The year 2016 was the year of blockchain prototypes, or proofs of concept. From innovation labs to big banks to consortiums, we witnessed a number of research efforts in understanding blockchain. According to CoinDesk, one of the earliest online blogs to track the development of blockchain, investments in blockchain technology in 2015 totaled $600 million, and they rose more than 50% to over $1 billion in 2016.

Will 2017 be the year when we get real about blockchain? Will we be seeing commercial applications other than Bitcoin? Well, it definitely seems so, if early indications continue and expand as the year progresses.

In January, as a step toward turning blockchain from hype into reality, the Depository Trust and Clearing Corporation (DTCC), the central bookkeeper for Wall Street’s securities trades, announced it had selected IBM and two blockchain startups, Axoni and R3, to develop distributed ledger software for its post-trade processing. To be developed this year and launched in early 2018, the solution has already had input from banks such as Barclays, Citi, Credit Suisse, Deutsche Bank, JP Morgan, UBS, and Wells Fargo, as well as other infrastructure providers including IHS Markit and Intercontinental Exchange.

In February, Northern Trust Corporation deployed a new blockchain-based system built with IBM to record information on transactions involving private equity funds. The program is currently being used to manage the administration of a private equity fund run by Switzerland-based asset manager Unigestion. This new blockchain system will record documents and information connected to transactions involving the fund, such as investments by limited partners, a process that is currently highly manual. In addition to providing a central record for fund managers, investors, and administrators, the program allows regulators to access the information when required.

It’s a worldwide phenomenon, and emerging economies like India have adopted blockchain-based solutions. Bajaj Electricals, one of the leading manufacturers in India, has worked with one of the premier banks in India, Yes Bank, to implement a blockchain-based solution. Previously, getting paid for the materials they supplied to Bajaj Electricals was a cumbersome process for Bajaj’s vendors. It involved several steps including confirming delivery to Bajaj, raising a physical bill of exchange, and submitting invoice and transport documents to Yes Bank for payment. Since Bajaj implemented the blockchain-based solution, the process cycle for paying its suppliers has decreased from four or five days to almost real time.

Exciting times! We at Wipfli are ready to move forward with you from the proof-of-concept stage to commercialization. Our functional and technology experts have worked on a prototype to not only learn the technology and impact, but also potentially commercialize the solution in partnership with our clients. If you would like to learn about blockchain and how it may affect you, I invite you to contact your Wipfli relationship executive or send an email to gmramachandra@wipfli.com.