Daria is an economic student interested in the development of modern technologies. She is eager to know as much as possible about cryptos as she believes they can change our view on finance and the world in general.
Tobacco giant Philip Morris pivots to blockchain in a bid to improve tracking of tax stamps that are printed on cigarette boxes indicating that a tax has been paid.
Philip Morris International, the world’s leading company in the tobacco industry, has decided to join the crypto community and hook into the blockchain. As Philip Morris’s global head of architecture and tech innovation Nitin Manoharan stated, the company wants ‘to do public blockchains’ and is currently working on that.
According to Manoharan, the possible way for the company to use blockchain is to exploit the technology for tracking tax stamps that are printed on cigarette boxes and indicate that a tax has been paid. As the executive explained, doing the stamps in a traditional way is a slow and outdated process.
Moreover, these bits of paper are worth about $5.50 per packet, costing the industry and governments $100 million a year. Instead, the tobacco giant could make this process automatic and perform the transactions on a digital public ledger, which would not only reduce possible fraud with the traceability and transparency but also allow the company to save a much as $20 million a year.
Currently, there are a number of companies that use enterprise blockchains. And only approved parties are allowed to participate in these blockchains. According to Philip Morris, their technology would be widely accessible.
Nitin Manoharan said:
“The aspiration is an industry-wide blockchain that interested stakeholders can come in and subscribe to it and benefit from it. If they see no value they can just leave.”
Further, he noted that anyone could run a node without permission. He said:
“We want to make sure that the minimum viable ecosystem we put in place is attractive to all the stakeholders who participate in this particular ecosystem.
So there needs to be a value proposition, there needs to be a reason for taking part. Because if there’s not sufficient value on the table they will not engage. So the only way to make it sustainable is to ensure stakeholders benefit from this blockchain.”
According to Manoharan, open networks are really promising. He explained:
“Permissioned blockchains are fairly simple. The opportunity is small and you can achieve everything that permissioned blockchain does with existing infrastructure and existing tools. The real value is with public blockchains where you can have multiple players coming in and participating in a trustless manner.”
Other Blockchain Use Cases For Philip Morris
Tax stamps are one of six potential cases for which the company could use the distributed ledger technology. And this way of use is set to go live within the next year.
Nitin Manoharan stated:
“We view it use case by use case. But this particular use case, for me it’s a public blockchain use case. I wouldn’t say public for all of them: there are quite a few use cases that are purely internal and need to go through access control etc.”
Other options to exploit blockchain by the tobacco giant are still unclear. It is unlikely that the company will develop its own crypto, but most probably Philip Morris will tailor Ethereum blockchain and Multichain to create this new open-access network, which is an interesting way to stay onboard in our fast-developing world and attract more customers.