Last Thursday

The ability to track and trace the origins of the food on your plate has some tantalising attractions for farmers’ shops and, most importantly, consumers. This gives some explanation as to why there are so many organisations now involved in using Blockchain-powered platforms. Blockchain allows for provenance of food items so retailers and shoppers have clarity over how, where and when produce has been grown/caught, the conditions in which it has subsequently been stored, and even the potential environmental impact it has and the sustainability of its production.

Many of the companies involved in offering greater transparency over their food supply chains are using a combination of technologies such as Artificial Intelligence (AI), Blockchain and Internet of Things (IoT). The information collected and stored by these technologies are then often accessible on mobile devices, including cell phones by using Quick Response (QR) codes. This enables various parties (along often complex supply chains which can in some cases span the world) to track and trace the journey of the goods  - how they are being transported, where they have come from, the temperature conditions in which they have been stored under, even the details of the trawler on which they were caught or the fields they were grown in.
Almost five years ago, in November 2015, a white paper (business proposition) was released by a company called Provenance, stating that, “Provenance enables every physical product to come with a digital ‘passport’ that proves authenticity (Is this product what it claims to be?) and origin (Where does this product come from?), creating an auditable record of the journey behind all physical products.” Provenance went on to quote Marc Andreessen who, in 1993, invented the first internet browser, Mosaic, and when talking about it, said, “Blockchain technology changes everything. The practical consequence […is…] for the first time, a way for one Internet user to transfer a unique piece of digital property to another Internet user, such that the transfer is guaranteed to be safe and secure, everyone knows that the transfer has taken place, and nobody can challenge the legitimacy of the transfer. The consequences of this breakthrough are hard to overstate”. 

There are many other examples of different organisations using Blockchain-powered platforms to track and trace various food products, which include:

Albert Heijn – the Dutch supermarket is now able to give customers the ability to trace and trace were their oranges were grown. It is planning to be able to offer provenance of all its produce by 2025;

Agriledger – working with the World Bank, this company is helping to increase farmers’ income by 2 to 3-fold, according to a report from the Said Business School at the University of Oxford (which grow mangos and avocados in Haiti);

Bumble Bee tuna - is using Multichain, running on the SAP cloud platform , to track and trace yellowfin tuna from the time it is caught to the moment it arrives on the shelves in a shop;

California Giant Berry farm - one of the USA’s biggest berry farmers is using the IBM Food Trust blockchain for its berry supply chains in order to give customers access to the provenance details and product tracking of its berries;

Farmers Hen House - with a QR code printed on each egg, this enables consumers to know form which poultry farm an egg was produced;

Starbucks - is working with Microsoft to give Starbucks a digital traceability of its products and also to support its sustainability strategy.

Meanwhile, IBM has commissioned a report, polling nearly 19,000 consumers from 28 countries across range of age groups,...

On Tuesday

For several years Blockchain technology has promised to help foster the greater use of renewable energy sources due to the fact it is able to trace the production of green sustainable energy. This will prove to be vital, whether it be for peer 2 peer electricity trading in local communities (i.e. selling surplus power generated from your solar panels or wind turbines to your neighbour) or to allow companies to be carbon neutral by specific dates, examples of this being Amazon by 2040, Microsoft by 2030 or Heathrow airport by 2030 (excluding emissions from the planes that land). Increasingly, consumers of electricity are looking for green energy suppliers and in the UK the six major electricity suppliers all have green energy tariffs.

There are a variety of companies which have been developing Blockchain -powered platforms in various forms to enable the tracking of carbon certificates, peer 2 peer energy trading, diverting excess power to electric vehicles batteries to recharge them and much more. Here is a selection of some of the current initiatives:

Nori is a firm that uses Blockchain technology to issue certificates for tracking and tracing carbon. It has developed a platform that enables farmers to be paid to, in effect to, ‘lock up’ carbon in their fields and so help offset global warming.

Vodaphone has announced that it has teamed-up with Energy Web, which is trying to decarbonise the electricity grid by using Blockchain, AI and IoT technologies to enable heat pumps, solar panels and wind turbines (i.e. renewable and usually distributed energy production) to be integrated into power grids. In simplistic terms, Vodaphone and Energy Web’s platform is very similar to how mobile phones operate with their individual identities. Therefore, each renewable energy producer can be identified, thus enabling the grid either to instruct each power supplier as to whether energy needs to be supplied to the grid, to stop producing energy or to store the power in a battery.

Equigy is using electric vehicle car batteries to store excess energy using Blockchain technology helping to ‘smooth out’ the supply of energy to electricity grids. The aim is to encourage investment into more renewable sources of energy, thus helping the environment.

Electron, based in Orkney, north of Scotland, has historically produced more electricity from its windy shores than it consumes. By using Blockchain technology, surplus energy is tracked and then diverted to batteries for storage and to also charge electric car batteries.

Power Ledger, in Australia, has teamed-up with a property developer in Perth as part of Power Ledger’s goal to introduce a solar energy trading platform for users in Western Australia. 

The cost of renewable energy continues to decline

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Source: International Renewable Energy Association

Encouragingly, renewable energy has entered a virtuous cycle of falling costs, increasing deployment and accelerated technological progress. The cost of solar power has fallen by approximately 80+% since the end of 2009, while wind turbine prices have reduced by up to 40%., all helped by economies of scale and improved efficiencies. Clearly, with the global ever- increasing focus on climate change and the need for more sustainable green energy, organisations have now transitioned from not just discussions about what might be, but to implementing real solutions in the energy sector thus helping to promote wider use of renewable energy suppliers. Blockchain-powered platforms are playing a vital role in this increased adoption of renewable energy solutions as they track and trace supplies for both energy producers and users alike.

Guide to Blockchain technology for those looking at supply chains The World Economic Forum (WEF) has published a comprehensive Tool Kit which it describes as “designed to help with the deployment journey, whether your organisation is seeking to gain increased efficiency, greater trust with counterparties, or other potential benefits offered by blockchain technology. Your organisation can use the toolkit to support more responsible blockchain deployments, de-risk early adoption, and ensure careful consideration of unintended consequences.”

The WEF has drawn on feedback from over 100 organisations experience and feedback that they have gained from implementing Blockchain technology. The Tool Kit draws from a wide cohort:

  • 50 countries 

  • 80 companies – covering the private and public sectors

  • 20 governments

  • 40 Blockchain projects

The Tool Kit is set out in 14 modules each including key topics as well as tools and resources. It also has a helpful ‘questions and answers’ section - Navigate Key Questions.

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Source: World Economic Forum Tool Kit

There is a new book from the Blockchain Research Institute called Supply Chain Revolution which, “identifies what leaders should be doing now to prepare their organizations for the inevitable decentralized future. Enterprise executives and entrepreneurs alike will find ideas and opportunities to discuss with their stakeholders and decide how best to participate in the blockchain revolution.

The world’s top experts show how blockchain—in combination with other innovations such as additive manufacturing, artificial intelligence, and the Internet of Things—can address longstanding problems that make the business of getting goods to customers so slow and expensive”.

Given the hugely complex supply chains created by globalisation and the number of parties involved to ship goods around the world, it is no surprise that we have seen the large technology companies targeting supply chains as ideal candidates for the use of Blockchain-powered platforms. Indeed, according to Tradelens - IMB’s venture with the shipping giant Maersk – it states; “Think about the last thing you bought online as a consumer, and the single, direct line of sight into its journey to your front door. The same can’t be said for your shipments. Each could be connected to as many as 30 independent parties and 100 people, generating up to 200 exchanges of information. Multiply that by the hundreds or thousands of shipments you’re responsible for, and the complexity and risk you deal with regularly is staggering”.

Oracle, is another behemoth technology company targeting supply chains, having partnered with CargoSmart which, itself, has the following ports and shipping firms on board:

It is not just large multinational corporations that are conscious of the inefficiency within supply chains. According to Stratis,  which is active in developing solutions for supply chains using Blockchain technology, “ A new study has found that the implementation of blockchain technology in supply chains could save businesses in Western Europe $450 billion in logistics-related costs. The report found that 60% of companies overpay their supply chain vendors and 70% have ‘visibility gaps’ between the initial supplier and internal clients’ systems.

In the food industry alone, a Juniper Research report revealed that blockchain will save $31 billion by 2024 through the streamlining of supply chains, efficient food recall processes and ‘simpler’ regulatory compliance.”

Whilst there is increasing debate regarding globalisation slowing (see above Video Byte above), it is unlikely to totally disappear in the short term as, subsequently, in order to improve the efficiency of supply chains (especially on a trans-national basis) this aligns with stakeholders’ interests.


The Covid-19 pandemic has generated enormous uncertainty around the world. Company boards are re-assessing the risk of being exposed to the current complex supply chains and individual countries, including those in Europe and the USA. To date, there has been concern that, for example, up to 97% of antibiotics are sourced from China (as highlighted by the Council for Foreign Relations).

A 2 min video considers the potential for the end of ‘hyper globalisation’

The complex nature of global supply chains has encouraged companies to turn to technologies such as Blockchain- powered platforms, such as Tradelens (backed by the shipping giant Maersk and IBM) or Oracle’s CargoSmart, in order to improve efficiency, cut 

costs and fraud and therefore hopefully lead to more transparency and trust. The era of hyper-globalisation (1990–2008) was where we saw production being moved to low wage countries, thus helping to drive down inflation. The fall of the iron curtain, China joining the World Trade Organisation and adoption of ‘containerisation’ (which now accounts for 60% of the value of seaborne trade) all fuelled the race to globalisation. The Centre for Economic Policy Research (CEPR), which is a network of universities and over 1,300 researchers, claims firms are reassessing business models which rely on global supply chains. These business models are also being changed due to increased use of robots and additive manufacturing, which are bringing factories and jobs back to more developed countries. 

The era of hyper-globalisation, according to the CEPR, came to an abrupt end in the Global Crisis of 2008/2009, subsequently due to a wave of uncertainty that had been triggered in the world economy. Between 2008 and the euro sovereign area debt crisis in 2012, Bretton Woods had a huge impact on the post-World War 2 global economy in encouraging global trade, as did the IMF and the World Bank (both of which are heavily influenced by America where they are based) The questions is - how relevant are they still? It would appear that as nationalism is on the increase, both witnessed by Trump’s “make America great again” and BREXIT in the UK, technology is making old jobs redundant, thus altering the world of work -  is this going to force politicians to focus more on the task of retraining workers and less on global trade?

On Thursday

Well, without a doubt Libra (the project initially backed by Facebook) certainly had a baptism of fire when it was first announced almost a year ago, in June 2019. The founding 28 members invested $10 million, although Paypal Visa, Mastercard, Stripe, Mercado Pago, and eBay all left Libra last October.

Founder of Facebook, Mark Zuckerberg, was interrogated in a Congressional hearing as governments became concerned that, with 2.6 billion active monthly users, this ‘new-fangled’ Libra currency could even threaten the ‘mighty greenback’  - aka the US$. An American Senator committee member was reported in Australian Financial Review having said, “Large payment companies are wise to avoid legitimising Facebook’s private, global currency. Facebook is too big and too powerful, and it is unconscionable for financial companies to aid it in monopolising our economic infrastructure. I trust others will see the wisdom of avoiding this ill-conceived undertaking.”

It was not just the Americans who seemed less than keen to embrace Libra’s proposed digital currency. According to GreenWatch, “The G7 group of nations has vowed to block it unless Facebook can prove it is safe and secure. There are concerns the currency could be used for money laundering, disrupt the global financial system, or give Facebook too much control over user data”.

Source: British

However, Libra Association vice-chairman Dante Disparte said in an interview, "The journey since the original white paper was released has really provoked an important conversation around the world about, how do we appropriately regulate digital payments and digital currencies?” Given that the Chinese are about to launch their own Central Bank Digital Currency (CBDC) and what with the increasing call for other countries to have their own Digital Currencies as well, there will be a need to respond to Disparte’s question!

It is interesting to see Stuart Levey, who was Under Secretary for Terrorism and Financial Intelligence for the U.S. Treasury for 7 years being appointed CEO of Libra, that Temasek (Singapore’s sovereign wealth fund with an estimated value of $313billion) has joined Libra. Temasek Tweeted , revealing its engagement with Libra by saying, “Looking forward to the potential of this #blockchain-based digital currency, and how it can help create a regulated global network for cost effective retail payments”. Libra’s own press statement regarding Temasek’s involvement announced, “Temasek, a global investment company headquartered in Singapore, brings a differentiated position as an Asia-focused investor. Temasek sees innovative technologies such as blockchain as transformative enablers of growth. Temasek’s efforts to support and advance the use of blockchain technology across a range of use cases, asset classes and sectors, reflects its drive to explore, develop and invest in solutions to bring about a better, smarter, and more sustainable world”. Temasek’s engagement with Libra, once again, demonstrates how Asians are comfortable embracing digitisation.

Another significant appointment for Libra is Robert Werner as its General Counsel. He has worked at HSBC, Goldman Sachs (overseeing Privacy and Regulatory Relations) and Merrill Lynch (leading financial crime compliance). Werner also has in depth experience working with governments, having been a Director of the Financial Crimes Enforcement Network for the United States Department of the Treasury.

As well as continuing to talk about a digital currency backed by a basket of fiat currencies, Libra is also looking to create a portfolio of stablecoins each backed by different fiat currencies suitable for different countries. It would therefore be relatively...

Last Tuesday

There are some preliminary reports being published suggesting there could be a new strain of Covid-19 which is potentially even more infectious than the existing one. Interestingly, 75% of all emerging infectious diseases over the last 50 years have been zoonotic (from animal to human) according to the U.S. Center for Disease Control and Prevention. (CDCP)

Blockchain technology, itself, can be a main player in supporting the battle against these pandemics: 

by tracking those infected -  both Acoer and The Public Health Blockchain Consortium are monitoring the continual and anonymous verification of communities and workplaces that are free from coronavirus COVID-19;

in the carrying out of research and clinical trials - provides the ability to anonymise data thus keeping personal information confidential (pharmaceutical firms and governments need trends);

by tracking donations and how funds are spent- e.g. Hyperchain in China;

by way of tracing and tracking the quality control measures required for medical supplies e.g. AG offers access to the temperature records of pharmaceutical products during their transportation in order that necessary compliance temperature requirements can be verified. Also, VeChain tracks the authenticity of medical masks together with the supply/production of them.

However, there are challenges to using Blockchain technology:
Regulatory – if a public blockchain is used potentially no party is responsible or can be held accountable for the data on the blockchain. Therefore; it would not be possible to delete data thus potentially breaching GDPR regulations and the right to be forgotten; 

Data privacy - as potentially people’s movements would be tracked to ascertain with whom they have been in contact;

Patient engagement - safeguarding issues in the case of the young, old or those with limited mental capacity;
Interoperability of data - there is a lack of standards and regulations between different systems/Blockchains;

Scalability and speed -this could well prove to be a challenge given the huge amount of data involved.

Guardtime, is a company which uses a blockchain-based platform to secure over 1 million patient records in Estonia and is cited as an example of the use of blockchain for the management of electronic medical records (EMR). Another such example is the MedRec project, a project of MIT Media Lab and Beth Israel Deaconess Medical Center. It is a blockchain system that ‘prioritizes patient agency’, giving a transparent and accessible view of medical history. The Gem Health Network (GHN) is yet another example, which is developed by the US start up, Gem, using the Ethereum blockchain platform. GHN allows different healthcare practitioners to have shared access to the same data. Healthbank, a Swiss digital health company, is similarly working on empowering patients to be in full control of their data using blockchain platform. In a systemic review on blockchain technology in healhcare from 2019 the author includes in his research the Medicalchain project, whose blockchain-based platform will be designed to facilitate the sharing of patients’ medical records across international healthcare institutions, as well as the Healthcoin initiative which aims at constructing a global EMR system. Other players involved in the research paper working on different initiatives and projects based on blockchain-enabled patient-centric EMR included Factom, HealthCombix, Patientory, SimplyVital, IBM’s Watson, BurstIQ, Bowhead, QBRICS and Nuco.

Zoonotic diseases, themselves, are very common, both in Asia and the United States, and around the world. Scientists estimate that more than 6 out of every 10 known infectious diseases in people can be spread from animals. Because...

2 Weeks Ago

One cannot escape noticing that this week something called ‘Bitcoin halving’ has occurred. A number of Digital Byte readers have asked what this means?

There have been 18.3 million BTCs mined so far with the intention that a total of 21 million BTC will be finally created by 8th October 2140. The theory is that by reducing the number of Bitcoin tokens being created this will counter the impact of inflationary pressures. Thus, every 210,000 ‘Bitcoin blocks’ (approximately every four years) the number of Bitcoins (BTCs) paid to a miner for a block on the Bitcoin network is halved. Subsequently, the block reward is now reduced from 12.5 BTC to 6.25 BTC, meaning that the amount of new BTCs created each day will fall from 1,800 to 900.Therefore, this will result in a BTC miner’s total income (assuming the current BTC price of $8600) falling from $15 million to $8 million each day. 

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Source: ChartBTC

Melem Demirors of CoinShares believes, “That the past two halving’s cannot be compared to the current one because a robust derivatives market has been established. As a result, Bitcoin as an asset is decoupled from the supply-demand economy”.

Time will tell what impact the halving will have on BTCs’ price but it does, once again, remind us of the level of detail that went in to creating Bitcoin in the first place.

Therefore, in very simplistic terms:

Assuming the demand for Bitcoin remains the same, the theory is that by reducing the number of Bitcoins being issued every day the price of Bitcoin, itself, will be supported. Furthermore, by halving the number of Bitcoins given to a miner this means it will ultimately take longer for the maximum number (21 million) of Bitcoins to be reached.

To give an outline of what an EquiBond is:

An Equibond can be built on the success of crowdfunding in that it will allow SME’s to raise a limited amount of capital from private investors. Equally, EquiBonds be traded on a Digital Exchange, so therefore can be bought and sold 24/7 by investors.

  This offers an exit for those investors thus offering liquidity (which is missing from many crowdfunding propositions). An EquiBond also aligns investors’ and entrepreneurs’ interests since the time taken for the invested money to be redeemed will be reduced and hence the quicker the entrepreneurs can grow their revenue. Historically investors have had to rely on dividends to receive a return, which can only be generated if the company is profitable (which many smaller firms are not as focused on they often are more interested in growing the business).
Proposed guidelines:
Companies issuing an EquiBond are required to have at least 1 year’s audited accounts ensuring that a third party has reviewed the company’s financial position. This means that EquiBond investors will also avoid 20% of those businesses which become insolvent within 12 months of being established;
The maximum that can be raised is €8 million - same as current crowdfunding limits;
The maximum an investor can invest in a tax year into EquiBonds is £20,000 - same as the annual ISA allowance;
An EquiBond can be held in an ISA;
An investor can invest a maximum of £5,000 p.a. into each EquiBond - so not overly exposed to individual issue;
The income on an EquiBond is tax free;
Investors will be subject to full KYC and AML checks, which can be carried out by the exchange where the EquiBond is to be traded on;
10% of any monies raised from an EquiBond issue is to be paid to the National Lottery - so helping good causes and ensure that there is governance and independency as to the beneficiaries;
The total costs of issuing an EquiBond cannot exceed 5%. Therefore, including the 10% given to the National Lottery, investors are assured that 85% of the capital raised will be deployed into the company in which they are investing;
Money raised from an EquiBond is treated as capital so not taxable for the company receiving the capital;
Initially the EquiBond pays 10% of its revenue to investors above a pre-agreed level of company turnover. Once the initial capital invested is repaid, the share of revenue reduces to no more that 2% of the company’s Earnings Before Interest Tax Depreciation and Amortisation (EBITDA);
The income generated from a share of a company’s revenue is calculated based on the number of days the investor has owned the EquiBond - and can be paid as frequently as monthly;
The company wishing to raise capital has to have at least one non-executive director on its board; 
The directors need to have professional indemnity insurance (PI) in place as this will mean a third party (i.e. the firm offering insurance) has reviewed the company in order to agree to offer PI;
To issue an EquiBond, a company must produce a mini prospectus with any stated facts and claims fully verified.

There will be a prodigious need for SMEs to raise capital in Europe, the USA, UK and other jurisdictions and it is intended that EquiBond can help to this demand. Various discussions are currently in place and Digital Bytes will release further updates...

There is a growing trend of professionals and experts from traditional financial service companies engaging in digital assets.



Paul Tudor Jones, the ex-head of HSBC legal , is to head up Libra as its CEO. Given he was Under Secretary for Terrorism and Financial Intelligence for the U.S. Treasury for 7 years he will be well-aware of what governments are looking for and, no doubt, will be trying to position Libra to be acceptable. Jones, who was famous for predicting the 1987 crash, claims Bitcoin is the best bet against inflation that will arise from governments printing cash;

British historian
Niall Ferguson, previously professor at Harvard and New York Universities and senior research fellow at Jesus College, Oxford when asked about Digital Assets  stated, “I think the right lesson to draw from all of is that a global order needs to be based on a distributed operating system, not on a centralized architecture...", noting that cryptocurrencies are “essentially digital gold”;

Angela Knight, former COO of Standard Bank Private Bank in the UAE, has joined as a member of the advisory board of 220, the new challenger digital private banking start-up which is looking to offer access to digital assets as well as traditional assets to clients;

Caitlin Long, who ran Morgan Stanley’s pension solutions business for 9 years and held senior roles at Credit Suisse for 10 years has now set up Avanti - a US bank specialising in providing payment, custody, securities and commodities activities for institutional customers using digital assets;

Christopher Giancarlo former Chairman of U.S. Commodity Futures Trading Commission, is co-looking at a CBDC digital dollar with Accenture.  Giancarlo shown support  as he was reported saying; “unlike bank transfers, crypto asset transactions can be cleared and settled quickly without an intermediary”;

In May 2020,
China is going to issue its own CBDC in a selection of cities across the country. Popular refreshment and food outlets including McDonald’s, Starbucks and Subway have all reportedly been invited to trial this new Digital Asset.


3 Weeks Ago

Telegram was established in 2013 by Pavel Durov and his brother Nikolai Durov. Pavel, himself, is estimated by Forbes to be worth $2.8 billion and had previously founded Vkontakte, Russia's biggest social network (the Russian equivalent of Facebook). Pavel, with his brother, issued a whitepaper in Q1 of 2018 carrying out an Initial Coin Offering (ICO) selling 2.9 million ‘Grams’ tokens and raising $1.7 billion.

According to the SEC filing, Telegram is 100% owned by Pavel Durov, who is a resident of St Kitts and Nevis. Telegram Group Inc. is a privately-owned British Virgin Islands company, with its principal place of business being in Dubai, United Arab Emirates. The primary entity overseeing the Gram token distribution is TON Issuer Inc., again a British Virgin Islands (BVI) company wholly owned by Telegram Group Inc., and with its primary place of business in Tortola. TON Foundation is to be, or will be, incorporated as a Cayman Islands LLC. Its mission is to “promote and support the TON Blockchain” and includes management of Grams distributed to the TON Foundation by TON Issuer Inc. The sole members of the TON Foundation’s board are, and will be, Pavel and Nikolai Durov.

Telegram created ‘Grams’ which were claimed to be designed for users to spend on a global instant messaging app, powered by Blockchain technology and called Telegram Open Network (TON).  The intention was that Grams would have a finite supply, thus theoretically rising in value as more people used them on the network and as demand for the currency increased. According to a statement from Telegram, the intention was to offer “significant improvement upon previous platforms in terms of speed, usability and scalability.”

Telegram carried out two fundraisings - the first, in Q1 of 2018, attracted  81 investors putting in minimum of $20 million each and raised $850 million, at an average price of $0.38. In a filing to the Securities and Exchanges Commission (SEC) Telegram reported that it had carried out a second issue later in the year and had raised an additional $850 million from 94 investors, bringing the total amount to $1.7 billion. Telegram also added that it would possibly “pursue one or more subsequent offerings” beyond these first two sales. Of note, investors in the first round could use other Crypto currencies, such as Bitcoin or Ethereum, to buy Grams but in the second round one could subscribe for Gram tokens only in US dollars and Euros, at a price of $1.33. 

There were differences not only in price but also the ‘lock-up’ restrictions between the terms of the Purchase Agreements for investors in Telegram for the two rounds. Those in the first round were not permitted to sell their Grams immediately but had to wait 3 months, and then could only sell their Grams in 25% increments staggered over 18 months. On the other hand, the second set of investors did not have any restrictions and could sell their Grams as soon as they received them. However, in October 2018, the Security Exchange Commission (SEC) in the USA sued Telegram as it believed bank records would prove Telegram illegally sold tokens to resellers who were paid a commission on selling Gram tokens. Furthermore, Telegram had sold tokens after a March 2018 deadline.  

So, what is the value of Telegram? Unfortunately, valuing any cryptocurrency is difficult for main two reasons:

Cryptocurrencies are not ‘shares’ in a company but ‘representations’ of the value...

It seems as if every week there is a fresh announcement of how Blockchain technology will impact financial services as another bank, insurance firm or asset manager unveils a different project or investment they have made. Some call it the ‘Internet 2.0’.

Without doubt, Blockchain technology offers the financial services sector many advantages. It can help reduce costs, improve transparency, give greater data security and has the ability to create new products and services more relevant and appealing to younger clients (who are typically looking for access to real time information from their mobile phone while on the ‘go’). 

Total number of Fintech, Insurtech and Realtech start-ups worldwide by industry, as of October 2019


While change needs to be embraced (and there are a host of Fintech firms globally trying to implement this change), the incumbents are unlikely to alter and jump on what some still see as just the latest ‘techy band wagon’. Let us take, for example, custody services offered by banks worldwide - a market that is dominated by only five players. If you are managing assets on behalf of an investor, in most jurisdictions it is a requirement to have the actual assets ‘looked after’, i.e. in the custody of a third party. However, the majority of traditional custody service providers currently do not offer custody of Digital Assets. Arguably this is one of the reasons why it is difficult for fund managers to buy and own Digital Assets, as their existing custody agents are not able to administer them. It also may explain why fund managers often get exposure to Crypto assets (e.g. Bitcoin) via futures traded on established market, such as the Chicago Board Option Exchange (CBOE), as traditional custody service providers are familiar with ‘looking after’ futures contracts but not Cryptos.
A company trying to fill this gap in the market is Custodiex, which has been established by Martin Gymer, an ex-banker who therefore has first-hand experience about what the banks need and currently offer. Gymer recently pronounced, “We know the world is digitising assets like crazy….  Bitcoins and alternative coins, currencies, commodities, documents, property, Intellectual Property, patents, trademarks, customer and business data, paintings, literally everything. At Custodiex we offer a hybrid concrete and cloud solution to look after these digital assets on behave of third parties.”

Custodians by Assets Under Custody  

Source: The Asian Banker

The securities industry is certainly one area that is likely to benefit from using Blockchain technology. Enabling trades to be settled faster while providing military grade security helps to explain why possibly JP Morgan has developed Quroum. A Blockchain-powered security would enable dividends to be calculated, based on the number of hours a security had been held, and give real-time access to whom is the beneficial owner of an asset. It would be possible for different types of information to be shared with different parties or different divisions in the same organisation, thus maintaining greater confidentiality and offering enhanced security and privacy (which is impossible using paper-based records requiring masses of documents). At the same time the Blockchain technology would enable regulators to have on-line access to all the data and then, in turn (by using smart contracts), 
run exceptional reports to offer real insight to the internal risks and any systemic macro risks in...

Bitcoin was developed as a way not to be reliant on the banks, but to be able to transfer value globally without using centralised systems and governments. It is therefore ironic that, while there is increasing recognition for tokens/coins/cryptos (Digital Assets) to be widely accepted, Blockchains will need to embrace core rules in order to have agreed standards and definitions.

There are several entities trying to tackle this challenge:

 Global Digital Finance (GDF), based in the UK - endeavours to drive efficient, fair and transparent crypto asset markets by building a knowledge base and best practice for ‘Truly Digital’ finance and the benefits tokens can bring all market participants.”

The International Token Association (ITA) is a German-based association that specialises in the identification, classification, and analysis of Blockchain-based tokens.

International Standards Organisation (ISO) has established ISO/TC 307 - “blockchain and distributed ledger technologies, which have been set up to meet the growing need for standardization in this area by providing internationally agreed ways of working.”

The Enterprise Ethereum Alliance  - “an organisation whose charter is to develop, open blockchain specifications that drive harmonisation and interoperability for businesses and consumers worldwide.”

So, the list goes on, with no real dominant body yet emerging that has been able to create a common set of rules and guidance for all to follow. The ‘cyber punks’, who were the earlier adaptors of Blockchain (in particular, Cryptocurrencies) will no doubt recoil at the thought of central guidance and, dare it be even said, rules. However, for governments and multinational corporations to have a set of standards/rules according to which they can work and build procedures and systems around will be music to their ears.

Interestingly, we have already seen increasing use of private Blockchains, such as JP Morgan’s Quorum, Maersk’s Tradelens and BP Vakt (previously as fierce competitors) now working together in a more collaborative manner using the same Blockchain-powered platforms. However, it is highly unlikely we will see any of the proposed Central Bank Digital Currencies (CBDC) being run on a private Blockchain and being fully decentralised.

4 Weeks Ago

IBM, Microsoft and Oracle are usually fighting against each other in business but have now joined together in assisting a project called MiPasa to use healthcare data from the World Health Organisation (WHO).

Blockchains are renowned for being able to help restore trust and offer greater transparency which, given the ‘fake news’ that is swirling around covid-19, is vital if governments are to be able to take decisive steps to protect citizens from the covid-19 pandemic. The MiPasa is designed to enable people to check whether they have been close to someone who has been infected with Covid-19. 

MiPasa has been designed not to collect personal information and since Blockchain-powered platforms are able to create an immutable and verifiable database, MiPasa is seen as an ideal technology especially in a situation where people’s lives could be at risk.


By using Blockchain technology it is possible to hold data in a highly secure manner and make it available globally. Conceivably even more useful is that any of the information held could be passed between different parties without disclosing certain information i.e. personal details. The use of anonymised data is proving to be very valuable and, indeed, was a topic addressed in 100+ page comprehensive report produced for the European Parliament, looking at the challenges of Blockchain and GDPR. Another ID project using Blockchain technology to track Covid-19 is being built in China by Elastos and is designed to track an individual’s health using strict privacy controls. Being interoperable it could be used between different cities and countries, hence if you were tested to be negative to the virus in the U.K, you would be free to travel to the USA by presenting your credentials recorded on this Blockchain-powered app.


In the case of tracking the spread of a virus such as Covid-19, various parties, e.g.  governments and organisations (such as WHO), will most likely be looking for trends – which age groups, sex, ethnicity etc, are catching the virus in different countries. From this the statistics would reflect mortality and survival rates, as opposed to whom individually has/ has not contracted the illness. Alongside this, a research paper looking at the sharing of digital medical records for oncology patients highlighted the use of anonymised data to be beneficial for the prompt care of cancer patients, as well as for the development of other medical research.


The ability for Blockchains to gather data, hold it securely and make it anonymised may well lead to greater demand for Identity Cards being used. In desperate times, such as now, unusual actions do happen. For example, the usually strict Disclosure Barring Service checks carried out for due diligence on potential new employees have temporarily been changed:


       ID documents to be viewed over video link;

       scanned images to be used in advance of the DBS check being submitted.


Will we see governments, which presently do not have ID cards, introduce them so that infections rates and eligibility for payments, such as furloughing or potential eligibility for vaccinations (as and when there is one for Covid-19) can be tracked?
Arguably, Facebook’s Libra project has put Digital Currencies on the agenda. Governments and central banks have now announced that they are to change what they’re planning to launch.

Instead of a digital currency that is made up of a basket of fiat currencies, they are now looking at issuing a series of digital currencies pegged to individual fiat currencies, and similar to some of the existing stable coins which currently exist e.g. Tether, US$, Circle etc. Interest in some stablecoins (such as Tether) have seen a substantial increase in their assets recently, as Tether is now worth over $6.35 billion, a rise of $2 billion in just March. It would appear that those at Libra wish to help central banks create their own individual fiat-linked stablecoin and, to start the process, Libra has applied to the Swiss Financial Markets Supervisory Authority (FINMA)s for a payments services license. Facebook’s David Marcus said, “Libra will sport a comprehensive network-level system around anti-money laundering (AML), Combatting the Financing of Terrorism (CFT), and sanctions enforcement" and "building stronger protections into the design of the Libra Reserve to protect consumers, even in the most adverse situations”.
However, the Financial Stability Board (FSB) has announced 10 proposals to central banks, and one of the them is to ban decentralised stablecoins if it is felt they cannot be controlled or regulated. Potentially, if the recommendations proposed by the FSB are enacted then Tether, for example, may need to become authorised in every country in which it wishes to issue its token. As a result, this would substantially increase its compliance infrastructure and costs. Could it be that the FSB proposals a method of simply ‘clearing the way’ so that, in effect, it will only be central bankers who are able to create digital currencies?
Meanwhile, in China, the government is still progressing its plans to launch a national digital currency (DCEP) as local government employees in the city of Suzhou will receive 50% of their May 2020 transportation subsidies in DCEP. The DCEP payments will be made by four state-owned banks - the Agricultural Bank of China, the Industrial and Commercial Bank of China, the Bank of China and the China Construction Bank. It is not just in China we are seeing increasing adoption, as in Malaysia a payments platform (MoneyMatch) has announced it will soon be using Ripple. CEO of MoneyMatch, Adrian Yap, believes that banks make huge profits from FX-operations which are really expensive for the users. He recently stated, “After joining RippleNet, we were suddenly a credible partner for all these financial institutions and payment providers around the world. Working with RippleNet partners allowed us to cut our costs by as much as 40% and instead of transactions taking at least two days, we were completing payments in just a few hours.”
Now, what could be a significant change in the financial services sector regulations is, were Libra to indeed manage to build in a set of strong AML controls, would the use of its version of a digital currency mean that there would be less need for compliance checks by other institutions? In effect, would financial institutions be able to delegate their AML thus potentially...

2 Months Ago

5 Months Ago

For years Singapore has been a dynamic economy ready to embrace and commercialise business activities, which helps to explain why it has been able to export more than it imports, and therefore has had a positive balance of payments over the last ten years.

Hence, it ought to come as no surprise that Singapore has been active in the Blockchain sector.

Source: IIF, BIS, IMF

Northern Trust has started to work with BondEvalue, a debt market firm based in Singapore financial regulatory sandbox and has created a platform called BondbloX, which is a Blockchain-powered exchange designed to trade bonds that have been digitised. In a report released by the International Institute of Finance (IIF), it stated the global debt market will exceed $255 trillion in 2019. It was also claimed that the world debt market has risen by over $7.5 trillion in just the first six months of 2019. Northern Trust, the 10th largest custody agent globally, will provide custody services for BondbloX. BondEvalue is creating Digital Assets backed by high-grade bonds, which will enable retail investors to access to these bonds in a digital format. Usually smaller investors are not able to invest in these types of bonds, given the normally large minimum investments asked for.

JP Morgan has teamed up with Singapore’s Central Bank, the Monetary Authority of Singapore (MAS), to develop a Blockchain-powered cross-border payments solution. This project is part of the fifth phase of a Blockchain initiative, called Project Ubin, which started in 2016 looking at how to integrate Blockchain technology into payments and settlement. Sopnendu Mohanty, chief fintech officer of MAS, seemed to be hinting of what may be coming when he said.  “We hope this development will encourage other central banks to conduct similar trials, and we will make the technical specifications publicly accessible to accelerate these efforts. We look forward to linking up with more Blockchain networks to improve cross-border connectivity. This will be a big step forward in making cross-border transactions faster, cheaper, and safer.” Mohanty also said, “There is growing evidence now that Blockchain-based payments networks can enhance cost efficiencies and create new opportunities for business

Expect to see many more announcements in 2020 of projects and initiatives involving cross-border payments and the digitisation of bonds. Key financial centres, such as Singapore, will not wish to miss out on these developments. The use of Blockchain technology will shake up many of the incumbents, removing the need for many of the current intermediaries.


Corporate Finance

6 Months Ago

In an article in The Sunday Guardian in India written M.D Nalapat, who is the Editorial Director of The Sunday Guardian, he proposed that the Chinese Government is stockpiling gold and also posed the question - could this eventually lead to the Chinese launching a Central Bank currency backed by gold?

Surely it would be better for China to have any digital currency that it wishes to create, to be backed by a basket of real assets that are traded on recognised stock exchanges? Such assets would include equities, bonds, property, a variety of commodities, not just gold, and fiat currencies.

China was reported in Bloomberg to have bought over 100 tonnes of gold since the trade war between itself and the USA started. The Chinese Government has been a consistent buyer for months and the 10th running month in September, as the People's Bank of China (PBOC) raised its holdings of the precious metal. However, it has some way to go to own more gold than many other countries, in particular, the USA.

Central Banks