Following the meteoric surge of cryptocurrencies such as bitcoin, many businesses have shown heightened interest in the blockchain technology behind those virtual currencies and have sought to harness its potentials.
The growing interest in the technology has not diminished even after bitcoin and other cryptocurrencies have fallen sharply from historical highs since earlier this year.
VeChain, a startup focusing on supply chain management, has been deploying blockchain technology to record the detailed history of products in order to provide a quick and easy way for consumers and relevant parties to verify their authenticity. Earlier this May, one of the Big Four accounting firms, PricewaterhouseCoopers (PwC), announced its acquisition of a small stake in VeChain.
PwC is committed to helping promote VeChain’s business to its global customer base, the startup’s chief marketing officer Noah Huo told EJ Insight in an interview.
As a decentralized shared database, blockchain stands as an irrefutable record that cannot be tampered with.
VeChain offers product traceability and anti-counterfeiting solutions that use blockchain technology along with Internet of Things (IoT) to cover all aspects of the product’s life-cycle from manufacturing, logistics and supply chain, wholesale and retail to after-sales service and even consumer engagement.
Huo said VeChain’s solutions are already deployed in such products as automobiles, pharmaceuticals, liquors, luxury goods, and many more. The startup has worked with various business partners such as China Unicom, DNV GL, DB Schenker, Renault and BMW.
In August 2017, VeChain launched its digital token, VEN, as a default payment token in its blockchain network. As of July 16, the token was trading at US$1.74 with a total market value of over US$963 million, ranking 19th among all cryptocurrencies worldwide.
“New technologies such as artificial intelligence (AI) and blockchain will have a certain degree of impact on PwC’s existing businesses. It needs technology providers to help it accomplish its digital transformation,” Huo said.
The startup is now discussing with PwC how to provide trust-based services on the VeChain platform, which will require the use of VEN to access and perform transactions on the platform.
“For [PwC’s] customers, even if they want to use VeChain’s service, they may not be willing, or appropriate, to start holding VeChain’s crypto tokens,” Huo said.
In view of this, by possessing VeChain tokens, PwC can now integrate VeChain’s service into its assurance or advisory services and provide a new solution to its customers.
Meanwhile, China has cracked down on virtual currencies, shutting down cryptocurrency exchanges while banning crypto mining and initial coin offerings.
Huo said that after the nationwide crackdown, Chinese companies have adopted a “wait-and-see” attitude as regards blockchain technology projects.
But he said that despite the crackdown, blockchain projects that can be applied to the real economy have received support from the government.
He also expects the regulatory atmosphere to start easing in the second half of this year.
One of the most welcome developments in China as far as the blockchain sector is concerned is President Xi Jinping’s call on the country to take the lead in developing new technologies such as artificial intelligence and blockchain technology in a speech in late May.
Many regard his speech as the government’s endorsement of technology development in the country.
In fact, after Xi’s speech, VeChain has seen a surge of invitation for partnership from mainland companies, particularly state-owned corporations.
Huo said his firm has signed an agreement with a “leading domestic brand of electric vehicles” in mid-June and he expects more large corporations in the country to join VeChain’s platform soon.
In the interview, Huo explained how VeChain’s blockchain solutions can be applied in the automobile sector. The massive data about the vehicle, such as the car owner’s driving behavior and maintenance record, is transmitted to VeChain’s blockchain platform through the driving computer, creating a “blockchain-powered digital maintenance ledger”.
With more insurance companies joining VeChain’s platform, “the vehicle owner should gain the value from authorizing their comprehensive data to an insurer by paying less for the insurance package”, Huo said.
Cryptocurrencies have seen a slump in 2018, with bitcoin, the leading cryptocurrency, falling below US$6,000 last month, losing about 70 percent of its value since its record high of US$20,000 last year. Many believe that this signals the bursting of the cryptocurrency bubble.
Huo admitted that bitcoin has become an investment bubble, but “its price has, in fact, experienced many ups and downs in the past few years, and there is no big impact on blockchain technology developers”.
He believes that the volatility of cryptocurrency prices is going to continue for some time, while “the big investors are still sitting on the fence”.
Asked about the outlook of China’s cryptocurrency market, Huo said it is still in an early stage and the government is expected to maintain a strict regulatory approach.
He believes the authorities will establish a licensing system for cryptocurrency exchanges in China, “just like the Japanese government’s approach”.
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