This year is set to be critical for the blockchain sector, according to a new report from blockchain analysis firm R3.
While the blockchain sector did experience a slowdown from its initial burst into the investing space, a report pointed to 2020 as a crucial year for early entrants to solidify themselves in the industry.
In its Blockchain: 2020 Vision report, research company R3 said 2020 will prove to be a pivotal year for the larger blockchain industry as those companies with established positions in the sector would begin to see the results from a key set of advancements.
“The hard work on delivery in 2018 and 2019 will pay off for projects that made privacy, performance and enterprise integration central to their platform choices,” the report reads.
In fact, Mastercard inked a deal with R3 in September to develop a new blockchain-based cross-border payment platform to help connect global payment infrastructures.
Wells Fargo said it was in the process of creating a US dollar-link stable coin that will run on the firm’s blockchain platform.
The report attributed the recent slowdown of the blockchain industry to issues with the delivery of the technology, though it said that projects looking for success in late 2020 and 2021 will be able to learn from early adopters to identify the best path forward.
One path may be through partnerships between public and private firms, R3 projects. “As digital cash is mobilized by private sector initiatives, central banks will seek to align new infrastructure with existing regulations and safeguards,” the report reads.
According to the report, as more fiat-backed tokens, meaning tokens with a connection to government-issued money, are issued and traded, central banks will look to align themselves with the new era of financial infrastructure.
Further adoption of the technology may also come down to simplicity in deployment and user experience, R3 said. The report signaled operational management as a key factor for upcoming blockchain platforms in 2020.
As firms reach maturity this year, the report noted that network connectivity and network expansion will be another important part of the continued success of blockchain companies in 2020.
With increased connectivity will come heightened interoperability, R3 said, as more digital currencies come online and firms look to increase asset movement across different applications.
The researchers assert that this is the year blockchain will reveal its true value over traditional centralized databases as more central banks in countries around the world adopt digital currencies.
The report said it also expects to see demands for high quality digital assets and exchanges on which those assets can be traded, further moved by more central bank-enabled crypto currencies that are sure to develop in 2020 and into the future.
And though the financial and logistics sectors have long been the hubs of innovation in blockchain technology, R3 states that other industries are slowly adopting blockchain tech. Sectors including healthcare, pharmaceuticals and automotive have all begun to fold blockchain and ledger solutions into their operations.
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Securities Disclosure: I, Danielle Edwards, hold no direct investment interest in any company mentioned in this article.