Category Archives: DLT

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Aussie Govt Considers Blockchain for Services, Welfare Payments

Australia’s Prime Minister Malcolm Turnbull has asked the country’s Digital Transformation Agency (DTA) to research blockchain, and how it could be used to improve government services, including welfare payments.

The Australian government has granted the agency a budget of AUD 700,000 (USD 530,000) in order to carry out an investigation into DLT, according to ITNews.

“The Prime Minister, in fact, wrote to our minister and asked us to have a look at blockchain, which evolved into this particular piece of work,” DTA chief digital officer Peter Alexander said.

The move is not entirely surprising given recent interest among financial instructions in the country, most significantly, the Australian Securities Exchange’s (ASX) recent plans to replace its current clearing and settlement system with a DLT model within the next two years.

“ASIC (the Australian Securities and Investments Commission) [was] looking at blockchain, immigration – now home affairs – was looking at blockchain and considering it, and more agencies were talking about it,” Alexander said, adding, “Lots of vendors were coming to government and talking about blockchain.”

The move is one of many focused on how the government can best leverage blockchain’s advantages, including another DTA announcement this week that the agency plans to look into how the technology can be used for making social security welfare payments to citizens.

The new plan is focused on payments by Centrelink, reports CCN. The DTA feels that there are 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. DTA Chief executive Randall Brugeaud stated:

“Our plan is to look for use cases across the Commonwealth with an initial focus on the welfare payment delivery system, then working with our digital service standard, we’ll conduct user research a view of having a prototype by the end of the next financial years.”

Brugeaud added that the potential of blockchain to securely record transactions would be investigated, drawing on the experience of other public and private sector organizations.

As blockchain is increasingly being developed and employed in new sectors across the country, cryptocurrency is also increasing in popularity. While Australia may not be the largest market for Bitcoin and other digital currencies, it is one that is quickly growing. It is currently ranked the 13th in the world for Bitcoin trading volume.

 

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Small Business Boost from EU Blockchain Committee

Members of a European Parliament committee voted on Wednesday to recommend that small businesses look into blockchain payment systems. The positive news was reported recently by one of the leading crypto news sites.

The EU Commission’s Industry, Research, and Energy Committee specifically suggested non-monetary uses for the technology, specifying data controls and supply chain management in order for a more cost-effective way of making payments in order to democratize the energy market. The commission believes that small businesses could benefit from integrating blockchain technology into small business.

Eval Kaili, committee member believes that DLT is “cutting edge” commenting:

“Today the Industry Committee voted univocally in favor of a forward-looking technology that we expect to change the quality of our life, empower SMEs and improve business models in most industrial sectors … and we aspire to make EU the global leader in the era of the Fourth Industrial Revolution.”

The proposed model covers blockchain use in many areas:

Monitoring

Monitoring the origin of goods, offering greater certainty that, e.g., diamonds are ethically sourced, clothes are not made in sweatshops and a bottle of champagne comes from Champagne,

Democratizing

Enabling households that produce energy to exchange and consume it without the need to pay an intermediary agency, and

Recording

Creating records such as land registries, birth certificates, and business licenses, with less dependence upon lawyers, notaries and government officials.

“Citizens could use blockchains to gain full control of their own data and decide what to share, and small firms and innovative start-ups could use them to cut intermediation costs and ensure that transactions are executed efficiently the committee,” a European Sting report says.

The press release suggests that the committee called on the  EU commission to start a regulatory process for various blockchain scenarios which could be deemed “ innovation-friendly and technology neutral,” and request more funding for projects from the EU.

Kaili attended the NY Blockchain Week Consensus Conference last week and commented there that the EU was in favor of Blockchain, but that education was a major issue regarding the new technology, joking that, “we don’t have too many scientists within the European Parliament”

She calls for “harmonization, sandboxes, and regulation,” over the next few years to progress the technology towards mainstream recognition.

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Blockchain to Drive Companies in Next Industrial Revolution, Says US Mutual Fund VP

Federated Investors vice president and portfolio manager Steve Chivarone, ranked blockchain in the top five key technologies that will drive what he called “this next industrial revolution” in an interview with CHBC on 11 May.

Chivarone went on to comment that blockchain would be an “economic growth driver” along with automation robotics, AI and the Internet of Things (IoT), according to Cointelegraph. The Pittsburg-based company VP continued:

“When you think about it from an enterprise perspective, it has the ability to replace reconciliation, which is expensive and requires back-office and time and paperwork with more instantaneous verification […] that will allow cost to be cut and that savings [sic] to be passed along.”

He suggested that banks such as Bank of America investing heavily in blockchain and companies like Nvidia and Intel producing computer chips used in mining illustrated how investors could “play” the potential of the new technology.

DLT is becoming more attractive to big companies and banking institutions with what Fortune describes as “laudable goals — speed, lower cost, security, fewer errors, and the elimination of central points of attack and failure. These models don’t necessarily involve a cryptocurrency for payments”.  Fortune argues that it is the “Bitcoin model” that could have the most impact:

“Each blockchain, like the one that uses Bitcoin, is distributed: it runs on computers by volunteers around the world; there is no central database to hack. The blockchain is public: anyone can view it at any time because it resides on the network, not within a single institution charged with auditing transactions and keeping records.”

On 8 May, two United States House Subcommittees concluded that blockchain technology could be used in diverse areas, from US Customs and Border Protection to cyber-security, despite its current lack of industry-wide standards.

 

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Ethereum Co-Founder Launches Blockchain Coffee Project in Ethiopia

Ethereum co-founder and Cardano chief Charles Hoskinson has launched a new project working with Ethiopia’s ministry of science and technology, according to CCN.

The project, according to the memorandum of understanding, is to study how blockchain technology can be applied to solving the problems attached to the coffee industry, such as land registry and supply chain fraud.

Coffee is important to the economy of Ethiopia; around 60% of foreign income comes from coffee, with an estimated 15 million of the population relying on some aspect of coffee production for their livelihood. In 2006, coffee exports brought in USD 350 million, equivalent to 34% of that year’s total exports. Ethiopia is currently responsible for about 3% of global production.

John O’Connor, director of African Operations, sees education as a major focus for the company as it moves into such projects commenting, “The arrangement tasks Cardano with exploring ways that the African nation can apply the startup’s blockchain technology to its agri-tech sector.”

Hoskinson plans not only to share his ideas but also teach developers how to use Cardano’s blockchain technology on their own. Recently at a speech to the London School of Economics, he spoke of more broader DLT development across Africa. Current problems such as landowners being cleared from their land due to supposed poor record keeping could be addressed by the new technology. Countries such as Kenya, Ghana, and Rwanda are all currently involved in programmes of their own.

Bitcoin Africa.io reports that companies Moyee and Bext360 have partnered with a washing station in the Jimma region of Oromia where farmers gather to sell their crop. Now as the coffee cherries go through the supply chain, farmers are assigned crypto tokens that show the complete value added, from bean to barista. The blockchain-based platform, FairChain, will record everything from payments to roasting to freighting to pricing. Moyee will pay farmers a 20% premium which is meant to be a good start towards giving them a better wage.

According to the Agricultural Growth Program, Ethiopia has announced the launch of a national traceability system known as eATTS, enabled by IBM. The system will start by piloting coffee in the current harvest season and will be expected to increase Ethiopian coffee sales worldwide

 

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Switzerland Plans to Become Blockchain Nation

Out of the world’s six biggest initial coin offerings (ICOs) last year, four took place in Switzerland, according to Swiss financial watchdog, Swiss Financial Market Supervisory Authority (FINMA).

Along with Gibraltar and Malta, Switzerland is fast becoming a global hub for blockchain and cryptocurrencies, with investors from all over the world moving there. Towns such as Zug, a small town of 120,000 people just a short drive from Zurich, and the southern Italian-speaking Swiss town of Chiasso, are beginning to make a name for themselves in the global crypto space.

Zug has long been a global economic center, attracting large investment firms, pharmaceutical companies, commodity trading groups and thousands of other companies all benefiting from a favorable corporate tax rate of 14.6%.

Lately, 200 blockchain companies have joined the incumbents in Zug, now being tagged as ‘Crypto Valley‘, so named after the association set up there in 2013 to attract startups to cryptocurrency. Since 2016, the town has even been accepting Bitcoin payments for social services and was the first town to install crypto ATMs.

One reason for Switzerland’s success as a center for blockchain and fintech, according to Swiss law firm MME, is the country’s openness to new business concepts and innovation. Marin Eckert MME partner said, “Swiss regulators are among the few that really have a deep understanding of the technology and how it works.”

Johann Schneider-Ammann, Switzerland’s economics minister, said that the landlocked country should strive to “become the crypto-nation” earlier this year, calling cryptocurrencies part of the “fourth industrial revolution”, yet the government, rather than fully embracing cryptocurrency, seems more focused on promoting blockchain technology enterprises.

Despite Switzerland’s tradition of banking secrecy which dates back to the Middle Ages, distributed ledger technology (DLT) has been of little interest to major banking players in the Alpine country. Some smaller banks have introduced cryptocurrency asset management schemes over the past few years but the larger banks remain skeptical.

Andrea Maechler, governing board member of the Swiss National Bank (SNB), suggested that blockchain technology had “potential”, but cryptocurrencies still weren’t “comparable with money”.

The Swiss Blockchain Taskforce clearly sees the potential of DLT. Based in Crypto Valley, the organization has released a white paper drawn up by some 50 industry leaders, scientists and political representatives with recommendations for the future regulations and strengthening of the industry.

The Swiss Federal Council created a regulatory sandbox last year to allow startups to experiment with fintech developments such as blockchain and to attract more such organizations to Switzerland.

 

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Gibraltar Sees Itself as Blockchain Trendsetter

The Gibraltar Stock Exchange has announced that it has bold plans for blockchain technology, encouraging its subsidiary, Gibraltar Blockchain Exchange (GBX), to regulate for investor safety.

According to GBX, it has already enacted Distributed Ledger Technology (DLT) legislation to provide a worldwide jurisdiction for crypto companies, suggesting it wants to lead the world in technology regulation. The new legislation states that any firm in Gibraltar using DLT to store and transmit value is regulated in the country by default.

Gibraltar aims to lure new and existing fintech companies to its shores, following in the footsteps of other European countries such as Malta and Switzerland, both of which have seen the arrival of major cryptocurrency players Binance and Bitmain in recent months. The 2nd Gibraltar International FinTech Forum held last month, with another ‘Gibfin’ forum to follow in September 2018, demonstrate the country’s serious intent when it comes to encouraging fintech companies to do business there.

GBX wants to become the first regulated and licensed token sale platform and digital asset exchange operated by an EU-regulated stock exchange. Similar moves are being made in Germany through a crypto app launched by a subsidiary of the German Boerse Stuttgart. Such moves by both European countries raise the profile of cryptocurrencies and blockchain technologies and gives them enhanced credibility.

In May 2017, the government of Gibraltar set out nine principles for the regulation of blockchain services, which will cover such things as ensuring companies have the technology in place to support their business proposals or keep client assets safe. The GBX website claims it wants to turn the country into a “Crypto Harbour”.

The British overseas territory of Gibraltar has long been friendly to cryptocurrency and blockchain-based initiatives. The Gibraltar Stock Exchange hosted the launch of Europe’s first regulated Bitcoin product in mid-2016 and the territory’s financial watchdog launched a new license for fintech companies using blockchain last December.

 

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Swiss National Bank Remains Cool Towards Crypto

In a speech in Zurich last week, Andrea Maechler, governing board member of the Swiss National Bank (SNB), suggested that blockchain technology had “potential”, but cryptocurrencies still weren’t “comparable with money”.

In recent years, Swiss banks have been reluctant to have anything to do with cryptocurrency firms. Despite Switzerland’s tradition of banking secrecy which dates back to the Middle Ages, a new banking “secrecy”, distributed ledger technology (DLT), has been of little interest to major banking players in the Alpine country.  Some smaller banks have introduced cryptocurrency asset management schemes over the past few years but the larger banks remain skeptical.

Outside of the banking sector, the Swiss have warmed to digital currencies. Dozens of startups have used blockchain technology to raise millions of Swiss francs through initial coin offerings. In Zug, 30 kilometres south of Zurich, huge amounts of digital currencies have traded daily since 2013 at Crypto Valley.  The organization is self-described as being an “independent, government-supported organization… dedicated to developing and executing a community-driven program targeted at establishing and growing our ecosystem”.

Maechler’s address highlighted the fact that SNB was still concerned about the “risks” behind “new innovations”. Referring to blockchain technology, she indicated that banking security was particularly important in the current Swiss banking system although the bank welcomed “innovations which advance efficiency”.

The co-existence of two systems within the Swiss banking system was another area of concern. Meaechler suggested that “should DLT take hold in securities settlement, the question would then arise as to how DLT-based securities systems and conventional central bank systems can coexist”. She argued that it would be the market that would decide “which technologies and solutions would prevail”.

Her final comments would offer little solace to those in Switzerland’s cryptocurrency environment looking for more cooperation between crypto exchanges and banking sectors. Viewing any synergy as a matter of “debate”, she suggested: “Digital central bank money for the general public is not necessary to ensure an efficient system for cashless payments. It would deliver few advantages but would give rise to incalculable risks with regard to financial stability.”

 

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