• Europe 1.4million 

• China 1.2million 

• USA 295 000 

Environmentalists, such as Greta Thunberg, have always highlighted the dangers of climate change and Thunberg did this again at Glastonbury where she spoke about “governments creating loopholes to protect firms whose emissions cause climate change.  These firms are not the only ones that cause climate change. A quarter of the C02 that is emitted into the atmosphere can be linked to transportation, and a good percentage of world transportation revolves around road transport i.e., cars”. The BBC highlights, too, that “cars, buses and motorbikes - account for nearly three-quarters of the greenhouse gas emissions that come from transport.” But at this point in civilisation, is it impossible to do without cars since they are a fundamental aspect of our everyday lives? Indeed, some governments and organisations have envisioned a new way of riding without ‘poking’ at the earth. The idea of electric vehicles (EVs) has come to life and the industry is constantly morphing to remain true to its objectives. EVs are out to replace the internal combustion engines in the strive to reduce emission of carbon monoxide, hydrocarbons, nitrogen oxide, etc.

Electric car sales 2010 to 2021 globally

Source: IEA

Markets and Markets project that the global EV industry is expected to rise from 8.151million vehicles to 39.208million vehicles from 2022 to 2030, which equates to a CAGR of 21.7%. On the list of things driving the industry forward is governmental support through tax rebates and subsidies (compelling manufacturers to make EVs) and increased demand for low-emission vehicles. Unsurprisingly, the EV industry comes with its challenges but blockchain technology has found its place as a solution to some of these problems, including:

• vehicle verification

The growth of the industry creates an inner market for the sales of used EVs. Before buyers decide to purchase a used EV, there is a plethora of information required to be completed such as safety devices in the car, miles clocked, servicing information, etc. Blockchain can be used to create, in effect, a digital ID for such EVs therefore enabling buyers to quickly verify any information they are given by the sellers. Meanwhile, blockchain technology and services company, BlockchainXdev, is building a vehicle ID since research from FIA (Fédération Internationale de l’Automobile) claims that 15% of vehicles circulating in Europe were subject to mileage frauds in 2018.

• high production costs

Pre and post the COVID-19 pandemic, the cost of raw materials has risen and higher production costs have not been helped by an increase in transport overheads and general supply chain challenges. Blockchain-powered platforms can be used to track and trace materials that are being transported for production and generally improve supply chain efficiencies. 

• few charging stations

EV enthusiasts are reticent about buying EVs due to concerns about the availability or lack of charging points when embarking on a long journey even though, in the UK alone, apps such as ZapMap now list over 400,000 EV charging points. One-way blockchain technology is tackling this problem is by facilitating power trading between charging ports and those who need it. Examples of blockchain start-ups facilitating this trade are BlockCharge, Charg, Chargemap, Aerovironment, Share&Charge and Easy Park. To showcase how creating vehicular IDs and wallets with blockchain can solve charging issues for EVs, BMW partnered with Energy Web earlier in the year. Owners will no longer have to worry about their EV running out of power as they can look for available car chargers in areas before they embark on commutes. They leave with their cars charged, and the charger owner is adequately paid. All these are powered by blockchain peer-2-peer applications, which ensure these transactions are safe for involved parties. The advent of fast charging makes the concept all the more alluring as EV owners would not have to spend as much time charging. Energy Web is another example which can be seen with the partnering between itself and Vodafone and Mastercard, incorporating them into its payment system for EVs.

The EV industry was supported at the 2021 Conference of Parties (COP) meeting in Glasgow. The COP 26 declaration from governments across the world, major automotive manufacturers, fleet owners, financial institutions, and investors with significant shareholdings in the automotive industry all agreed to “rapidly accelerate the transition to zero-emission vehicles to achieve the goals of the Paris agreement”, supporting growing concerns around climate change and whereby encouraging governments to ban the sale of new petrol and diesel cars: 

• Denmark - by 2030

• France - by 2040

• Ireland - by 2030

• The Netherlands - by 2030 

• Sweden - by 2030

• UK - from 2030, and hybrid cars by 2035 

• USA - plans to ban petrol cars by 2030

• India - non-electric cars by 2030

• Spain - new internal combustion car sales by 2040

How blockchains can be used in the EV sector

               Source: Forbes

The road ahead to building the infrastructure for EVs presents many challenges. How much blockchain technology will be used is still to be truly determined, but it is highly likely that it will be part of the technology mix in helping to encourage EV adoption.

Source: Twitter

Meanwhile, Nikolay Storonsky, CEO of Revolut, has been frustrated by the FCA “for its tardiness in dishing out a UK banking licence for the firm”. Storonsky has complained that UK regulators were slower to grant regulatory approval compared to other jurisdictions: “I definitely see the process is slower compared to other regulators,” he stated, adding, “I’ll give you an example - so we applied for 48 licences across the globe and we received 44, and three of the licences that we haven’t received are actually in the UK.” Storonsky is not alone, with 80% of firms having applied to the FCA to be on the crypto register now having withdrawn their applications. It seems to many that the Bank of England and FCA have been dragging their feet. The FCA, whilst not regulating crypto assets, keeps reminding the public of the risks and volatility of this assets class (and correctly so). The FCA defines crypto assets to be: “Cryptoassets are cryptographically secured digital representations of value or contractual rights that use some type of distributed ledger technology (DLT) and can be transferred, stored or traded electronically”. This could be interpreted as denoting that firms dealing or issuing NFTs would potentially need to register with the FCA, since NFTs would appear to meet the FCA definition. Meanwhile, the Bank of England is calling for more regulation correctly, arguing that “technology cannot remove all financial risk”. Yet behind the scenes there could, indeed, be more going on than some realise - the stakes are high and furthermore, as the UK economy faces the spectre of stagflation and rising interest rates, the embracing of blockchain technology and the digital assets that they can create could hold some powerful benefits for the country. Estimates suggest that the value of the UK’s goods and services could expand by as much as £41.5bn by 2025 and create a further 678,000 jobs. There are certainly plenty of jobs for those looking to work in the digital asset sector already - the UK is ranked second only to the US with almost 1,000 jobs for people to work on crypto projects being advertised. 

Back in April 2021, when announcing that it was going to allow omnibus accounts, the Bank of England’s explanation of these new accounts was that: “an operator of a payment system can hold funds in the omnibus account to fund their participants’ balances with central bank money. This will allow them to offer innovative payment services while having the security of central bank money settlement.” In addition to this, HMRC issued a consultation paper on 5th July 2022 “ to consider if costs could be reduced for taxpayers who participate in DeFi, and could tax treatment might be more aligned with the transactions' fundamental economics thus making tax collection more efficient?” The UK government does seem to be listening to those engaged in digital assets and supporting Sunak’s wishes as it has issued its Financial Services Bill as recently as on 20th July 2022. Included in this are stablecoins, together with how the Financial Market Infrastructure (FMI) Sandbox could be for the tokenisation of real assets and thus issuance of digital securities such as digital equities, debt instruments, commodities and even digital mutual funds. Interestingly, the parliamentary bill would appear to be following the UK’s traditional regulatory approach so, rather than being prescriptive and driven by legislation (which is more common in the US and Europe), it seems to be encouraging parties to be flexible and empower regulators. The bill takes a broad-brush approach including stablecoin service providers such as the issuer, custodians, platforms, exchanges, wallet providers and entities that offer services or support the transfer of money. At the same time, the Treasury has also issued a payments consultation to extend the regulatory scope for payment systems and to include more parties in the payments chain.

This more proactive stance would appear to have been supported by the action itself. The current Chancellor of the Exchequer, Nadhim Zahawi, has announced that the UK plans to be one of the first G20 countries to issue debt instruments using blockchain technology. However, this target has already been met since the European Investment Bank (in conjunction with Banque De France) had issued €100million of bonds earlier this year and, in 2019, the World Bank issued $50million of kangaroo bonds with the Australians. Irrespective of this though is that the UK is a key jurisdiction for financial services and fintech innovation and investment, with over $9billion being invested in the first half of 2022 - second only to the US and more than the entire EU combined. Furthermore, there certainly seems to be no lack of support from the UK Treasury for digital assets. At a recent speech in the City of London, John Glen, treasury minister, said: “If there is one message I want you to leave here today with, it is that the UK is open for business - open for crypto businesses.” The challenge will be how such warm words and positive sentiment toward blockchain and the digital assets this technology can create, will truly foster regulatory clarity and thus encourage further engagement from regulated institutions?