international developments · ibm to open blockchain ‘garages’ in singapore, tokyo, ny and...
TRANSCRIPT
International Developments
ACI Blockchain and
Distributed Ledger Technology
Judith Rinearson
April 14, 2016
New York, NY
2
• Introduction – What is Blockchain
• Themes
• Developments in
– Europe
– Asia
– Africa & Middle East
• Regulatory Concerns
• Conclusion
Agenda
3
• The blockchain is a distributed-ledger technology that can help provide secure, fast, transparent transactions.
• To be effective, blockchain technology requires coordination and collaboration between banks, payment companies, trading platforms, and payment clearinghouses.
• The technology under the blockchain is not new – it is basically an encrypted database that is distributed across a computer network.
• “But what makes it different is it can only be updated when everyone on that network agrees, and once entered the information can't be overwritten, making it extremely secure and reliable.”
– BBC News – 29 March 201 6 - - http://www.bbc.com/news/business-35890616
What is “Blockchain”?
4
The key to blockchain:
Data Accuracy and Security: a constant concern..
Tally sticks came into use in England after the Norman invasion. Tax assessments were recorded by cutting notches in a wooden twig and
then splitting the twig in two, so both sheriff & King had a durable record of the assessment. When it was time to pay up, the sheriff would
show up with the cash and his half of the tally to be reckoned against the King’s half.
Cunningham, W. Royal Revenues in The Growth of English Industry and Commerce during the Early and Middle Ages (Cambridge University
Press, 1915). [WITH THANKS TO DAVID BIRCH – CONSULT HYPERION]
5
Then - -
• Cheap
• Long-Lasting
• Unalterable
• Understandable
And now add - -
• Fast
• Global
• Trackable/monitorable
Tally Sticks – Accounting Records – Databases – Blockchain
6
• Key Themes
– Remittances
– Incubators & Garages
– Stock trades & Financial Markets
– Banking
– Settlement
– Peer to Peer payments and lending
– Bill payments
Global Developments in Blockchain
7
Remittances
Visa Europe Makes Blockchain Investment
Visa Europe Collab, the card network’s innovation team, is working with
blockchain startup Epiphyte to explore blockchain-based remittances
platforms. The companies hope to spend the next two months testing a
blockchain-based remittances prototype on real-world transactions to see if
it’s effective.
Blockchain Developments in Europe
http://www.businessinsider.com/visa-europe-makes-blockchain-investment-2015-
11 Nov 2016
Blockchain technology, which powers bitcoin and other cryptocurrencies,
has the potential to simplify financial processes. It could enable
transactions to pass between two parties instantly and without the need for
centralized authorities like clearing houses. That improved efficiency and
increased security could simplify cross-border transfers and multi-currency
transactions, which are key for remittance organizations.
8
Peer- to- Peer Lending and Payments
European Blockchain Incubator Launches First Public
Proof of Concept, MoneyCircles.com
MoneyCircles.com is a decentralised peer-to-peer lending app built
on Uphold (formerly Bitreserve) which allows circles of people to get
together and mimic a credit union to save & lend with one another
based on a ‘common bond’. By using smart contracts this allows for
total transparency and verifiability, a first in the financial services
market.
MoneyCircles.com is created by Outlier Ventures Ltd, Europe’s first
dedicated blockchain incubator setup to seed, develop and launch a
new startup every 3-6 months across a variety of sectors.
Blockchain Developments in Europe
http://www.coindesk.com/press-releases/blockchain-incubator-launches-moneycircles/
October 2015
9
Blockchain Developments in Europe
Stock Trades & Financial MarketsNine of world's biggest banks join to form
blockchain partnership
Nine of the world's biggest banks including Goldman Sachs
and Barclays have joined forces with New York-based financial
tech firm R3 to create a framework for using blockchain
technology in the markets, the firm said on Tuesday.
It is the first time banks have come together to work on a
shared way in which the technology that underpins bitcoin - a
controversial, web-based "crytocurrency" - can be used in
finance.http://www.reuters.com/article/us-banks-blockchain-
idUSKCN0RF24M20150915idUSKCN0RF24M20150915
September 2015
10
Settlement
Blockchain venture targets high-speed securities
settlement
A new blockchain technology venture, headed by the founder
of pan-European equities platform Chi-X, plans to deploy an
infrastructure that will rapidly speed up securities settlement.
The new venture, called SETL, will enable market
participants to move cash and assets directly between each
other, and to facilitate the final settlement of transactions.
SETL is led by Peter Randall, former CEO and founder of
Chi-X, and Anthony Culligan, founder of peer-to-bitcoin
trading site Roolo.
Blockchain Developments in Europe
http://www.thetradenews.com/news/Regions/Europe/Blockchain_venture_targets_high-
speed_securities_settlement.aspx July 2015
11
Incubators & Garages
IBM to Open Blockchain ‘Garages’ in Singapore,
Tokyo, NY and London
Tech giant IBM has announced that it will open so called IBM Garages in Singapore, Tokyo, New York City and London where its experts will be able to collaborate with local developers on the design and implementation of blockchain technology for business.
The initiative is part of IBM’s wider plan of pushing blockchain usage for businesses and came simultaneously as the corporation had unveiled its latest suite of services entirely dedicated to facilitating the development, design and implementation of blockchain technology for developers and businesses
Blockchain Developments in Europe & Asia
http://fintechnews.sg/1590/blockchain/ibm-open-blockchain-garages-singapore-tokyo-ny-
london/ Feb 2016
12
Stock trades and financial markets
Asia's Largest Stock Exchange Operator Partners
IBM for Blockchain Applications
Japan Exchange Group, operator of the Tokyo Stock
Exchange will begin experimenting with blockchain
technology for post-trade solutions such as clearing and
settlement of trades. The operator will team up with IBM
Japan for the project.
The operator of Asia’s largest stock exchange is joining IBM
Japan to run blockchain tests for clearing, settlement, and
other operations.
Blockchain Developments in Asia
https://www.cryptocoinsnews.com/asias-largest-stock-exchange-operator-partners-ibm-
blockchain-applications/ February 2016
13
Banking
Accenture: Asia-Pacific Banks Should Develop
Blockchain Strategies
Asia-Pacific (APAC) banks, credit card firms and startups
can be expected to increasingly focus on blockchain
technology in the coming years, according to a new report by
Accenture.
The management consulting services firm, which has
recently been assertive in voicing its opinions on the
emerging technology, stated that this trend would coincide
with the need for FinTech firms to streamline operations and
comply with regulations.
Blockchain Developments in Asia
http://www.coindesk.com/accenture-asia-pacific-banks-blockchain-strategies/
November 2015
14
Banking
Africa’s big banks are betting on fintech startups and
bitcoin to beat disruption
African banks have been late to the fintech party, but after leaving huge swaths of the population to get their financial services from telcos (most famously Safaricom’s M-Pesa in Kenya), banks here are increasingly seeing the continent as a testing ground for new financial technologies like bitcoin and the blockchain.
“You have a headwind from Silicon Valley and Europe blowing into Africa now around the disruption in fintech. The banks are really nervous and they want to get ahead of this,” says Mbwana Alliy, managing partner at African technology venture firm, the Savannah Fund.
Blockchain Developments in Middle East & Africa
http://qz.com/618674/africas-big-banks-are-betting-on-fintech-startups-and-bitcoin-to-beat-disruption/
Feb 2016
15
Incubators & Garages
Bitcoin and Blockchain Will Help Africa Achieve Global
Inclusiveness, Says Kenyan Blockchain Incubator Founder
Space Kenya Networks Limited, a Kenyan web development company, recently announced the launch of its blockchain incubator BitHub. CCN spoke with the director of Space Networks Kenya and founder of BitHub to discuss the crypto- and bitcoin-space in Kenya.
In a statement found on the website, BitHub describes its mission as: “Solving problems using innovative Blockchain solutions that are currently under development across the World.” Furthermore, the company says:” We believe that blockchain solutions will make substantial contributions to rethinking existing structures in the following political, social and economic sectors.” The company aims to “Bring together a consortium of individuals, organizations, and expertise to drive the development and adoption of blockchain technologies especially within the African continent,”
Blockchain Developments in Middle East & Africa
https://www.cryptocoinsnews.com/bitcoin-and-blockchain-will-help-africa-achieve-global-inclusiveness-says-
kenyan-blockchain-incubator-founder// Jan 2016
16
Bill Payment
Blockchain Smart Meters: Solution to Africa’s
Utility Crisis and Struggling Schools?
Bankymoon, a South African-based Bitcoin solutions company, is changing how people pay for utilities, making them more affordable. Bitcoinist spoke with Lorien Gamaroff, founder and CEO of Bankymoon, to find out more about the utility crisis in Africa and what Bankymoon is doing to solve it. Lorien, a South Africa native, shared with us about the crisis and how it is impacting Africans and the education systems
Today, Africa is in a state of crisis due to its current unsustainable utility metering system. This metering system is what’s referred to as “post-paid,” meaning consumers pay after they have consumed the utility. Many Africans find it difficult or impossible to pay their utility bills due to inflated utility costs and inefficient payment solutions. The crisis is severe. Lorien states
Blockchain Developments in Middle East & Africa
http://insidebitcoins.com/news/blockchain-smart-meters-solution-to-africas-utility-crisis-
and-struggling-schools/34940 Sep 2015
17
Currency
Blockchain: The next mobile phone for Middle
East and Africa?
Recently Tunisia replaced its self-created e-Dinar digital currency with a
blockchain-based version. Was this a case of federal “cognitive
dissonance”? After all the fundamental pillar of distributed ledger
technology is the lack of a central authority, a truly democratized system
where participants need to ‘agree’ for transactions to be final and
irreversible. Tunisia, a North African country with a population of 11
million, has now the unique distinction of being the world’s first country to
issue national currency using blockchain technology. While the
technology is still evolving, it definitely has immense potential towards
disrupting several industries especially with regards to Middle East and
Africa.
Blockchain Developments in Middle East & Africa
https://www.linkedin.com/pulse/blockchain-next-mobile-phone-middle-east-africa-pinaki-aich
Jan 2016
18
Incubators & Garages
Dubai Government Backs Expansive Blockchain
Research Effort
An innovation center established by Sheikh Mohammed bin Rashid, vice
president and prime minister of the United Arab Emirates (UAE) and emir
of Dubai, has announced the formation of a research council focused on
blockchain technology.
Launched in 2015, the Museum of the Future was created with the
mandate to encourage innovation and help foster investigation of new
technologies within the Middle Eastern nation. The keystone of the
project will be an architectural centre (estimated to cost $136m) and set
to be completed in 2017.
Blockchain Developments in Middle East & Africa
http://www.coindesk.com/dubai-government-backs-expansive-blockchain-tech-research-
effort/ feb 2016
19
• Concerns Raised by the UK’s Open Data Institute -- in
response to the Government Chief Scientific Advisor’s Report
on Distributed Ledger Technology: January 2016
– Too much hype
– Too little consideration about the risks
– Like most new technologies, blockchains could cause significant
damage if used indiscriminately.
– Cases where people are trying to bolt old, failed or impossible policy
and business ideas onto the new technology
– People “unnecessarily reinvent things that work perfectly well.”
– We’ve seen many ideas that would put new personal data into
blockchains but learnt that, if misused, this will create significant new
privacy issues.
– The core problems that blockchain technologies help to address is of
growing importance and an area that shows some promise, but few
people are thinking about it.
Regulatory Concerns
20
• Need for industry standards
• Need for more trained technical coders and computer engineers
• Premature regulation – state licensing laws on virtual currency being extended to non VC products and services
• How to eliminate “the settlement issue” - eventually all transactions need to be settled, but we can’t see how to do it without using bitcoin or other digital currencies.
• Large bank and financial service companies dominate and crowd out smaller competitors
• Moving too quickly, inability to keep up with change
• Impact on legacy systems
Industry concerns
21
• Blockchain is Global
• A True Primordial Soup of Innovation
• No one is waiting for regulators
• But they’ll be there soon enough…
Conclusion
22
Judie Rinearson
Partner, Bryan Cave LLP
Telephone London: 44 (0) 20-3207-1280
Telephone New York: 1-212-541-1135
Questions?