COVID-19: Communication Providers Step Up to Utilize Blockchain for New Use Cases, Including Helping People Impacted by the Outbreak

K. Weldon
K. Weldon

Summary Bullets:

  • Blockchain use cases are evolving, including new systems devised by service providers to help during the COVID-19 pandemic. Alibaba’s use of blockchain for more efficiently distributing financial payments to affected parties is a good example.
  • The industry has also seen an uptick in other telecom providers’ involvement in the blockchain market, resulting in a number of deployments aimed at improving business processes and enhancing service offerings.

Blockchain holds promise as an enabler for service providers for a wide range of internal and external (customer-facing) use cases, ranging from IoT and mobile device security to payments, supply chain management, asset tracking, and logistics. Retail, manufacturing, and healthcare companies have been identified as the most likely industries to take advantage of these capabilities, but there are many companies that can benefit from the secure trusted ledgers enabled by blockchain. At the same time, during the world’s COVID-19 pandemic, early blockchain use cases are appearing as parts of efforts to help combat the crisis, including Alibaba’s use of blockchain for more efficiently distributing financial payments to affected parties.

Blockchain to Help with the COVID-19 Pandemic

Ant Financial, the owner of Alipay and an affiliate of China’s Alibaba, announced that it would use its blockchain-based mutual aid platform, Xiang Hu Bao, to distribute financial payments to members affected by the coronavirus. The coronavirus is now included on the platform as a critical illness that qualifies for a one-time payment of RMB 100,000 (USD 14,320). Claim applicants can use the Xiang Hu Bao app to submit supporting documents, while investigation firms can get immediate access to them on the blockchain. Prior to the recent addition of coronavirus to the list of illnesses for which payment claims can be made, the platform provided health payouts for 100 critical illnesses. It was therefore already established as a mutual aid platform within China’s healthcare system. Blockchain technology ensures transparency and the possibility of establishing immutable records within various industries, including healthcare and charitable donations. For healthcare payment platforms like Xiang Hu Bao, this not only helps to establish trust, but also appears to have facilitated faster settlement and payment. Over the longer term, there are opportunities for Ant Financial to build on the achievements of Xiang Hu Bao and extend the use of blockchain to other areas of China’s healthcare industry, including record management and medical research and development.

Other New Blockchain Initiatives by Communication Service Providers

  • Vodafone has joined IBM’s newest blockchain initiative called ‘Trust Your Suppliers,’ a digital identity platform first introduced last summer alongside partner Chainyard. The project’s aim is to ease the procurement function by eliminating manual processes involved in the supplier validation and qualification process. Like other telcos, Vodafone is exploring blockchain as a way to improve its supply chain, including ways to streamline and automate the verification process necessary to identify new suppliers by integrating the technology with internal processes. The program provides a way to ensure suppliers pass background checks while verifying banking accounts, bringing reassurance to participants. The program appeals to service providers’ operations teams looking to replace manual requirements around process management with newer solutions which include automation platforms. This technology innovation will help spur blockchain adoption. Additional backing by founding members, including Cisco, Anheuser-Busch InBev, Nokia, GlaxoSmithKline, Schneider Electric, and Lenovo, will further strengthen the program.
  • Deutsche Telekom’s T-Systems subsidiary announced the launch of the German Blockchain Ecosystem (GBE), a marketplace for blockchain services. T-Systems is working with other group subsidiaries T-Labs, T-Systems Multimedia Solutions, and Detecon to develop the GBE. It plans to offer the service to corporate customers in 2020. With GBE, small and medium-sized businesses can also launch their own applications on a blockchain system managed by T-Systems. The first product in the marketplace will be the Validator-as-a-Service solution, which allows cross-company processes to be reliably and securely checked and processed via a blockchain infrastructure. Deutsche Telekom provided an example of how the GBE might enhance supply chain operations for customers, which could use blockchain applications to track goods from raw material to delivery and streamline production, services, trade, and payments. DT points out that the key point is the solutions for these different processes along the blockchain will now be available in one place. The approach is unique, as T-Systems’ CEO is appealing to companies to step forward with their own blockchain plans and ideas, suggesting a collaborative approach that can enhance value for the wider ecosystem of suppliers and their customers.
  • The U.S. patent and trademark office has granted Verizon a patent covering the use of a blockchain for securely provisioning, assigning, and managing virtual SIM cards. A network device initiates creation of a blockchain, including a vSIM certificate for network services which includes an international mobile subscriber identity (IMSI) number. Nodes that participate in the ‘distributed consensus network’ will maintain a list of records, i.e., a vSIM blockchain. Time-stamped transactions will be stored in cryptographically secured blocks, to secure the records from tampering. The vSIM can then be used securely by different devices associated with the user account, transferred between devices associated with the same user account, or temporarily assigned to other users. The main advantage of using a blockchain for vSIM management is security. It becomes much harder to carry out a SIM-swap attack because the rightful owner of the SIM controls the private key that authenticates the updating of data on the blockchain. This gives customers the power to provision and manage their own vSIMs, and they can change which device to attach to the operator’s network as often as they wish. This adds much-needed security to vSIMs which will already add significant flexibility to users and operators, but might otherwise be subject to malicious tampering such as identity theft and SIM-swapping.

As use of blockchain evolves, GlobalData will be reporting on new initiatives from telecom service providers. We will also be tracking new uses of blockchain to help combat COVID-19 and provide financial aid to people impacted by the outbreak.

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