Blockchain can be used to combat corruption in contract bidding processes. That’s one of many uses that are taking the technology beyond its general association with cryptocurrencies.

Sheila Warren, of the World Economic Forum, spoke about the technology and its potential to solve “real-world” problems at the Bermuda Virtual Tech Summit 2020.

An experiment was carried out by the WEF in Colombia, where it backed a system that looked to reduce corruption in the public procurement process.

Ms Warren said: “The system made sure that bids for opportunities from various corporations were all tracked – that the information was transparent.

“It created this record that was immutable, that is permanent. The information is held securely and over time you were able to see all the groups that came in and bid.”

Because the information was held on a blockchain it could not be not be lost or moved into a particular order, and the timestamp on events could not be shifted,“ Ms Warren said.

"None of that could happen. You had an accurate record of who came in, and when and how, and who they met with; all this stuff was seen,“ she added.

“The idea was not that you were eliminating the corruption, but you were basically able to flag it. Then over time you could create algorithms that could spot irregularities.

“You couldn't go in and alter the record, that was impossible. So that was deemed very important to preserving the integrity of the process.

“That's an example of how the transparency component can actually lead to more accountability if the ledger is used appropriately, and there are policies around the ledger that the right information is held by the right people.”

Ms Warren is head of blockchain and data policy at the WEF, which she said has been very bullish on blockchain technology.

"We're very focused on digital currencies, central bank digital currencies [CBDCs], stablecoins, cryptocurrencies, and what those opportunities might present in terms of financial inclusion and more equitable access to the world financial system,“ she said.

The WEF has launched a central bank policymaker toolkit, focused on central bank digital currencies, which has had “a tremendous amount of interest”.

Ms Warren said: “Which to us, indicates just how far and wide the investigation of CBDCs is actually happening. Major players have really spent some time on the notion of central bank digital currencies.”

Denis Pitcher, chief fintech adviser to the Premier, asked her what was the motivation for digital currency and blockchain rather than traditional technologies

He said: “You can already sent money digitally with bank transfers, how is this different?”

Ms Warren said: “The experience really would not be that different. It won't look different, and it may not feel different. What will be different is the back end, and not just the infrastructure, but also some the ways the currency moves from place to place.”

She said there is an elimination of some of the intermediary steps.

“Transferring money between two people on an app happens easily, there is trust. But there can be a fee attached to that, which can add up quickly, and in some places in the world you really can't place that trust [in the financial system].

“Blockchain allows the elimination of all that ’middle stuff,' and we can move to directly exchanging that value, without the record-keeping functions that other institutions have playing invisibly in the background.”

She said blockchain might not be needed in every system.

Ms Warren was excited by the type of things smaller places, such as Bermuda, Cambodia, and a few others were doing as they explored and experimented with blockchain and digital assets.

"Smaller economies are better able to ensure adoption than huge places. You get an opportunity to see what the adoption curve looks like, and what interests people,“ she said.

“Some place will crack the nut on being regulatory-friendly, proving enough stopgap and security around digital currencies specifically. And it is not going to be one the giant, major economies because they are being a lot more cautious.”

She added: “It's about laying the groundwork for doing it in a safe manner that the world can rely on.”

The three-day Bermuda Virtual Tech Summit 2020, which started on Wednesday, continues today.