The application of blockchain-based crypto assets for integrating the physical and financial supply chains in the construction & engineering industry

Supply chain integration remains an elusive goal for the construction and engineering industry. The high degree of fragmentation and the reliance on financial institutions has pushed the physical and financial supply chains apart. The paper demonstrates how blockchain-based crypto assets address this limitation when used for conditioning payments on the flow of products. The integration of flows is contrasted in today's supply chains and those using crypto assets for their payment settlement. The thesis is validated in two construction projects where a smart contract administered payments in crypto currencies and crypto tokens. The findings reveal that crypto assets can enhance both the granularity and the atomicity of the integration between the cash and product flows; the on- and off-chain realities can be directly linked in crypto asset-enabled supply chains. The paper concludes with a discussion of risks such as regulatory landscapes, security, and price volatility and offers potential solutions.

Automated summary

This paper discusses how blockchain-based crypto assets can address the issue of supply chain integration in the construction and engineering industry. Through case studies of two construction projects, it is validated that crypto assets have the potential to enhance integration granularity and atomicity.