Category Archives: CBA

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Canadian Banker’s Association: Outdated Methods Must Give Way to Digital ID

Canadian Banker's Association_ Outdated Methods Must Give Way to Digital ID

The Canadian Bankers Association (CBA) is driving banks to move towards what it calls a “federated model” of digital IDs replacing outmoded paper models throughout the country’s financial system.

The new system suggested would link links federal and provincial systems and allow user identities to be authenticated electronically. Canada’s six largest banks have also been collaborating with SecureKey Technologies Inc for the past two years on a blockchain-based system called Verified.Me, which is now seen as one potential solution for making the switch for paper to digital a simple and efficient one.

Neil Parmenter, CBA’s CEO, wants to unlock what he calls the “full potential” of banking in Canada, arguing:

“We should be open to innovative identity verification methods like document review through a live video connection, use of blockchain, biometrics and other methods that have begun to see widespread adoption in other parts of the economy.”

CBA, which represents more than 60 domestic and foreign banks operating in the country, is looking at viable solutions to updating its current security systems in consultation with Canada’s Federal Finance Department. Its suggested form of “open banking” would allow financial data sharing with other companies and banks.

Last year, a paper released by the Bank of Canada brought forth a positive argument for the implementation of central bank digital currencies (CBDCs). Published on 26 July 2018, the paper written by the bank’s Senior Economist in the Funds Management and Banking Department, Mohammad R Davoodalhosseini, went into great detail to emphasize the potential economic welfare gains that a CBDC could have for both Canada and the United States.

 

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President of World Bank: DLT Has “Huge Potential” in Fighting Poverty

Jim Yong Kim, Korean president of the World Bank, has publicly come out in favor of blockchain technology as a tool for fighting poverty in a speech on the Indonesian Island of Bali.

Kim made the comments at the IMF and the World Bank Annual Meeting on October 11, suggesting that DLT had “huge potential” and as a result, the World Bank must keep abreast of emerging technologies.

The World Bank, part of the World Bank Group, is an international financial institution that provides loans to countries of the world for capital projects. It is comprised of two institutions: the International Bank for Reconstruction and Development, and the International Development Association.

At the forefront of all World Bank projects is the need to fight poverty, particularly in underdeveloped or developing nations. Kim referred to the need to combat corruption, often a barrier to successfully supporting developing nations, suggesting that this is a particular area where blockchain could make a significant impact. He commented:

“…we think distributed ledger has huge potential and we issued the first blockchain bond in August, where we created, allocated, transferred and managed the entire bond through blockchain technology.”

He went on to point out that the goal of the bank is to develop universal access to financial services by 2020 which he felt would be unlikely to occur without embracing available technologies and taking advantage of some of the “great things that are coming out,” referring to blockchain and AI.

As Bitcoin News reported recently, the World Bank and The Commonwealth Bank of Australia combined to create an Ethereum-based Australian dollar blockchain bond earlier this year. As for selecting both the CBA and Ethereum for the project, World Bank treasurer Arunma Oteh said that it had worked with the Australian bank for a year before it could launch the project. Ethereum was top of its list as it had “the largest and most active development community globally”.

Oteh continued on a positive note stating that the bank “will continue to seek ways to leverage emerging technologies to make capital markets more secure and efficient.”

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World Bank and Commonwealth Bank Team up with Blockchain

The World Bank and The Commonwealth Bank of Australia have combined to create an Ethereum-based Australian dollar blockchain bond.

The bond project has a target of between USD 50 million and USD 100 million for sustainability projects. The World Bank issues between USD 5060 billion a year for project funding around the world.

With 189 member countries, staff from more than 170 countries, and offices in over 130 locations, the World Bank Group is a unique global partnership: five institutions working for sustainable solutions that reduce poverty and build shared prosperity in developing countries.

The World bank has three priorities in working with countries to end poverty and boost prosperity for the poorest people. It helps to create sustainable economic growth, the surest path out of poverty. It also invests in people, through access to health care, education, water and sanitation, and energy, building resilience to shocks and threats that can roll back decades of progress.

The Commonwealth Bank of Australia (CBA) is one of the country’s big four banks and has been chosen to be responsible for the new blockchain bond after consulting with investors. Microsoft had carried out an independent review of the CBA’s blockchain platform which will run on the MS Azure cloud platform.

The World Bank sees blockchain as the ability to streamline its necessary processes simplifying the raising of funds and operational conditions. The banking giant issued its first global bond as far back as 1989 and the first electronic bond in 2000.

As for selecting both the CBA and Ethereum for the project, World Bank treasurer Arunma Oteh said that it had worked with the Australian bank for a year before it could launch the project. Ethereum was top of its list as it had “the largest and most active development community globally”.

The CBA has recently been very active in using blockchain for a number of its recent projects including a shipping project reported by Bitcoin News recently. The bank shipped 17 tons of almonds from Sunraysia to Hamburg, Germany using a newly-developed blockchain platform. The trial demonstrated the usefulness of blockchain technology in international supply chains by tracking the almonds every step of the way from packing in Australia to delivery in Germany.

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17 Tons Of Almonds Shipped from Australia to Germany with Blockchain

The Commonwealth Bank of Australia (CBA) has announced that it has successfully shipped 17 tons of almonds from Sunraysia to Hamburg, Germany using a newly-developed blockchain platform. This live trial has demonstrated the usefulness of blockchain technology in international supply chains by tracking the almonds every step of the way from packing in Australia to delivery in Germany.

The managing director of Industrial and Logistics at CBA, Chris Scougall, says, “Our blockchain-enabled global trade platform experiment brought to life the idea of a modern global supply chain that is agile, efficient and transparent. We believe that blockchain can help our partners reduce the burden of administration on their businesses and enable them to deliver best-in-class services to their customers.”

This blockchain trial was a coordinated effort between the CBA, Olam Orchards which provided the almonds, Pacific National which provided rail transport, the Port of Melbourne, Patrick Terminals, OOCL Limited which provided shipping, and LX Group which provided technical support.

The blockchain stored documentation, finance information, and operations information. As the shipment passed through various countries, customs documents were uploaded and could be viewed by all the parties involved. The location of the shipment could be tracked at all times, as well as temperature and humidity inside the shipment which was measured by instruments connected to the internet of things (IoT). Overall, the blockchain platform provided full transparency to the supplier and consumer, so they could see that the shipment was authentic and the goods were in optimal conditions at all times, and if there were any problems along the way they would know about it.

The blockchain is inherently cryptographically secure and immutable, so people who use this supply chain blockchain know the data is trustworthy. The data can be used to make the supply chain shorter and stronger in the future, making their enterprises more profitable.

Chief commercial officer at Patrick Terminals, Ashley Dinning, says, “We are always looking for ways to innovate and drive better results. This project has provided a heightened level of transparency, enabling us to explore further efficiencies for our business, such as improving yard management.”

 

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Embarrassment for Aussie Bank with $530M AML Fine After Positive Blockchain Spin

The Commonwealth Bank of Australia (CBA) is to pay settlements of USD 530 million for breaching anti-money laundering (AML) and counter-terrorism financing laws, writes the BBC.

The Commonwealth Bank is one of Australia’s big four banks along with Australia and New Zealand Banking Group (ANZ), National Australia Bank and Westpac Banking Corp.

The settlements are being paid to the Australian Transaction Reports and Analysis Centre (AUSTRAC) for failing to report 53,506 bank transactions, improperly monitoring 778,370 accounts for money laundering red flags, and filing 149 suspicious matter reports over a period of three years.

The CBA argues that a single coding error had led to the failure to report the 53,506 transactions and that it wasn’t aware that the bank had violated AML laws, although it did admit to lack of due diligence.

“Our agreement today is a clear acknowledgement of our failures and is an important step towards moving the bank forward. On behalf of Commonwealth Bank, I apologize to the community for letting them down,” said CBA current chief executive, Matt Comyn.

Given bank demands for tougher regulation on cryptocurrencies because of digital currency’s perceived susceptibility to being used for money laundering, this news comes as somewhat of an embarrassment for those banks calling for tougher AML legislation on crypt assets. Endless media reports have suggested that Bitcoin is used for criminal activity.

A recent panel held by the US Senate Judiciary on modernizing anti-money laundering laws discovered that only a small percentage of such activity involves cryptocurrency. Columbia University’s economics professor Edgar Feige cited last month that 50% of the world’s fiat currencies contribute towards illegal activity such as drug and arms trafficking, writes Bitcoinist.

A further embarrassment to the CBA is the fact that two years ago, the now-ousted CBA executive, Ian Narev was extolling the “transformational” potential of blockchain for the bank’s customers:

“Our intention is to be right in the middle of the early stage R&D, because it has the potential to be that transformational for the business – both for customer benefits and for processes and costs,” adding that DLT tech could be, “…more significant than anyone even thought they were. That is something we would expect to pan out over the next couple of years [for distributed ledger technology].”

A CBA ledger built on the blockchain would’ve made it much more difficult to conceal 53,506 transactions, saving AUSTRAC a lot of time and money investigating the breach.

If a court approves the fine, it will be the largest civil penalty in Australian corporate history. The bank, Australia’s largest lender, said it would also cover AUD 2.5 million in legal fees accrued by investigators, according to the BBC.

 

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