-the-world catalyst.

However, we should not ignore the fact that many of these blockchain-led solutions could be implemented with existing non-blockchain technologies that are more efficient and cost less at the same time. For example, for the storage of non-evolving and non-critical data, a simple database would suffice, rather than a blockchain-based solution like a private blockchain.

But in some situations, it can be a game-changer. Let’s take an example of an insurance contract that is written onto a smart contract. The process of premium collection, monitoring of qualifying events to eventual benefits payout, would be vastly different from the current model, with significant reduction in processing time and customer onboarding cost.

Blockchain may not be the solve-all-corporation-issues antidote. However, its transformational ability and its perpetrated idea of decentralisation from deploying blockchain-based solutions, cannot be underestimated.

2. Is your business ready?  

When a decentralised solution is used by a centralised organisation, the benefits reaped might be temporary or minimal.

For example, some conglomerates have been planning to issue their own cryptocurrency on their private blockchain for customer rewards or for the offsetting of inter-company ledgers. Unless these organisations go all out to embrace decentralised business strategies, these initiatives could easily be replaced by a centralised digital ledger. Frankly, they do little in enhancing an organisation’s competitive advantage.

Many failures in blockchain start-ups are not due to the decentralised products that they are building but because of the centralized nature of their business processes.

3. Do you know your competitors? 

Transportation platforms are venturing into digital banks. Venture capital companies are moving into data mining and management. Online e-commerce platforms are moving into payments and digital wallets. Organisations may not know who their competitors are. As businesses transform themselves, their competitors may not be companies but connected ecosystems and platforms. 

These competitive forces become stronger when businesses increase their agility from the lowered cost of entries with the adoption of digital solutions and blockchain-based infrastructure. 

Therefore, get connected with ecosystems that could help you get there. Some companies have explored utilising blockchain in their logistics or inventory management. However, a silo effort without considering how different business functions come together, will bring limited transformation. For example, additional accounting processes may need to be created to “deal with" the new inventory management activity. Before long, resistance to change will slow down the drive to innovate. 

Rather than putting an iPad on a typewriter for transformation, be part of an ecosystem that takes care of the interoperability of different blockchains and the integration of both on and off-chain activities. This will impact how customers are onboarded, how values are created, how services are delivered, how suppliers are connected and how competitors come together to increase the size of the pie by creating a collaborative ecosystem.

This slowing down of global markets might be a good time for organisations to form partnerships, platforms and collaborations to thrive post COVID-19. We cannot overemphasise the importance of plugging in to a platform for collaborations.


COVID-19 has brought to light many organisational weaknesses and obsolete business flows. It might be the time for many to rethink their organisational DNA, redesign their business models and reconnect their relationships with their suppliers, customers and the ecosystems that they are currently serving. The current slowdown provides a potential reset button for many organisations.

Decentralised blockchain-based products might be a solution for many organisational transformations. We work with industry experts, thought leaders and curated platforms to bring your organisation to the next level.

If you are overwhelmed by the amount of information around blockchain adoption, we could help to demystify the blockchain technology and break it down to executable steps for your organisation.

Talk to us and see how we can be a great partner during this challenging time.