Off the Blocks | Vol 55, Feb 19, 2019
|Feb 19||Public post|| 2|
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. Get your friends to Subscribe Here.
JP Morgan and the Digitization of Fiat Money
Last week, JP Morgan announced that it is launching JPM Coin, its own “stable coin”, as it aims to creates a market for digitization of fiat money. To be clear, this is not JP Morgan’s first ambush with blockchain enabled technology. The firm was one of the pioneers in fintech applications, creating Quorum, a forked version of the Ethereum blockchain suitable for enterprises and financial institutions. The JPM Coin is simply a progression of that thought process that aims to deliver on the two fold promise:
Transaction level privacy; and
Network wide transparency
These are welcome traits for enterprises looking for minimal disruption as they adapt to an environment of digital, immutable, verifiable systems of trust that align the interests of their suppliers, vendors, partners, employees etc. In the ephemeral world of blockchain and crypto upstarts, Quorum, with or without the JPM Coin is a more mature platform.
This creates opportunities to start thinking about fintech solutions that can now exist outside of the traditional core banking software and network technology. Admittedly, a full conversion of the core to blockchain will be complex and probably take years, but services such as payments that take days to settle are now closer to being settled in a few minutes.
The impact of moving funds across borders in a rapid, instantaneous way is a big deal. They're not the only one that can do it, but they move a lot of money.
- Dayna Ford, senior director and digital payments analyst at Gartner
According to a recent Bloomberg report, most large institutions have so far steered clear of the 10-year-old, $120 billion industry because it’s largely unregulated and cryptocurrencies have been used to finance illicit trade. However, there are visible signs of change. Cambridge Associates, a firm that advises institutions managing $300+ billion, has started to advise them about crypto exposure. For those prepared to take the plunge, Cambridge recommends:
[spending] “a considerable amount of time learning about the space, including surveying the different ways of investing, from illiquid venture capital funds to buying tokens on an exchange”
Entrepreneurs and CXOs will recognize this as a moment that gave a much needed credibility boost to the adoption of blockchain and provide stiff competition to legacy tech and business models in every industry very quickly.
Image Source: JP Morgan
Now for some significant news form the world this week:
BBVA Issues $40 Million Green Bond Based on Blockchain Platform Spain’s second largest bank, Banco Bilbao Vizcaya Argentaria (BBVA), has announced the launch of the first blockchain-backed platform for structured green bonds. BBVA has closed the deal with Spanish insurance house Mapfre, which has invested €35 million (approximately $40 million) to finance sustainable products. Accordingly, BBVA has issued the first structured green bond using blockchain technology to negotiate the terms and conditions. [… Cointelegraph]
Using DLT — distributed ledger technology — for this transaction allowed us to simplify the processes and streamline the negotiation time frames.
Apple Helps Draft Blockchain Rules for Responsible Mining Of the million blockchain-related stories filed over the past few years, relatively few have mentioned Apple, as the company has barely addressed the topic despite plenty of investor speculation. But a new Apple SEC filing today will be of at least mild interest to crypto fans, as the company’s otherwise dry Conflict Minerals Report notes that it has been working on blockchain guidelines for the Responsible Business Alliance’s Responsible Minerals Initiative (RMI). The RMI has over 350 member companies and associations, though Apple’s report notes that it had leading roles last year: It chaired the Alliance and served on the RMI steering committee during 2018. [… Venturebeat]
Pension funds back Blockchain VC Fund Two separate pension funds that collectively manage $5.1 billion in assets for the state’s police force and other employees have joined a $40 million investment in the Morgan Creek Blockchain Opportunities Fund, which in addition to backing some of the best-known startups in the space, plans to invest in cryptocurrency. Already, a portion of the $40 million has been invested in startups including Bakkt, the cryptocurrency exchange co-owned by Starbucks and the Intercontinental Exchange, which runs the New York Stock Exchange. [… Forbes]
Blockchain technology is being applied in unique and compelling ways across multiple industries. We feel it is important to be opportunistic and are excited to participate in this emerging opportunity.
ICOs are alive and well About 70 companies are holding token sales, and another 17 as of last week were planning initial coin offerings, where startups bypass traditional venture capital venues by raising money directly from investors through digital-asset sales. While the market is a fraction of what it was in 2018, it’s still bigger than at the start of 2017, when ICOs first began to take off during the Bitcoin bubble. About $292 million was raised in January 2019. What’s changed now is mostly the venues and to whom the offerings are pitched. While many ICOs used to be launched from the U.S., an increasing number are taking place elsewhere, such as in Switzerland. The Swiss FINMA, for example, will review a startup’s plans prior to an offering and send a letter green-lighting the project. [… Bloomberg]
The ICO model is not going away. The ability to raise money from anyone globally in a pseudo-anonymous way is still compelling to a lot of projects, and some version of it will be used long into the future.
Tipping in Bitcoin on Twitter When “liking” your favorite tweet isn’t enough, you can now send small bitcoin transactions. Announced Saturday, the beta app Tippin has released a new Chrome Extension available to Google browser users. Over Twitter, app users can send bitcoin payments via the Lightning Network, considered a way to make bitcoin transactions feasible at a large scale for the first time. With the extension enabled, a little lightning bolt symbol pops up inside every tweet next to the more familiar “like” and “retweet” buttons. All a user needs is a Twitter account and to install Tippin to receive tips. As such, Tippin hopes to capitalize on crypto Twitter power users to drive growth. […Coindesk]
Tipping is going to be incredibly popular with lightning network; It’s the first time we can send small amounts almost at no cost, and we can do it incredibly fast.
The founder and CEO of retail giant Overstock.com Patrick Byrne says that blockchain can make government “superefficient and incapable of being bribed.” Byrne reportedly said that government services have reached a turning point for a fundamental change of their structure, and blockchain technology, in his opinion, will be the optimal solution. Byrne proposed “building government-as-a-service, a set of applications and companies that, between them, can bring blockchain to different services that governments provide,” which will eventually “make government super-efficient, inexpensive and incapable of being bribed.” He stated:
We could step into Venezuela with six laptops and create not only a functioning society but arguably one with the most advanced government systems in the world. We could bring them a central bank on the laptop. Everyone in Venezuela downloads a free app, and suddenly you have the most advanced monetary system on the planet.
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.