Tech
Blockchain is on McKinsey’s list of top tech trends for 2024
In its latest report, “Technology Trends Outlook 2024,” McKinsey & Company includes blockchain as one of the most significant technological advances.
The report highlights the transformative potential of blockchain in the digital space and explores its role in tokenization.
Exploring the potential of the intersection of AI and blockchain
The consultancy closely links blockchain’s prominence to the broader theme of digital trust and cybersecurity in its report. Real-life applications of artificial intelligence (AI) and blockchain are among the points McKinsey’s analysis highlights.
Although analyzed separately, some points in the report hint at the potential of the intersection of AI and blockchain. For example, blockchain could enhance AI capabilities by providing a secure and transparent data repository and facilitating complex transactions. This synergy is evident in various applications, from AI-based financial analysis to secure data sharing in healthcare.
To know more: AI in Finance: Top 8 Artificial Intelligence Use Cases for 2024
Furthermore, the integration of blockchain with Generative AI technologies are driving innovation across industries. Companies like IBM are developing tools to mitigate AI risks, such as bias and privacy concerns, by leveraging the secure infrastructure of blockchain. This collaboration ensures that AI technologies can operate with greater transparency and accountability.
Nuro Serafim, Managing Partner of 3 Comma Capital, also supports the potential of convergence between AI and blockchainHe added that the synergy between these technologies will have a significant impact on the energy sector, optimizing smart grids.
“However, there is a clear temptation for entrepreneurs to force an unrealistic convergence of these two technologies in the search for capital that matches the need of VC investors to be at the forefront of advances. Therefore, investors, namely professional investors, need to be armed with the knowledge to filter and do due diligence on all this extra complexity,” Serafim explained to BeInCrypto.
From Pilot to Mainstream: Tokenization’s Journey to Financial Integration
Furthermore, the report highlights tokenization as one of the real-life uses of blockchains. Tokenization, which involves the creation of digital representations of real world assets (RWA) on a blockchainis moving from pilot projects to large-scale deployment.
The McKinsey report notes that several financial giants are making key developments in this area. For example, Citibank’s Citi Token Services converts customer deposits into digital tokens, enabling instant cross-border payments and liquidity management.
Additionally, Franklin Templeton has leveraged public blockchains Stellar and Polygon to create its first tokenized mutual fund registered in the United States—Franklin OnChain US Government Money Fund (FOBXX). Similarly, Societe Generale’s issuance of tokenized green bonds on the Ethereum network marks a significant milestone. These products have showcased blockchain’s potential to disrupt traditional financial instruments.
“Tokenization improves transparency, composability, and programmability, enabling financial institutions to improve operational efficiency, increase market liquidity, and create new revenue opportunities. […] Growing user awareness and investor demand will further accelerate this trend,” said Matt Higginson, partner lead for McKinsey Values in Boston, She said.
To know more: How will artificial intelligence (AI) transform cryptocurrencies?
While the potential of blockchain is immense, the report acknowledges the challenges associated with its adoption. These include integration with existing systems, regulatory uncertainties, and the need for effective cybersecurity measures. However, McKinsey emphasizes that organizations can overcome these obstacles with top-down leadership and strategic investments and fully leverage the benefits of blockchain.
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