NetBet recently announced that it has become the first U.K. licensed online gambling operator to accept bitcoin payments to its U.K. customers.
As the U.K.’s largest leading betting operator, NetBet has decided to start accepting the digital currency, bitcoin, in an attempt to reach the expanding customer base that uses bitcoin in the U.K., reports gambling news site, Calvin Ayre.
In August, the U.K. Gambling Commission (UKGC) announced that it sees digital currencies as an equivalent to cash that licensees could accept as payment. In a new version of its License Conditions and Codes of Practice (LCCP), it included the recent changes regarding payment-related issues.
It is hoped that this will help boost awareness and increase adoption for digital currencies such as bitcoin across the U.K.
As the use of digital currencies is still relatively new in the gambling industry, bitcoin payment service provider, BitPay, has revealed that it helped NetBet to ensure that they met the UKGC’s regulatory requirements.
According to a BitPay blog, NetBet customers will now have the ability to fill up their online account with bitcoin in a matter of seconds.
This bitcoin checkout option will allow more NetBet users to get back to playing and placing bets with the peace of mind that their transactions won’t expose them to the risk of online payment fraud.
In a move that suggests the changing of the times, the Isle of Man’s Gambling Supervision Commission (GSC) and Treasury approved changes to the island’s gambling regulation earlier this year.
Now digital currencies such as bitcoin can be accepted as a cash equivalent, highlighting the U.K.’s position that it sees bitcoin as a form of cash that can be accepted on gambling sites.
However, while the U.K. may be leading the way with the acceptance of bitcoin on gambling sites, other countries are not as forward thinking.
Even though Malta is keen to embrace technological advances such as bitcoin and blockchain, Joseph Cuschieri, the chairperson of the Malta Gaming Authority is reported to have cautioned against bitcoin’s use as he still sees it as a risk.
Yet, with the growth of bitcoin continuing to expand in the U.K. it isn’t surprising that the gambling industry is turning its attention to the digital currency.
If it opens the door to a user base that gives consumers the peace of mind against online fraud, then accepting bitcoin as a payment option seems to be the right choice.
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The Abu Dhabi Securities Exchange (ADX), has developed an e-voting platform based on blockchain technology, an announcement yesterday revealed.
The e-voting service will enable shareholders of listed companies on the exchange to vote during annual general meetings. The aim is to facilitate a simpler and more effective voting process, in what is traditionally a cumbersome and manual procedure. Presumably, each transaction on the ADX-developed blockchain platform will be counted as a vote.
Blockchain is considered a decentralized and safe network… fast, and efficient for all network partners as well as for those who participate in the workflow process.
In a nod to transparency, any shareholder participating and/or voting during annual general meetings will also be able to count the number of votes submitted, ensuring that no vote has been tampered with.
In statements, Rashed Al Blooshi, chief executive of ADX referenced the wider directive from the government of Dubai to embrace blockchain technology. The executive said:
Accordingly, adopting Blockchain technology in our projects comes in alignment with the digital transformation of Abu Dhabi’s government services as we constantly strive to introduce new ways that ease the process of doing business in the Emirate.
The platform is expected to bring higher attendance and interaction during AGM meetings, with communication channels established through an internet connection from any part of the world. Furthermore, shareholders will be able to access reports and statements relevant to the meetings. Relevant data made available would include information for the candidates of the Board or information relaying other decisions or any significant information to shareholders over their smartphones.
The initiative is seen as the first of its kind for the MENA (Middle East and North Africa) region. Al Blooshi added:
We are proud to be the first stock market that employs Blockchain technology in the services provided to stakeholders.
Blockchain technology has already been tapped by securities exchanges for a similar purpose in the past. In Estonia, a country already notable e-Residency program, the Tallinn Stock Exchange has also enabled blockchain e-voting for shareholders of companies listed on the capital’s stock exchange.
More specifically, the Estonian e-Residency program’s platform will be used for the endeavor, offering shareholders with the blockchain voting system. The program was launched in early 2016, in partnership with US stock exchange Nasdaq.
At the time, e-Residency program director Kasper Korjus stated:
When we started the e-Residency project a year ago, we knew we would change the way people think about nations and citizenship. Now, via our e-voting collaboration with Nasdaq, we will be revolutionizing corporate governance.
Meanwhile, the government of Dubai is arguably the first major administrator of its kind to implement a strategy determined to leverage blockchain technology for a number of applications.
Dubai, capital of Abu Dhabi, the largest of the UAE’s seven emirates.
Earlier this year, the Dubai government announced the ‘Global Blockchain Council’, positioning itself as a center for Fintech. The announcement wasn’t merely grandstanding either, as the Council quickly set about drawing plans for initiatives in 2016, within a month of its founding.
Sure enough and earlier this month, the Dubai government revealed its mandate to transfer all of its documents onto a blockchain in the coming years. Furthermore, the government is also positioning itself to execute all of its transactions on a blockchain by 2020.
The ADX is set to show a working prototype of the technology at the Abu Dhabi Government platform during this week’s GITEX Tech Week, taking place at the Dubai World Trade Centre until October 20.
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Billionaire tech investor Peter Thiel, whose Founder’s Fund invested in Bitcoin payment’s startup BitPay, recently gave $1.25 million to Republican candidate for President, Donald Trump, “through a combination of super PAC donations and funds given directly to the campaign.”
As the New Yorker Magazine writes,
Thiel’s willingness to show some seven-figure support for Trump at this late stage might signal that Thiel wants to stay in Trump’s circle even after the polls close and the votes are tallied. Widespread speculation holds that Trump (possibly with the help of his son-in-law Jared Kushner and Roger Ailes) is looking into launching a cable channel following the election.
The respected billionaire technologist, who attends meetings featuring main players in politics and business, has long been a proponent of right-wing politics.
An early investor in Facebook and PayPal, Thiel’s Founder’s Fund led a capital raise of $2 million into BitPay in 2013. A C-Level executive at BitPay later sent a similar amount to a hacker who was phishing for the bitcoins. Thiel also helped found Palantir Technologies, which builds software that connects data, technologies, humans and environments.
Thiel has served as a member of the steering committee for Bilderberg. Founders Fund has invested in the Bitcoin space for three years.
BitPay founder CEO at the time, Tony Gallippi, said of the Founder’s Fund raising: “We raised seed funding in January and February and still had some left so we weren’t looking for money. They approached us, which was a nice surprise because we’d heard that they’d got as far as due diligence with another company in this space. We were really impressed with their experience and energy.” The deal’s terms went undisclosed.
As Thiel spoke at the Thiel Foundation Under 20 Summit in 2013, he said that he’s noted modern monetary system was coming to an end and encrypted money “would change the world.”
“I do think bitcoin is the first one of these that has the potential to do something like that,” he concluded. “It is worth thinking about money as the bubble that never ends. There is this sort of potential that bitcoin could become this new phenomenon.”
He added: “The cautionary note I’d put on it is … that, as far as I can tell right now, it’s being used for speculation and illegal activity – illegal payments, and therefore it is possible that it will be scrutinized in an increasingly difficult way in the years ahead.”
Recent polls show Clinton only leads Trump by 8 points.
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The chief executive of Swiss-based Mercuria, one of the world’s largest commodity traders, sees blockchain adoption among the oil and gas industry within 2017.
The head of Swiss-based Mercuria was speaking at the recent Reuters Commodities Summit, where he revealed just how big the commodities industry is on blockchain, a Reuters report revealed.
The industry sees nearly all of its core processes still work on paper and takes several days for transfer of value – presided by a settlement agency – in every step along a trade transaction. Among blockchain technology’s use-cases besides remittance and post-trade in the global finance industry, trade finance in the commodities industry is an obvious use case, with the entire industry in need of an efficient upgrade.
Marco Dunand, chief executive of Mercuria, stated:
I’ve seen sufficient bank presentations to believe the technology is there and it’s solid. And I believe we’re going to see a digital transformation of the oil and gas industry.
As a leading commodity trader Mercuria routinely synchronizes between the physical market of actual oil barrels traded and the paper markets where oil is traded as a commodity in futures, derivatives or options.
Agricultural commodities could particularly benefit from efficient and quick blockchain solutions.
Dunand pointed to the Brent crude market (which fundamentally sets the global benchmark oil price) using blockchain technology regularly in the near future.
“BFOE [Brent, Forties, Ekofisk and Oseberg, four physical crude oils] for instance, is a market that has a limited amount of participants that requires a reasonably solid balance sheet,” Dunand said. “You could see this type fo market going to blockchain payments within the next 12 months.”
We think this could reduce costs, certainly on payments, by 30 percent.
However, Dunand added that a technological revolution will require participants to come together to enforce the transformation, pointing to the physical energy markets slowing down adoption while choosing to stick to traditional methods of operation.
“For blockchain to work, you need sufficient amount of participants to go for it”, Dunand stated, adding, “That is the only element that is slowing down the development of blockchain.”
Blockchain has already seen use cases in commodities trade finance. A recent real-world proof-of-concept endeavor demonstrated a trade finance transaction which saw cheese and butter exported from an Irish agriculture co-operative to a Seychelles-based recipient. In November 2015, Kynetix, a post-trade technology company announced a consortium of 15 commodities industry participants that will seek to develop blockchain solutions for the industry.
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The European Central Bank (ECB) has proposed a directive of the European Parliament and of the Council stating that ‘virtual currencies do not qualify as currencies from a Union perspective,’ and wants digital currencies to be explicitly defined as not legal currencies or money.
In a document titled, Opinion of the European Central Bank [PDF], the ECB is proposing amending Directive (EU) 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing and amending Directive 2009/101/EC.
According to the ECB, the use of digital currencies, such as bitcoin, pose a threat as terrorists and criminal groups are able to transfer money within digital currency networks with a certain level of anonymity.
The ECB believes that as digital currencies aren’t required to be exchanged into legally established currencies they can be utilized as for illegal activities.
Such transactions would not be covered by any of the control measures provided for in the proposal and could provide a means of financing illegal activities.
The ECB has outlined its concerns stating that the Union legislative bodies should not promote the use of digital currencies as they are not legally established as currencies. This is despite the fact that the ECB is open to blockchain technology and recognizes that digital currencies may ‘increase efficiency, reach and choice of payment and transfer methods.’
The ECB is discouraging use of bitcoin over ‘legal currencies’.
However, one of the concerns that the ECB has relates to the volatility linked to digital currencies. According to the ECB, unlike fiat currencies issued by central banks, digital currencies typically have a highly volatility rate; however, a report published last year by the ECB, found that digital currencies didn’t pose an immediate risk to banks.
And yet concern of the ECB is the fact that if the use of digital currencies, such as bitcoin, increase in the future, central banks won’t have control over the supply of money, thus posing a potential risk to price stability.
Thus, while it is appropriate for the Union legislative bodies, consistent with the FATF’s recommendations, to regulate virtual currencies from the anti-money laundering and counter-terrorism financing perspectives, they should not seek in this particular context to promote a wider use of virtual currencies.
This, however, isn’t the first time that the ECB has come down on bitcoin. The ECB has a long history of skepticism with the currency, and has said in the past that bitcoin is not subject to the governing payment systems such as know-your-customer (KYC).
According to the ECB, ‘virtual currencies do not qualify as currencies from a Union perspective.’
As the Euro is the single currency of EU members who have accepted the Euro as their currency, the ECB believes that digital currencies should be classified as not legal currencies.
The ECB states that ‘it would be more accurate to regard them as a means of exchange, rather than as a means of payment.’ However, it doesn’t take into account that digital currencies can be used for other things rather than payments, for example, investments, commodities and securities products.
For now, though, it seems as those the ECB is seeing digital currencies as a negative rather than a positive and are attempting to shed a negative light on the currency despite its wide acceptance in numerous countries.
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The alleged leader of a darknet drug trafficking group has been extradited from Romania to Denver, to face multiple criminal charges. The alleged leader of the drug ring is suspected to be the brains behind the darknet vendor “ItalianMafiaBrussels”.
Filip Lucian Simion, a 23-year-old man was extradited from Romania to Denver, Colorado to face charges of drug trafficking and money laundering, the U.S. Department of Justice announced.
Simion was arrested along with nine other defendants during a joint U.S./European law enforcement operation in the early hours of May 3, 2016. Simultaneous arrests were conducted in Bucharest, Romania and Bruges, Belgium, dismantling the darknet vendor group.
The arrests and extradition followed an investigation that began in July 2013. Investigators ascertained that Darknet vendor “ItalianMafiaBrusselss” (IMB) had used encrypted email and online darknet markets including now-defunct Silk Road and Silk Road 2.0. The drug sold was MDMA or Ecstasy, primarily to customers in the United States and Canada.
The vendor only accepted payments in bitcoin.
Subsequently, the investigation resulted in seizures of several kilograms of the drug, which was allegedly sold to customers in Denver through the mail.
Simion was indicted in May 2016, along with three others, for money laundering and importation of controlled substances. Ecstasy is determined as a Schedule I controlled substance.
Leonardo Cristea, a 25-year-old co-defendant was previously extradited from Romania in July 2016. If convicted, both Simion and Cirstea face a maximum penalty of 20 years in prison.
Meanwhile, the most notable darknet story of them all, Silk Road, still finds legs in the form of an appeal that founder Ross Ulbricht’s lawyers hope to pursue. The much-publicized tale of rags-to-riches wealth that saw a cocktail of technology, drugs, corrupt cops, faked murders and more, is now being adapted for a Hollywood thriller courtesy of popular and acclaimed filmmakers, the Coen brothers.
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blockchain is precisely designed to solve the problem that arises when the sharing economy attempts to expand its system for recording and enforcing who owns what when the thing being owned is granular and fast-moving, a programmer, blockchain expert and widely known economics blogger, has told The Guardian.
Steve Randy Waldman says blockchain is a different way of keeping track of a normative set of information, making the storage of information in multiple copies and distributed across all the nodes of a network instead of in one central location – the county records office, say, or Airbnb’s database.
Uber and Airbnb are two of the few “sharing” startups that have hit it big. They represent the sharing economy which made it possible for smartphones to give consumers seeking new ways to save and workers looking for new ways to earn new ways to transact. They disrupted the slow ownership system under capitalism’s core requirements in a stable property regime. Ownership of real estate is recorded by a county records office; owned cars recorded by a state agency. These involve a lot of paperwork and labor on its own. Enforcing ownership requires more paperwork and labor.
Yet, the high fixed costs of the traditional property regime presents the sharing economy with certain challenges. As a result, sharing companies end up keeping necessary information themselves: a database at Airbnb or Zipcar holds the record of rentals instead of the government. These databases require plenty of labor of their own to build and maintain.
There comes the smart contract which gives blockchain the power to not only record property rights but enforce them. Once deployed, a dozen lines of computer code can fulfill the same role as the county records office, the courts and the police. Waldman explains: You can have “the function of a trusted bureaucracy without the expense of putting together a trusted bureaucracy.” You can also cut out the middleman who extracts a fee for coordinating the transaction: theoretically, your home rental could now involve only the homeowner and the renter, bypassing Airbnb.
Blockchain is viewed as capable of helping to democratize the sharing economy by making it cheaper to create and operate a platform. It could enable what a company such as Uber does to coordinate a transaction be performed by self-executing smart contracts while others could be performed at lower cost by a variety of small competing providers.
This might make it easier for workers to form cooperatives that have the capacity to compete against the VC-backed behemoths that dominate the sharing economy which could result in something resembling the “socialized Uber” proposed by economist Mike Konzcal: a viable worker-owned alternative, run for the benefit of the people who actually perform the work and not for a handful of rich investors.
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The Pentagon plans to use the distributed ledger to provide immutability of secret information. This is the second officially reported case when the technology is considered for military use.
DARPA, the US Department of Defense’s agency responsible for R&D, explores the possibility of using blockchain to protect classified information. According to Quartz, the researchers suggest adopting the technology for keeping track of every access to military databases, especially the ones related to satellites and nuclear weapons. The development of the project is contracted to the company Galois. Its first task will be to carry out a code audition for the security systems using a blockchain developed by Guardtime. For this initial stage, Galois has already received $1.8 mln.
“Whenever weapons are employed … it tends to be a place where data integrity in general is incredibly important. So nuclear command and control, satellite command and control, command and control in general, [information integrity] is very important,” said DARPA programme manager Timothy Bucher.
According to him, "You can build walls higher and higher, but people might still be able to find a way in no matter how well you think you sealed up all the cracks. It’s actually more important to know who has been inside the castle and what they did while inside the walls."
As soon as the agency collects enough information to evaluate the potential of the blockchain to protect military data, it will commence the development of the new security system.
In April this year, DARPA announced their plans to create a “specific decentralized messaging platform built on the framework of an existing blockchain framework.” The current state of that project remains undisclosed.
The DARPA was founded in 1958 in response to the soviet Sputnik launch. One of its earlier projects, ARPANET, is considered to be a predecessor of the Internet.
Author : Lyudmila Brus
Bitcoin blockchain-centric P2P Fintech firm Circle has now added support for bitcoin buying and selling in several European countries beyond the UK.
Six months after bitcoin exchange and services firm Circle saw an electronic money license granted by the British government, the company is pushing on to other countries in Europe.
Users from sixteen countries including the likes of Belgium, France, Germany, Italy and Spain will now be able to link their Euro-based credit and debit cards. Notably, there are no fees for buying bitcoin with debit cards, making Circle stand out in a growing list of global digital currency exchanges extending support to Europe.
Furthermore, 9 out of the 16 countries will enable its users to hold Euros, as well as bitcoin, in their Circle accounts. A complete list of supported countries can be found here.
The feature comes during the days following the European Central Bank pushed for tighter controls on bitcoin across the European Union, urging its members to explicitly state that the cryptocurrency cannot be considered a legal currency, or money.
The European Central Bank isn’t thrilled about Bitcoin.
Earlier this year in April 2016, Circle was granted an electronic money license by Financial Conduct Authority, Britain’s primary financial regulator. The official license was in itself a milestone for the bitcoin industry. With it, US-based Circle enabled US and UK consumers to transmit value in sterling pound or U.S. dollars, over the bitcoin blockchain.
Incidentally, Circle was also the first bitcoin company to receive the state of New York’s first-ever BitLicense, in November 2015. The well-funded Fintech startup continues to advocate for the development of public blockchains over the frenzied rush among the financial industry to develop private, permissioned blockchain solutions.
In an earlier blog, Circle’s co-founders stated:
We’d be thrilled if everyone in the world enjoyed Circle, but people benefit most if Circle is part of an open global network of value exchange with thousands of other software providers, online services, and financial institutions who are connecting to and innovating on public blockchains.
Circle’s global expansion plan received a boost in mid-2016, when the bitcoin startup completed a $60 million round of funding in China.
Two more Indian private banks have started conducting pilot transactions using blockchain technology, days after the country’s leading private sector bank, ICICI, completed its successful blockchain pilot.
Axis Bank Ltd., and Kotak Mahindra Bank Ltd., are two of the latest banks to join the growing number of global financial institutions jumping onto the blockchain bandwagon.
According to Indian publication Livemint, the two banks are experimenting with blockchain-based solutions in different sectors of businesses and industry. Chief among them are applications for cross-border remittance and the trade finance industry.
Kotak Mahindra Bank chief digital officer Deepak Sharma is convinced that blockchain, the technology powering bitcoin, is set to revolutionize the banking industry.
In quotes reported by the publication, Sharma stated:
We are theoretically convinced that blockchain is the way ahead. But we have to establish a practical use of the technology. As of now, the focus is on whether the technology is scalable in the near future.
Last week, leading Indian bank ICICI announced the results of a blockchain pilot executed in partnership with Emirates NBD, Dubai’s largest bank. Two pilot transactions were revealed, one of which was an international trade finance transaction, enabling all parties of the transaction to access data in real-time. The other, was a real-time remittance transaction, with money transferred from an ICICI bank branch in Mumbai, India, to an Emirates NBD branch in Dubai.
Blockchain’s efficiency in enabling near real-time cross-border remittance with relatively low or insignificant fees has its most wide-spread example in the increasing number of bitcoin transactions by adopters around the world.
Indeed, Sharma also confirmed that the bank is working with other international banks and a technology provider, to test remittance transactions. He added:
Typically, cross-border remittances take two days to settle. Using blockchain, we can reduce this time to a few minutes, which will save us a lot of time.
The other bank conducing blockchain pilots, Axis, envisions a future wherein blockchain technology could facilitate the retail consumer banking sector. Not before seeing the light of day in corporate banking, however. Amit Sethi, chief information officer at Axis bank said:
While we believe there might be some use of blockchain technology in the retail businesses, we think that it will first come out in corporation banking operations.
Without revealing any timeframes, Sethi added the bank will develop and provide customer solutions “soon.”
While Indian regulators have warned against the use of bitcoin in the past, recent developments in the Fintech ecosystem sees a thriving population of everyday adopters. Unocoin, one of the bigger bitcoin exchanges in the country recently raised a record $1.5 million in funding as it looks to expand. The funding round comes during the weeks leading up to India’s biggest shopping binge for the festival of Diwali. E-commerce websites offering significant discounts for online shoppers could encourage more shoppers to pay in bitcoin.
Furthermore, Zebpay, a bitcoin wallet service provider is reportedly looking to raise $5 million in funding by the end of 2016.
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Teaming up with Tsinghua University in Beijing, it is hoped that by digitally tracking the movement of pork in China on bitcoin’s underlying distributed ledger, it will prevent food disasters such as those that have been reported in China.
According to Forbes, in 2008, a toxic mixture of milk and infant formula combined with melamine, killed six children, put thousands of others in hospital and sickened much more.
However, in a bid to improve its food safety in the country, the Chinese government looked at its food safety regulations last year in an attempt to prevent any further mishaps.
According to Frank Yiannas, vice president of food safety at Walmart, who spoke to Fortune, tracking food can help stop food disasters.
If you could track and pinpoint where that came from faster, you could alleviate all that and ensure consumer confidence continues.
While it may look like an unlikely project by Walmart it seems that by teaming up with IBM they are set on providing consumers with a transparent record as to where the food comes from whether that’s in the U.S. or China.
The company is planning on using the Linux Foundation-run Hyperledger Project. It will use a private database blockchain, co-developed by IBM, which will provide consumers with a record that details how the meat is transported from producers to processors to distributors to the shops, with the end result being the consumer.
As Yiannas states, consumers are more interested in how a product originates and where it goes before it reaches them.
If you shine a light on the food system, that leads to transparency.
Of course, this isn’t the first time the retail giant has turned its attention to this relatively new technology.
Earlier in June, a petition was sent out asking people to sign to get Walmart to start accepting the digital currency bitcoin. In July, Walmart along with the likes of McDonald’s also started integrating bitcoin into reward programs.
IBM itself has not been afraid of jumping into the blockchain technology with a recent report stating that the company had invested $200 million USD in the Watson Internet of Things (IoT) global headquarters in Munich, Germany.
With the two companies invested in the digital world, it is hoped that they will present the answer that many consumers are seeking when it comes to tracking food digitally.
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Chris Larsen, chief executive of prominent Fintech startup Ripple has, in the lead-in to the upcoming U.S. presidential elections, called for the next president to appoint a Fintech advisor.
The polling stations for the upcoming U.S. elections are now weeks away from opening to appoint the next U.S. president. Until now, there has been little or no talk of Fintech innovation as policy talk and that isn’t likely to change in the coming weeks.
The U.S. Presidential Seal
With this in mind, Ripple executive Chris Larsen, the CEO of a startup that is arguably among the most prominent and certainly well-funded Fintech firms has called for the next president to appoint a specialist Fintech advisor.
Larsen drew parallels between the ever-increasing foray of financial institutions and even central banks researching and developing blockchain and cryptocurrency solutions, to the days in the early 90s when the internet gained prominence.
Underlining the coming years to herald the formation of a new internet, he sees financial technology as its foundation. Larsen said:
Innovators are building the Internet of Value: a system that moves money as seamlessly as information.
Larsen points to proactive strides taken in the 90s when cooperation between Silicon Valley and Washington helped drive adoption of technology and the internet. The regulation and framework created for electronic commerce from the White House is the model that is now adopted globally, Larsen opined. These early moves helped the U.S. settle upon the driver’s seat in “developing the internet and [the] resulting digital economy”, Larsen added.
However, the executive – while obviously enthused for the wave of Fintech disruption – argued that the United States does not hold that early adopter advantage this time around.
These are “crucial nascent stages” in the Fintech era, the executive says, days that are already fraught with “significant disadvantages” from an American perspective. He points to the core U.S. establishments of finance, regulation and technology seeing “key philosophical differences”. Even geographical distances prove a distinct disadvantage, argued Larsen, pointing to the competition.
Other global fintech hubs like London and Singapore enjoy physical and ideological proximity, and can consequently concentrate their efforts more easily than we can. This race is theirs to win.
Larsen’s pitch for a Fintech advisor is to ultimately make a concentrated effort in easing regulation and encouraging startups to usher in blockchain infrastructure that even traditional banking executives see as transformative.
In today’s information era bought on by the Internet, the United States government has created and appointed industry experts for specialized positions.
The White House
For instance, the E-Government Act of 2002 saw the creation of the Federal Chief Information Office of the United States, a position that had the appointed CIO oversee federal technology spending, federal IT policy and strategic planning across Federal government. A notable directive issued by the U.S. CIO in recent times is the mandate for all publicly accessible Federal websites and web services to switch over to standard-security HTTPS protocol.
Cybersecurity is firmly on the agenda for both candidates and has even proven to be a contentious talking point in a time when mega-breaches see personal details of millions of everyday citizens stolen and leaked on the internet, facilitating crimes like identity theft. Inevitably, a year after the infamous OPM breach that saw millions of records of federal employees’ personal data compromised, the White House appointed its first ever Chief Information Security Officer (CISO) last month in September.
It has to be reiterated that Fintech and the subject of blockchain innovation have not been on the agenda of the two candidates for the U.S. presidency. Only Hillary Clinton’s campaign has fleetingly addressed blockchain technology applications, in a public position on technological innovation from June 2016.
Still, it might only be a matter of time before Larsen’s call for a specialist Fintech advisor comes true.
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China’s Ministry of Industry and Information Technology (MIIT) has published the country’s first official guiding document on blockchain technology and its applications in the country.
China, which sees a significant majority of the world’s bitcoin trading, is a notable example of a major government’s foray into understanding cryptocurrencies like bitcoin, and its underlying technology, the blockchain. Just a month ago in September, the Chinese government was revealed to be working on developing and eventually using blockchain-based solutions for social security payments.
Talking about the innovation’s potential to enhance payment channels for pensions and benefits to its citizens, Wang Zohongmin, vice-chairman of China’s National Council for Social Security Fund stated:
There’s no doubt that blockchain technology will be used in the social security system because of its valuable applications in the investment and management of social security funds.
Titled “the Blockchain Technology and Application Development Whitepaper”, the white paper [PDF] began as a draft, going through an editing process since August 2016, Chinese financial publication EastMoney revealed. Multiple companies and institutions took part in the development of the whitepaper, including public and private institutions.
Two months in, the Whitepaper was published on October 18. The paper was overseen, guided and produced by MIIT, the National Standardization Committee, the Chinese Blockchain Technology and Industrial Development Forum.
The Whitepaper details the potential applications of blockchain technology, with a focus on finance. A sampling of blockchain application scenarios, as detailed by the Whitepaper, includes supply-chain management, analyzing finance, entertainment, smart manufacturing, social welfare, education and employment.
Participating institutions include the likes of Alibaba’s Ant Finance, WeBank, the Ping’an Insurance Group (incidentally also an R3 member) and the Chinese Digital Technology Standardization Research Institution, among several others.
The Whitepaper points to the finance sector as the first frontier ripe for blockchain implementation. While the payments sector is an obvious use case – considering blockchain’s most celebrated use-case bitcoin’s continued global growth and adoption – the Whitepaper also lays out other applications for blockchain in the financial industry. This includes areas of asset management, securities, clearing and settlement and user Identity management.
The Finance Industry, Blockchain’s biggest target.
For instance, the asset management space sees a plethora of custodians invested via stock equities, vouchers, bonds and other financial instruments. Blockchain can fundamentally uproot the high costs and risks that routinely plague the space, with an integrated distributed ledger allowing participants to transact directly onchain.
Blockchain smart-contracts would enhance the securities sector with increased efficiency, the Whitepaper explains, pointing to financial instruments such as repos, swaps and syndicated loans – all of which can be administered over a ledger. Automatic contract implementation and a preset rules will further streamline the process.
Clearing & Settlement is described as a significant sector for a blockchain breakthrough. Varied regulatory frameworks and infrastructures, manual vetting processes and different business practices make for the traditional and current settlement industry. Pointing to such characteristics as both expensive and riddled with a good chance of failure, the Whitepaper points to Blockchain technology’s core feature – the realization of value transfer, instantaneously, without the need for a third party.
The Whitepaper points to the glaring lack of global standards at a time when seemingly every sector of the financial industry and even other prominent spaces like healthcare, national defense, the media industry, among others, are in a collective sprint to develop and harness blockchain solutions.
The government’s Whitepaper sees standardization as a necessity for all technologies. While this is obvious for various reasons including interoperability and efficiency, while reduced costs over common protocols, the Chinese government blockchain standardization as crucial for government policies and regulation.
Laying out the path that it sees will lead to standardization, the Whitepaper explains the standard should be seen in the following categories:
The steps toward implementing the above standards? The Whitepaper adds:
Notably, the Chinese government revealed its intent to proceed with the timeline, with the last step of ‘System Improvement’ to commence no later than October 2017 – a year from now.
A notable effort to develop and enforce blockchain standards, globally, sees Australia in the driver’s seat after the International Standards Organization (ISO) – widely regarded as the world’s foremost standards authority – appointed Australia to lead an international technical committee to build a unified approach for standards among both private and public ledgers, smart contracts and more.
The Whitepaper further identified other sectors as major cases for blockchain disruption. In some of these cases, the technology could even save entire industries, fundamentally. They pin-pointed sectors according to the official Chinese release includes supply chain logistics , the charity sector that could see (or do with) transparency and IP protection in the entertainment and arts industry among others.
The Whitepaper also sought for friendly policies to encourage blockchain development, which it says will support key technological research, building platforms for public services and more.
Ultimately, the Whitepaper underlines the enthusiasm and interest surrounding blockchain technology in the most populated and among the most important economies in the world.
It was to be expected, however. China’s binge into blockchain and cryptocurrencies is no flash in the pan.
At the very beginning of 2016, China’s Central Bank made the significant announcement that it was looking to develop and issue its own central-bank-controlled digital currency “as soon as possible.” The announcement came after a two-year research effort where the Chinese government engaged experts from the likes of Citibank and Deloitte to look into the frameworks and viability of issuing a national digital currency.
Images : from Shutterstock
Blockchain technology provides information sharing with high transparency and reliability, without management by a specific trusted organization. Financial trading applications, however, have operational issues related to safely executing trades, such as key management. Document management applications bring issues in creating a system that limits which people are allowed to reference information recorded in the blockchain.
Fujitsu Laboratories of America, Inc. and Fujitsu Laboratories Ltd. have developed blockchain-based technologies to securely handle confidential data among multiple organizations.
Fujitsu Laboratories has developed two technologies: a transaction restriction technology based on pre-established policies that restrict trading, and a document encryption technology that allows only parties holding multiple distributed keys to access information recorded in the distributed ledger.
With transaction restriction technology, operations that prevent the misuse of keys become possible, allowing the safer use of the blockchain.
Encryption over blockchain.
With document encryption technology, it is possible to create a workflow in which documents are acknowledged by collective decision making or among specified organizations, or where they can be restored when keys are lost. The application of these security technologies will allow Fujitsu Laboratories to take blockchain’s application beyond finance to more areas, such as document management, supply chain and logistics.
Blockchain technology offers high reliability and transparency by continually preserving transaction records by multiple computers that verify and record data, making it virtually impossible to alter.
In a blockchain, each user needs a digital key to execute exchanges or transactions. If the key is lost, it is impossible to transfer funds. If a key is stolen, the funds in an account can be stolen.
To enable transparency, it is sometimes necessary to publicize a transaction between organizations, while keeping transaction’s details secret and shared only among the parties involved. The fact that blockchain records are shared with all users presents a challenge in how to protect the confidentiality of information.
Fujitsu Laboratories has created a technology that restricts transactions based on pre-established policies, like restricting users to specific stores when executing transactions. The technology ties policies to keys used in activities such as capital transfers. It ensures that transactions violating policy requirements are not added to the blockchain as a result of verification failures at computers participating in the blockchain. This makes it possible to minimize damage even if a key is stolen.
Because blockchain content is public, the technology is not suited to store documents which contain confidential information.
Fujitsu Laboratories has applied a proprietary sharing-based key management system that documents encryption. Different portions of a key are held by multiple users. Once a certain number of pieces are gathered, a key can be created.
This document encryption technology can control who sees the documents. The confidential portions of the contracts are not visible to ordinary users. The document can only be read when the parties involved, holding portions of the key, work together.
Fujitsu Laboratories has developed such a prototype system on the Hyperledger, an open source blockchain platform.
Fujitsu Laboratories is conducting trials for applying blockchain technology to finance and other areas as a cloud platform that can securely manage confidential information and personal data among organizations. The company aims to commercialize this technology beginning in fiscal 2017.
Images : from Shutterstock and Fujitsu