Off the Blocks | Vol. 46
|Dec 18, 2018||Public post|| 1|
This newsletter is our weekly roundup of some of the significant blockchain news this week. Join thousands of subscribers to get your weekly news to map your blockchain strategies, be aware of regulatory announcements and get an overview of the rapidly changing blockchain landscape.
Number of the Week
Value of DTCC's Trade Information Warehouse (TIW) that is expected to be re-platformed to a custom blockchain in 2019
After months of monitoring and observing the “promising and challenging” potential of distributed ledger technology (DLT), the European Union (EU) is finally making a turn into the blockchain industry. Back in February 2018, the European Commission (EC) launched the EU Blockchain Observatory and Forum, aimed to support European cross-border engagement with the technology and its multiple stakeholders and to unite the economy around blockchain.Since its official launch, the newly established organization — supported by European Parliament — has released three thematic reports: the first one in July, dubbed “Blockchain Innovation in Europe”; the second one in October, “Blockchain and the GDPR”; and the third one in December, “Blockchain for Government and Public Services.”
The second major step was taken in April when 22 countries signed a Declaration that created a European Blockchain Partnership (EBP). During 2018, five more European countries joined the EBP: Greece, Romania, Denmark, Cyprus, and Italy. The partnership’s main focus is on cybersecurity, privacy, energy efficiency and interoperability, all in full compliance with EU law. Another move toward blockchain was made in October when the European Parliament formed a resolution titled “Distributed ledger technologies and blockchains: building trust with disintermediation.” The resolution states that DLT “could potentially affect all sectors of the economy,” but it focuses on several important spheres: finances, health care, transport, education, copyrights, public governance, data protection, and some others.
In some cases building a blockchain purely for the sake of it is the worst thing a company can do. For a bank that has over 300 years of history, like Barclay’s, it is not as simple as just moving current banking process over to the blockchain. According to Julian Wilson, we need to “reconfigure our approach and way of thinking” when building blockchains. We should not be using blockchain‘s as bolt-ons or additions to current business models, but entirely re-imaging our business models built around a suitable blockchain – assuming that a blockchain is the best solution, that is.
The Swiss Federal Council (Bundesrat) has said that existing financial law in the country suits the blockchain industry but needs specific adjustments. Specifically, the report recommends the development of a new and flexible authorization category for blockchain-based financial market infrastructures. It also advocates for better legal clarity for rights holders of digital registers and ensuring that decentralized trading platforms are subject to the Anti-Money Laundering (AML) Act.
Agriculture in Kenya accounts for over 50 percent of the GDP and provides the livelihood for 80 percent of the population. However, those involved in this sector continue to be marginalized by financial institutions, which deem them un-creditworthy. With most of the trading being done informally, data is difficult to collect. However, in Kenya, blockchain has given thousands of farmers an immutable and real-time measure of their creditworthiness. Twiga employs blockchain technology to keep track of the transactions carried out by its clients. Using its data, the clients can also assess their ability to access loans and other financial products. While in most developed countries such data is easy to acquire, the narrative is quite different in Kenya, and Africa as a whole.
AT&T is seeking a patent for a blockchain system that enables users to track “micro-culture transactions” on social networks. Broadly speaking, by deploying the system users could purportedly track “micro-culture transactions,” like tracing current trends at a particular time or place, or behavior of their friends. That ability, per the patent application, “may have enormous value in e-commerce, marketing, and targeted advertising.” The document further states: “The social media history map platforms described herein may take advantage of the immutable and permanent nature of blockchain records to store, and provide access to, data representing online transactions that occur on multiple social media applications.”
United Arab Emirates-based UAE Exchange has partnered with Ripple to launch blockchain-based cross-border remittances to Asia by Q1 2019. Asia was one of the largest recipients of the $613 billion in remittances estimated to have been sent globally in 2017. UAE Exchange’s partnership with Ripple for cross-border payments dates back to February of this year. Lenders in the region who have reportedly joined RippleNet include the National Bank of Ras Al Khaimah RAKB.AD and Kuwait Finance House.
Legal systems have developed multiple property registries and custodial systems to manage information and give buyers, lenders, and invested parties the ability to verify whether a specific deal represents an enforceable obligation. Financial market infrastructure spends tremendous sums to maintain structures that provide assurances of things like chain of custody and title. From a legal perspective, trust has some specific meanings with respect to custody, control, and transactional risk. It can be accurately defined as “reliance on assurance of others to reduce transactional risk.” Blockchains radically shift the economics of providing transactional assurances.
Because blockchain protocols provide an opportunity to digitize governance policies in Asia, and the fact that miners are forming a different kind of incentivized governance policy, an opportunity for public debate among various community sectors in Asia has been created. These debates are a notable characteristic of the blockchain industry in countries such as China, Japanand South Korea. Why would a country like China that has banned crypto transactions go ahead and introduce a government-sponsored crypto coin? As a matter of fact, if the said cryptocurrencies are actually meant to remain banned in China, then there would not have been a need for the introduction of another crypto index.
What do pork and beef producers, food companies, and bankers have in common? Some of them are exploring how a relatively new way of keeping data, called blockchain, can help their businesses and industries. “Blockchain is really just a database,” says Andy Brudtkuhl, director of emerging technology with the National Pork Board. Brudtkuhl is researching the impacts and implications of the technology applied to the food supply chain and specifically, how it can benefit pork producers. Brudtkuhl says that as Walmart creates rules for other food suppliers, pork producers want to be involved in the discussion.
For traceability from pig to pork chop, the biggest challenge is when pigs go to the processing plant, he says, noting that eventually, DNA evidence might be used. Rachel Gabato, products and program manager with New York- and San Francisco-based company Ripe.io says some companies are using sensors that capture data along the food supply chain, which adds more layers of information, starting with the farmer and all the way through harvest, transport, processing and retail. In that way, it’s possible to learn how temperature, for example, affects a product.
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 capabilities so that they can own and control their future. Let's put blockchains to work for your business.
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