Category Archives: ASX

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Vendors Pushing Blockchain, Says Australia’s Digital Transformation Agency

Australia’s Digital Transformation Agency (DTA) has been revising its position on blockchain technology after the Australian government ordered an inquiry into its uses earlier this year.

The basis of the DTA research funded by the Federal Government to the tune of AUD 700,000 (USD 530,000) was to research blockchain, and see how it could be used to improve government services, including welfare payments. The investigation was ordered by Australia’s former Prime Minister Malcolm Turnbull before he was overturned last month.

Originally, social security and welfare payments by Centrelink were targeted for an overhaul, perhaps by using DLT. The DTA felt at the time that there were significant advantages of delivering social security welfare to citizens over a blockchain. Centrelink, part of the Department of Health Services (DHS), is responsible for a range of payments, particularly those relating to unemployment, pensions, and health.

It appears after the investigation, the government is less likely to be ready for taking the next move, which would see blockchain utilized among a range of government department services. At a recent Senate estimates hearing, DTA chief digital officer Peter Alexander said:

“It’s an interesting technology but it’s early on in the development. It’s at the top of a hype cycle. A lot of the engagement [with the agencies] is comparing blockchain against existing technologies… without standardization and a lot more work, for every use of blockchain that you would consider today there is a better technology.”

Alexander claimed that blockchain promotion lay at the feet of vendors who had been pushing the technology rather than central governments and users and deliverers of blockchain services.

It appears that the Australian stock market is more impressed than the government with DLT after the Australian Securities Exchange (ASX) stated earlier this year that it has plans to replace its current clearing and settlement system with a DLT model within the next two years.

The current system, the Clearing House Electronic Subregister System (CHESS) which has been used by ASX since the 1990s, will be replaced with blockchain technology possibly in 2020.

 

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Hong Kong Stock Exchange Looks to Blockchain and Fintech Acquisitions

Hong Kong Stock Exchange (HKEX) has announced that it is considering investments in blockchain and other fintech companies through acquisitions next year.

If this materializes, it will represent a change in direction for the exchange which has close relationships with China. Hong Kong, being an autonomous territory of China, has a political system independent from the rest of the country, affecting both the economy and its commercial system. Many Chinese businesses have moved their operations to Hong Kong after China’s crackdown on ICOs and cryptocurrency in general. These included the world’s largest exchange, Binance, which moved from Beijing to Hong Kong and other locations around the globe to escape punitive legislation.

The territory is now laying claim to becoming a major hub for cryptocurrency and blockchain in the region, even creating a recent “talent list” to employ more industry professionals to support its DLT focus in the years to come through a new employment program. A fintech lead at InvestHK reflected on Hong Kong’s push towards blockchain:

“Blockchain is a very high priority for us. There is hype, and there is the fast grab of money with ICOs in some cases. But what we are looking at building here in Hong Kong is an infrastructure for new businesses and existing businesses, to make sure the technology and innovations remain a key enabler for financial sector growth.”

Unconfirmed sources suggest that Charles Li, CEO of HKEX, is now looking at blockchain and has had meetings with both potential start-ups and established companies. Concern remains about the current poor relationship between China and the US, and how this might affect businesses in Hong Kong. This is a possible reason why the exchange is considering adopting its own venture capital model similar to that of Nasdaq.

Earlier this month, HKEX senior managers had discussed possible acquisitions and more, the results of which will be revealed next year. Banny Lam, head of research at CEB International Investment, told Bloomberg, “The strategy is in the right direction but it is not easy to achieve the targets. HKEX needs to maintain a momentum of growth by exploring new businesses.”

In March, Financial Times reported that HKEX was collaborating with the Australian Securities Exchange (ASX) to implement blockchain. Perhaps, this is an indication of the direction the exchange is willing to take when it reveals its plans next year. Blockchain company acquisitions may be on the table.

 

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UK Think Tank Director Calls Blockchain a Fad

Martin Walker, the UK director for the non-profit Center for Evidence-Based Management (CEBMa), has called blockchain technology a “fad” in an address to the British Parliament’s Select Committee.

Walker’s comments were made in stark contrast to representatives also present at the meeting from blockchain companies Everledger and Ripple, and a researcher from King’s College London, all of whom spoke of the potential benefits of the technology, in that it could save the banking industry millions of dollars.

He made his comments on Tuesday to a room full of British MPs, while giving evidence to a House of Commons Treasury Committee, adding that he saw the new technology behind cryptocurrency as nothing more than “magic wand, pixie dust things”. Walker went on to say that blockchain was “a distraction from looking at getting some of the basics rights” in the banking industry.

The CEBMa director had worked previously as a consultant to the R3 blockchain consortium, which has complete trials for financial institutions and major banks across the globe. He went on to tell the  Treasury Committee that “in terms of demonstrable benefits” of the blockchain, there’s “little to nothing.” He went on:

“All that it takes to make a credible idea into a fad is people just switch off their brains and stop thinking. Over 20 years in and around the banking industry — blockchain is a fad, but I have seen many fads in my career.”

Economist Garrick Hileman from the University of Cambridge says that data now shows that central banks are active in their interest in blockchain technology and many are trialing it for a variety of different cases, including new central bank digital currency, new payment systems and records management. He argues:

“If you’re a central bank providing critical infrastructure – payment systems, thinking about maybe moving away from physical cash to a completely electronic money-based system, having a technology that is resilient and will have zero downtime is actually really important.”

On the drawback side, Hileman points out that although Bitcoin is famous for offering high levels of privacy, blockchains can leak data and it is possible to find out “who’s doing what”due to it being on public record.

This week saw a major move from Australia’s biggest stock exchange (ASX) which announced its decision to go ahead with using of blockchain technology with plans to replace its current clearing and settlement system with a DLT model within the next two years.

 

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