Blockchain Market in India Trends, opportunities, challenges and potential use-cases November 20 th, 2018

Executive Summary Market Overview Trends Shaping the Indian Blockchain Market Challenges and Corrective Actions Blockchain Use Cases Agenda Gain deeper understanding of the Indian Blockchain market trends, opportunities and in-depth challenges and discuss use cases for Indian industries 5 2

Executive Summary Despite the hype, Blockchain technology is still immature and its ability to grow will depend upon the shape of ecosystem, standards establishment and regulatory barriers addressed Scalability Strategic Value Path to Success Blockchain is still five years away from feasibility at scale, primarily because of the difficulty of establishing common standards and technological constraints associated with it To overcome the scalability challenge, regulatory bodies needs to develop a common set of standards Technology companies need to change their game and focus on intersection of new technologies and development of new offerings such as Blockchain as a Service In the short term, companies to gain benefits such as Cost Reduction, Fraud Prevention, Business Efficiencies and Transparency In the long term, technology companies to build transformative business models Collaboration among the various market participants would continue to remain a key success factor in this market, However like any other growing market, the industry will witness growth of new technology vendors developing platform-based solutions Blockchain Implementation In India will be a costly affair as the technology involves huge computing power and expenditure on validation and maintenance 3

Blockchain Market Overview Blockchain Market is in exploratory stage with notable effect in Financial Services Industry 4 Blockchain is a distributed ledger, or database, shared across a public or private computing network. It can operate as two networks, based on who is authorized to participate: o Public Network: Decentralized open environment where there are no restrictions on joining the network o Private Network: Within the confines which is defined by a controlling entity US 18% UK 2% India 6% China 30% Australia 8% Japan 4% Hong Kong 5% 50% - CAGR $5 B - Estimated growth by 2023 Blockchain to create significant value globally by 2023 FINANCIAL SERVICESGOVERNMENT ENERGY, UTLITIES AND MANUFACTURINGHEALTHCARE 12% 14% 17% 41% Key Industry Verticals Investing In Blockchain “ It is indeed possible for India to be in the leadership ranks of blockchain in the next five years, with the right amount of industry and government participation ” Sreeram Ananthasayanam PwC Partner – Government and Public Services, India Source: PWC Global Blockchain Survey 2018, Base=600 & Nasscom Source: PWC India Fintech Survey 2018, Base=500

Consortiums and industry regulators to define protocol and common standards State Government are first movers to discuss the feasibility of blockchain in consensus with regulatory Regulatory bodies partnering with banks and fintech to test blockchain scenarios and its future feasibility Evolving business models such as Blockchain as a service enabling more companies to adopt blockchain by saving cost of infrastructure Intersection of Blockchain, IOT and AI leading to new business applications in Manufacturing and Healthcare Market Dynamics o Emergence of start-ups developing vertical specific solutions o Rising Venture Capital Funding o Evolving partnership between banks, solution provider, system integrators and other companies o Increased use cases and pilots in BFSI (most common use cases are cross-border payments, trade finance, clearing and settlement) Potential use cases moving beyond Financial Services industry to Manufacturing, Distribution, Services and Government Industry Trends Indian Blockchain industry is still in its nascent stage which will be shaped by technological advancements, regulation & standards, and increased adoption by various verticals Technology Regulatory trends Market Structure Trends Brief description 5

Blockchain Use Cases At a broad level Blockchain uses cases in India are either in Proof of Concept Phase or either in futuristic stage creating strong impact over the industries in next 2-5 years Banks and Financial Institutions Trade Finance, Supply Chain Financing E-KYC Document Management Cross Border Payment Healthcare Patient Record Management, Fake Drug Track & Trace Patient Data Sharing Government Voting Management Digital Identity Land Records & Management Telecom & Manufacturing Mobile Number Portability Supply Chain Monitoring Besides these vertical specific use cases there are some of them which are not relevant to a particular industry but can be adapted across the different organizations. The prominent among these are Loyalty, Transfer pricing, and Smart Identity Vertical Agnostic Use Cases Use Cases which are on verge of pilot this year or in the coming few years 6

Blockchain Challenges Though the technology offers several potential use cases but scale remains the biggest hurdle Lack of Common and Transparent Governance Structure Regulatory Challenges Blockchain set up may not be fully compliant with the established regulatory mandates Blockchain contracts can become vulnerable Competitive Risks Wide range of industry specific potential cases but most are in early stage and unproven Operational Challenges Technology Challenges Blockchain migration can be cost inductive and cause integration challenges The paucity of required technical manpower will compound the migration challenges Data Exchange Protocols are not mature enough Common DL and network protocols and standards are lacking Performance and latency issues with Public Distributed Ledger Regulatory to invest in assessment of adoption and market regulation Development of new solutions through strategic partnerships Blockchain use cases to boost cloud adoption and creation of new business models Corrective Steps Planned Ahead

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Future Beckons Use Cases which are in futuristic stage or on verge of pilot this year or coming few years 9 9 Health Data Exchange & Interoperability Mobile Number Portability Person to Person Microgrids Some of the cases from Healthcare, Government, Telecom and Utilities are Enables Immutable and trusted workflow to maintain data integrity Ensures free, fair and transparent elections and voting processes Distributed Ledger enables transparent and efficient movement of customers Blockchain based platform acts as an added transaction layer that reimburses users for excess clean energy Blockchain value cannot be changed and it can keep the records secured over a ledger with a time stamp. Hence, allowing anyone to verify the records at any time. When a person votes, a ledger is created with time stamping allocating each voter an unique identifier which avoid any mistakes in counting and can not be modified or tampered E-Governance and Citizen Data Record Management are some the other key potential use cases in Government sector By maintaining an inter-company ledger, customer numbers can be ported swiftly and in addition, databases can be managed effectively. Blockchain has other convincing use cases in telecom sector: Smart Transactions, Data And Content Monetization. Blockchain allows users to store and trade data at a local level and enables users to transcate among themselves It also manages all energy debits and credits of accounts, automates trading and measures each participant’s ongoing financial statements Smart Home Meters & IOT Utilities Management are the other significant use cases which might create significant value in Utilities Fair Voting Process Healthcare companies gather data from patient’s personal devices and sensors and later encrypt and digitally sign the data The data is registered in the Blockchain along with user’s unique identifier, for this update, the patient is notified Patient or user has full access and control on the data, the user can view an log of who accessed his Blockchain The other key potential use cases in healthcare industry are Precision Medicine Practice and Fake Drug Track and Trace System Besides these vertical specific use cases there are some of them which are not relevant to a particular industry but can be adapted across the different organizations. The prominent among these are Loyalty, Transfer pricing, and Smart Identity Vertical Agnostic Use Cases

Global Blockchain Adoption Despite the Hype, the technology is still immature in India 10 Competitors’ Approach Low High Feasibility High Low Impact Blockchain Opportunities of Key Industrial Sectors Trade and Supply Chain Finance Cross Border Payments Government Records Land Registry Healthcare Payments Finance Utilities Automotive Telecom Healthcare E-Voting Transaction Monitoring Repurchase Agreements Electric Vehicles Charging Tracking Supply Chain Transaction Person to Person Micro grids IOT Utilities Management Smart Home Meters Subscriber Authentication Healthcare Research Arts and Recreation & mining are some of the industries which have low blockchain feasibility and their impact would also remain medium Blockchain as a Service

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Blockchain Challenges Though the technology offers several potential use cases but scale remains the biggest hurdle Lack of Common and Transparent Governance Structure o In implementation of an effective governance there are issues regarding who would control and be accountable for Distributed Ledger systems (DL), it issues or third parties involved Blockchain set up may not be fully compliant with the established regulatory mandates There is a possibility that smart contracts accessing the transaction data may leak information on what is being processed due to lack of strong governance, resulting in confidentiality breaches Competitive Risks o A private blockchain network if becomes the default network and gets dominated by major players, competition risks may materialize, smaller players may be at a business disadvantage Migrating to new blockchain based infrastructure can be technologically challenging, companies has to Companies have to worry about cost and integrational challenges associated with legacy systems including System of Record, CRM, BI, risk and compliance systems o 60% of Indian organizations are still using old system components ( Mckinsey report 2018) The paucity of required technical manpower will compound the migration challenges o According to research conducted by a blockchain company, Incrypt, highlights, only 5,000 (0.25%) of the 2 million software developers in India currently have the right blockchain skills Using different DLs require data sharing capabilities currently the data exchange protocols and formats are not mature enough Common DL and network protocols and standards are lacking Public DL use cases are highly computational power intensive which makes DL slower than databases, also results with latency issues Blockchain offers a range of potential use cases but most are in early stage and unproven o 56% of companies use Block chain as part of their innovation strategy but not many implement it o 77% of traditional businesses can envision practical use cases but significantly fewer are implementing them Regulatory Challenges Operational Challenges Technology Challenges Source: PWC and Deloitte Survey conducted in 2017 Scalability to induce three different Challenges 12

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