Blockchain and its Journey into the Future

Blockchain is not just a technology; it is a technical concept that enables the management of data in a transparent, secure, and reliable manner. Trust in this technology is built over time, so it is crucial to experiment in controlled environments and take the necessary time to validate the promises of the technology. In the exciting world of Blockchain technology, it is essential to avoid expensive developments without a dedicated and committed interdisciplinary team aligned with the project's vision. The collaboration of both technical and non-technical experts is crucial to guide the path to success. It's also important to note that while Blockchain is a powerful tool, it is not a universal solution. Its applicability is specific to certain cases, so it is crucial not to use it indiscriminately. Understanding its defined range of applicability is fundamental to fully leverage its potential and achieve impactful results, as seen in the financial sector. We all know that the core value of the financial industry is security, which is based on the trust customers place in depositing their resources for bank management. In this context, Blockchain technology stands out precisely for fulfilling these two key attributes. Blockchain is the best technical ally to meet technical requirements and current regulations. Additionally, thanks to its immutable record, it creates a complete traceability with a chronological stamp of all transactions. This feature facilitates audits, reinforcing security and transparency in the financial system. At Davivienda, we take pride in being pioneers in the use of this technology and recognize its positive impact not only within the organization but also towards our customers and the sector itself. Blockchain and Davivienda At Davivienda, we tested credit card transactions without a banking core. Initially, with a small-scale test involving 50 users, we confirmed that not only were transactions activated without a core, but the compliance processes and reconciliation were naturally fulfilled. Seeing the benefits, we scaled up, and today we have over 12,000 users and more than 300,000 transactions, but we didn't stop there.

We wanted to explore more use cases in the financial sector and conducted a proof of concept with JP Morgan. This involved issuing, custody, and trading a bond on a Blockchain platform with Quorum.

With the experience gained, we approached government authorities to share our technology experience. The Financial Superintendence of Colombia decided to create a regulatory sandbox to implement, in a record time of three months, a platform to issue the first security (bond) with Blockchain technology in Latin America and the third in the world. This project was done in collaboration with the Inter-American Development Bank (IDB), the Financial Superintendence of Colombia, and the Central Bank. eBono was the first regulated blockchain project in the Financial Superintendence's sandbox, pioneering and opening opportunities for other blockchain projects to be regulated in the country.

The bank saved approximately COP $22 million in registration and maintenance fees in the Colombian Securities Exchange (BVC), COP $111 million in custody fees at Deceval, and 0.01% commission for each award.

This project is a milestone in the history of Davivienda and the Colombian financial industry. It is an example of how Blockchain technology can be used to improve efficiency and transparency in financial markets. It is also a step forward in terms of regulation in Colombia.

This technology provides solutions for other sectors as well. We have worked in the healthcare, government, energy, and agriculture sectors with productive projects that have generated value on a national scale.

During the pandemic, for example, in response to the urgent need for immutable vaccination certificates, we decided to contribute our Blockchain expertise and develop the country's COVID-19 vaccination card. The cards were issued in record time, reaching nearly 19 million (38% of the Colombian population).

For the agricultural sector, we created an e-wallet for the management and traceability of incentives/subsidies/resources. Through a smart contract (Blockchain), we made the resource distribution process more efficient, less costly, transparent, and responsible, ensuring the use of resources exclusively for a specific purpose, with the advantages of not using cash.

In addition to transactional financial products, we developed the credit product of Bank Guarantees on Blockchain. We were the first bank in Latin America to use this technology for issuing bank guarantees. In collaboration with XM, the Wholesale Energy Market Administrator, we launched the first digital Blockchain platform for the electric sector.

G2B is characterized by offering transactional speed, quality in information and service, and, most importantly, end-to-end security and trust. Bank guarantees serve as payment backing for large energy transactions in the country, and through the G2B platform, over 1,200 real guarantees have been issued, totaling COP $20 trillion. This has also optimized the generation times of this support by 98%, attracting the attention of major energy companies in the country such as Gecelca, ENEL, ISAGEN, EPM, among many others.

And what comes next in this Blockchain world?

The technological horizon is in full convergence, and the challenge we face not only involves being experts in the latest innovations but also the ability to forge new possibilities from these powerful tools. Our constant goal is to establish meaningful human connections with end-users, and on this path to excellence, Blockchain emerges as the technical core that will breathe life into products and services. However, it is not alone in this journey into the future; it integrates with other cutting-edge technologies such as artificial intelligence and mixed realities, expanding the spectrum of opportunities we will explore:

● Artificial intelligence integrated with Blockchain: This combination offers significant potential to improve automation, security, and data-driven decision-making.
● Blockchain integrated with the metaverse: These two technologies could drive the economy of virtual worlds, digital assets, and how interaction and commerce occur in these emerging digital spaces, offering new opportunities for organizations.
● Interoperability between emerging technologies: The integration of such technologies can generate opportunities for more advanced solutions and the creation of more efficient and connected digital ecosystems.

The advancements in each of these technologies are exciting, as they have the potential to transform the landscape of technology and innovation. With the increasing adoption by businesses, the development of new use cases, and the improvement of technology scalability and performance, they have the potential to transform the world.