Crypto Custody at Banks, Cargo Shipping and Bitcoins at Grocery Stores
Off the Blocks, Vol 51, Jan 22, 2019
|Jan 22, 2019|| 5|
This newsletter is our weekly roundup of some of the significant blockchain news, that provides an overview of the rapidly changing blockchain landscape to help you map your blockchain strategy and be aware of regulatory announcements globally.
A Rapid Shift in Momentum
At their core, Blockchains are enabling a fundamental change to legacy business models. This fact is not lost on C-suite executives in various industries and also partly explain the slow pace of adoption, as they work towards sensible, pragmatic applications that will soon replace their revenue streams. Enterprise wide blockchain adoption needs more than a simple proof of concept - for a successful deployment, the systems have to seamlessly integrate with vendors, suppliers and ecosystem partners. Along the way, companies have to address new rules of governance, regulatory implications and ensure that their workforce skills are appropriately upgraded. For multinational corporations, there are added considerations about taxes, data privacy and security of customer information according to their jurisdictional laws. Executives and organizations need to evolve their thinking around the technology and its applications.
Financial institutions were amongst the first ones to embrace the technology and continue to make steady progress. In 2018 alone, HSBC ran $250B in forex transactions on its blockchain platform. Alongside the incumbents, startups have played a significant role in the creation of alternate business models in this space. Companies like R3 and Ripple have seemingly come out of nowhere to create a place for themselves in the financial ecosystem. These companies are not bound by the constraints of legacy architectures. Built on a “blockchain first” approach they have oriented their business models to take advantage of the unique value proposition of the technology. Closing the loop between the new and the old, NYSE backed Baktt recently announced that it has raised $180M for its digital assets trading platform. Cryptocurrencies, stablecoins and security tokens issued by startups are increasingly enabling new forms of transactions and economic activity for both enterprises and consumers.
On the consumer side, the number of connected consumer devices is set to top 20B by 2023. Not surprisingly then, blockchain adoption in the Internet of Things (IoT) industry more than doubled in the last 12 months. At Proteum, our partners and portfolio companies are beginning to leverage blockchain for IoT applications to automate business interactions through simple, inexpensive and decentralized infrastructure and opening pathways to fundamentally new interactions and transactions. Device to device data sharing can now be precisely controlled with access rights and tracked over a period of time. Eliminating middlemen and data brokers, builds trust and reduces the risk and cost of deployment. Companies built on SaaS models are now experimenting with transaction based models to ensure that customers pay for the value captured in the transaction.
A recent survey from Deloitte found that supply chain, IoT and digital identity are scurrying the most favor amongst executives turning their ships towards blockchain utopia. As mentioned in the report:
The only real mistake organizations can make regarding blockchain right now is to do nothing.
Source: Deloitte’s 2018 Global Blockchain Survey
Now for some significant news form the world this week:
Wyoming Bill Would Clear the Way for Crypto Custody at Banks: Wyoming may soon become the first state in the U.S. to provide clear banking permissions for cryptocurrencies and digital assets. It would also establish “an opt-in framework for banks to provide custodial services for digital asset property as directed custodians,” determine standards for such services, clarify how Wyoming courts might classify digital assets and more.
A lot of companies are setting up as New York trust companies … the [Wyoming proposal] is a much better license than a New York Trust license because it’s [aimed at banks] and it’s in a state that has clarified the legal status of digital assets.
European Blockchain Startup Launches Trading in Tokenized Securities: Blockchain startup Currency.com has launched a trading platform for tokenized securities.the platform would allow investors to directly trade and invest in financial instruments using the cryptocurrencies bitcoin or ethereum, without first converting to fiat. The platform will initially host over 150 tokenized securities, tracking the underlying market price of financial instruments such as equity and commodities, it said, while over 10,000 similar offerings could be available in the future.
To offer these capabilities, Currency.com leverages the technology of Capital.com, its sister platform regulated by the FCA [U.K. Financial Conduct Authority] and CySEC [Cyprus Securities and Exchange Commission], to offer users access to a tokenized version of a contract for exchange of a specific equity, commodity or index,
India’s Biggest Conglomerates Explore Blockchain for B2B Payments: Despite the traditionally hostile stance of the Reserve Bank of India on cryptocurrency exchange activities and its recent announcement that it will not be launching the mooted “Digital Rupee,” cryptocurrencies still appear to have a future in India. In the light of revelations that a lack of proper record keeping contributed to the IL&FS takeover, more large businesses are apparently willing to explore alternatives which will ensure that all financial records and contracts are properly documented. Some of the big names reportedly making such moves include Hindustan Unilever, ABG Shipyard, HDFC Bank, and Reliance Industries.
Cargo Shipping Firm Zim Opens Blockchain Platform: Following a successful pilot of its blockchain-powered electronic bills of landing platform that lasted for over a year, the shipping firm has claimed that blockchain can not only replace the currently existing paper-based processes, but also improve the workflow conducted via email, fax, and other channels. Two recent transactions on the platform were successfully conducted in less than two hours each, as opposed to multiple days or weeks that the process usually takes, with eB/Ls being delivered via the blockchain-based system. As part of Zim’s new initiative, blockchain-based trades will be opened up to all customers, with a focus on Asian, South African, North American, and Mediterranean countries during the first quarter.
Securitize To Join IBM's Blockchain Accelerator: Securitize, a compliance platform and protocol for digitizing securities on the blockchain, has revealed that it's one of 10 companies to join the IBM Blockchain Accelerator program.
The primary issues with issuing corporate debt are the high-costs, inefficient processes and the multiple actors that participate in the deal execution part. Integrating blockchain technology into the whole corporate debt process will help enable greater transparency, audibility, efficiency, and eliminate intermediaries that don't need to be there.
The Final Word | Cryptocurrency at Your Grocery Store
Coinstar, the maker of kiosks that turn loose change into cash and gift cards, has partnered with cryptocurrency ATM startup Coinme to let users buy bitcoin. The Seattle-based companies said bitcoin is available for purchase at select Coinstar kiosks in Safeway and Albertsons stores in California, Texas and Washington. As part of the partnership, Coinstar invested an undisclosed sum in Coinme.
Our customers are leveraging bitcoin as a medium of exchange for remittances, a diversified store of value for their portfolio, or simply as a gift for that ‘crypto-curious’ family member.
Proteum is a global blockchain advisory firm that works with public, private and start-up companies to help them transition into the world of blockchains and decentralized applications. We help companies strategically build their ecosystem and unique capabilities so that they can own and control their future. Let's put blockchains to work for your business.