In addition, there is frequently no standard way of documenting, storing and transmitting information, especially when dealing with global supply chains that involve many jurisdictions. According to East Asia Forum.org: “A single cross-border trade transaction involves the exchange of an average of 36 different documents and 240 copies of such documents”. Distributed ledger technology, known as blockchain technology, has the potential to improve, modernise and fortify supply chains by providing transparent and secure product tracking at every stage. The audit trail is visible in real-time and documented as blocks in a chain, so there is no guesswork along the supply chain as to when goods are shipped, who has handled them or when they will arrive. Greg Cline, head of research for Aberdeen Group's  manufacturing, product innovation and engineering practices section, explains: "Many manufacturers are enthusiastic about blockchain's potential capacity to authenticate items going through the manufacturing supply chain." So, given the highly transactional and frequently multi-step nature of business process services, the potential uses of blockchain technology in manufacturing are substantial.

Source: msrcosmos.com

What are the benefits that blockchains offer manufacturers?

Although blockchain technology may have been initially developed to streamline cryptocurrency transactions its underlying principles are adaptable to the manufacturers, such as:

• reduction of administrative expenses and entrance obstacles - blockchain technology might significantly lower the threshold for new entrants by reducing the cost of maintaining a manufacturing business. The blockchain-enabled business model of "machines as a service" (MaaS) allows firms to save money by leasing rather than buying machinery. This new form of conducting business will make it easier for up-and-coming manufacturers to obtain their goods to market without the need to borrow large capital sums.

• persistence and firmness - as a result of COVID-19, manufacturers have been obliged to review their supply chains and methods of production. Blockchain technology is able to help strengthen the resilience of a manufacturing company, even whilst there is no silver bullet for dealing with disasters such as a worldwide pandemic. The decentralised nature of blockchain technology ensures that blockchains can function even if a single node fails or a single participant leaves the network. When it comes to building a robust business strategy, the consistency provided by blockchain technology is invaluable to manufacturers.
  
  

• trust and openness are strengthened - businesses that wish to earn the trust of various third parties such as suppliers, distributors, shareholders, staff, and potentially the end customer, are able to offer greater transparency using blockchain technology. Distributed ledgers store data in a single, immutable copy that all nodes can access in the network at all times. 

• improved security - blockchains store data using intricate cryptographic coding to ensure the security of the information that they hold. Blockchain's openness is matched with stringent safeguards in the form of cryptographic signatures on each transaction. Since the network's storage is also distributed, the ledger and the information it contains are safer against cyberattacks as not all the data is held in just one location.

How blockchain is used in manufacturing

• verifying the origin of materials

Falsified products and fraud in the supply chain have been a problem for many manufacturers for years, whether it be horsemeat being used for human consumption or corrupt medical supply chains. Hence, manufacturers are looking to blockchain technology to build an immutable ledger of assets and products. With the use of blockchain technology, a distributed digital ledger can be created which solves issues with the distribution and dissemination of data in a decentralised supply chain. A safe, permissioned database is available to vendors, but no single organisation claims sole custody of the information contained inside. As a result, the possibility of fraudulent data alteration by some vendors is greatly reduced. In addition, the inaccuracies and delays that come with paper-based audit trails are eliminated with the use of blockchain technology in manufacturing. Those in the manufacturing business may now check the provenance of their materials and keep fake goods out of the supply chain. An immutable audit trail is achieved while the danger of fraud is decreased.

• supply chain management

One of the most time-consuming and essential business activities for manufacturers is supply chain management. Using blockchain technology, factories can track more accurately the whereabouts of raw materials, components and finished goods. Blockchain's definitive end-to-end path for parts and products enhances track-and-traceability, whereby improving accuracy and reducing production mistakes.  Japanese manufacturer, Toyota, is now able to tracks auto parts across multiple jurisdictions, factories and suppliers, sharing information on a real-time basis with manufacturers, banks, distributors, insurers, government authorities and customers by using blockchain technology - thus reducing recall rates and increase safety.  

• automated contractual terms (smart contracts)

The introduction of smart contracts made possible by blockchain technology has revolutionised the manufacturing industry. Smart contracts are computer codes that may be found on a blockchain, eliminating the need for paper contracts or fragile digital reproductions of paper contracts. The use of smart contract enable greater automation of many of the current paper-based systems which manufacturers have historically relied upon, so streamlining otherwise intricate corporate procedures. The terms and conditions and data stored on a blockchain may be utilised to offer more accurate inventory tracking, supply chain monitoring, payment timing and processing in a highly transparent manner to engender greater levels of trust in the manufacturer. By switching from manual to automated procedures, businesses may save time, energy and money. 

• quality assurance and regulatory compliance

As a result of its inherent security and capacity to monitor a single version of a piece of information, blockchain technology can be helpful for a manufacturing a company's quality control and regulatory compliance demands. Blockchain technology may reduce errors in the quality control process by using machine-level monitoring and exact track-and-trace of materials and components. As a result, there are  fewer product recalls and less material goes to waste, both of which drive higher levels of profitability. A second advantage is that the blockchain ledger cannot be altered. This includes machine information, production methods, raw materials, and more. Internal and external auditors can utilise these records to verify safety precautions (all legal requirements) as well as helping to monitor companies’ ESG credentials. 

The adoption and growth in the infrastructure which enables cryptos to become even more mainstream shows no sign of abating. Mastercard has sponsored a survey of 35,000 people and found that 91% had heard of crypto and half were interested in using crypto to mail payments, and recently CNBC has reported: “Mastercard and Visa have both been signing up new partners and become even more involved in the crypto sector”. Mastercard has teamed up with crypto firm Bakkt to let banks and retailers offer crypto-related services.  Visa, has more than 70 crypto partnerships and has now agreed a deal with FTX to offer crypto debit cards in 40 countries. Not to be left out, American Express has revealed it is exploring how to allow stablecoins to be used on its network. Smaller payment platforms are also engaging with stablecoins - for example, Jack Dorsey (founder of Twitter and reportedly worth over $7billion) has a payment business called TBD, which has tweeted: “We’re partnering with [Circle] to solve some of our biggest money challenges, including decentralized, global on-and-off-ramps between fiat and crypto worlds that can power global use cases from cross-border remittances to self-custody of stablecoins.” Here is a list of other payment platforms offering crypto-related services, but relatively few banks exist which have been prepared to offer on ramp/off ramp crypto services i.e. enable one to buy or sell crypto using a bank account.

An often-cited question is: “How can I use my crypto?” Well surprisingly, there are literally millions of merchants around the world that accept Visa or Mastercard. Furthermore, via their platforms one can spend crypto using a crypto debit card, such as Crypto.com. Alternatively, there are a host of smaller firms alongside many global companies that accept Bitcoin as a form or payment - 99bitcoins.com lists some of them here. So, for retail investors, it is relatively easy to spend crypto. But you may also question: “Why should I care about crypto?” The fact is, crypto is merely a rounding error and valued at $1trillion - when you compare it to the asset management industry that is worth over $100 trillion, or the real estate sector that Savills cites is worth $326trillion. Well, digital assets have certainly been on the radar for the world’s biggest custodian bank, BNY Mellon, with $43trillion of assets in custody. Furthermore, it has just launched a crypto custody service enabling its clients to hold crypto and have the same protection as if they were holding cash, equities bonds or any other asset. Having surveyed 271 institutions, BNY Mellon has recently issued a report, “Migration to Digital Assets Accelerates” - and the results may surprise some. The research shows that “70% of respondents would increase their digital asset activity if services like custody and execution are available from recognized, trusted institutions. Despite the market downturn, 88% are moving forward with their plans. The study further indicates that almost all institutional investors (91%) are interested in investing in tokenized products”. 

Institutions and digital assets

Source: BNYMellon

As BNY Mellon has revealed, whilst the headlines are often about crypto, possibly the real reason behind why (along with many other global financial institutions) are building an infrastructure for digital assets is less about crypto and more about the digitalisation of the financial services sector as this is where the real money is. We have already seen asset managers such as JP Morgan, Abrdn , Kohlberg Kravis Roberts and Franklin Templeton announce they are to digitise funds. Back in 2018, the World Bank issued its first digital debt instrument and now SWIFT has recently made an announcement that it has “successfully shown that central bank digital currencies (CBDCs) and tokenised assets can move seamlessly on existing financial infrastructure”. With a financial infrastructure that encompasses over 11,500 institutions globally, does this means that digital assets could be bought, sold and stored on a Peer2Peer basis i.e., without the need to involve a third party? If this is the case, then, as we see the financial services sector digitally transforming its products and services, many firms will need to revaluate their business models - so, could this be the real agenda?

Source: disruptordaily.com

Blockchain technology in sports and e-sports use cases

Athletes may gain from blockchain-based identities by giving their teams and organisations insightful and actionable data. This makes it possible for private performance and medical data to be securely tokenised- on (using a blockchain), making this data accessible and transparent in an immutable fashion - but only available to those who have the correct permission. Information about a player's health, fitness, medical condition and performance can be crucial in player transfer markets. For team-based sports, this information frequently guides choices during transfer periods and has the power to make or break a transaction. Blockchain-powered platforms also make it possible for cross-partner loyalty programs to be implemented, which can encourage greater fan involvement. This can include special items and merchandise and more bespoke experiences, thus offering greater value for fans.

Ticketing 

Fraud and counterfeiting are major issues for sporting events. Ticketing should benefit from blockchain technology which lends itself agreeably to asset ownership - and a ticket is an asset. With the help of this technology, tickets may now be securely kept on a blockchain and able to identify their rightful owner. Digital tickets are another blockchain use case for e-sports and the sector within sport that uses non-fungible tokens (NFTs). Token fraud may soon be an affair of the past thanks to blockchain-based sports tickets that can be issued as unique, cryptographically and mathematically provable, and are immutable.

Rights (broadcasting and player rights)

Given the global interest and demand for many sports, the TV/internet has ensured that acquiring and using broadcasting rights requires enormous sums of money. For rights holders to track the rights they have leased, blockchain technology offers one way to tackle this situation. Recently, Paris Saint-Germain’s 23-year old striker, Kylian Mbappe, refused to have his picture taken with the French football team as he did not want his image to be associated with online gambling and fast food. Resultant from this is that the French FA has agreed to review the situation, and quickly, as the football World Cup approaches - thus demonstrating the importance of rights management. Additionally, digital assets can be used to make payments for the owners of these broadcasting rights in a more transparent and efficient manner. Online user authentication will become simpler and many of the current third parties will no longer be required, so helping to reduce costs for all parties. 

Unsurprisingly, player transfer contracts require careful attention to detail as typically in each such contract is the analysis of a player’s rights when joining a new club. Now, players will be able to have their club contracts supported by immutable smart contracts, potentially replacing paper-based ones. Additionally, royalties due for a player's name, trademark or picture may now be cryptographically secured in a digital fashion. In the incidence of an asset being sold, players can automatically receive a royalty payment on branded goods or collectibles thanks to non-fungible tokens (NFTs). It is also possible to program NFTS using smart contracts embedded into them so when a NFTs are resold, the player and/or their teams will automatically be paid a percentage of secondary sales. In effect, this can generate on-going royalty incomes - not dissimilar to those already enjoyed in the music and film industry.

Anti-doping

Despite the fact that performance-enhancing substances are illegal, doping is still a major problem in a variety of sports - with many often being plagued by scandals. The use of blockchain technology could be an additional tool in helping to protect sensitive data and ensuring greater transparency. Results that have been verified could be preserved and shielded against alteration.

Player and club participations

The blockchain offers specific ways to invest in sports teams, stadiums or athletes. Small investors will now be able to acquire a share in their favourite athlete or team as a type of a crowdfunding platform. The return might be a set percentage of the athlete’s or club’s future income. Due to the blockchain's ability to identify the true owner, the shares in this asset can even be exchanged in a secondary market whereby offering a degree of liquidity which may be helpful if the teams need to raise further capital at a later stage.

Fan engagement

Additionally, the blockchain is perfect for increasing fan involvement. Clubs will now have the ability to design distinctive tokens, which can be used for a variety of fan-related activities and are regarded as valuable assets. Ranging from access to restricted content, utilise these tokens as a means of electing a new club manager or perhaps making a club-specific purchase, or enrolling in a loyalty program - there are countless options. The blockchains are able to control and record every vote and transaction. With the aid of Socios.com, a few clubs which have already begun to do this include Juventus and PSG.

Sports betting and gaming

According to Statistica, it is estimated that the worldwide market for sports betting exceeded $203 billion in 2020. Due to the nature of the technology, blockchains can cost-effectively and efficiently streamline this vast business. Real-time sports betting is now possible thanks to blockchain technology in the sports sector. Furthermore, prizes may be paid directly to a wallet in a matter of seconds since smart contracts can be issued and executed almost immediately. Additionally, because smart contracts do away with the need for a third-party middleman, customers may save on typical brokerage costs and simply pay for a gas fee only.

Sports collectibles

Verifiable authentication of artifacts and collectibles has been one of the predominant ways in which blockchains have been utilised to date within the traditional sports sector. Clubs and organisations can safely offer products to their supporters without the need to use middlemen. For example, Manchester City FC has issued a range of digital art collections, whilst the Hong Kong fencing team earlier this year partnered with local citizens that owned bored Ape NFTs to act as horary advisors of the Hong Kong fencers

Source: Gold4HK

Such initiatives offer supporters a new way in which to express their devotion to and support for a club. Each piece of branded memorabilia or collectible may have its own digital identification thanks to blockchain technology - by scanning a QR code, customers and fans may see the validity of a product or outfit. Additionally, this can confirm the maximum supply and show a history of past ownership, hopefully underpinning its value in turn.

So, when adopting blockchain technology in the sports industry there are several choices. Each one provides an improvement or alternative to established infrastructures which can be advantageous to athletes, their clubs and spectators. There has been considerable interest by a wide range of sports in many jurisdictions, but arguably the sports industry is still exploring and finding new ways in which to commercialise the use of blockchain technology and digital assets.

Source: economictimes

What is the metaverse?

The term ‘metaverse’ combines the terms ‘meta’ (which means ‘beyond’) and ‘verse’ (which means ‘universe’) to simply mean ‘beyond the universe’. The phrase, "Virtual Reality space in which users may interact with a computer-generated environment and other users”, may be used to define the metaverse.

Metaverse transforming the e-commerce landscape

There is a widespread belief that this futuristic technology represents the mobile internet of the future and, for people not taking it seriously, they could find their competitors able to steal a march over them. The attention of regular internet customers has already been aroused, encouraging brands and online merchants to enter this new digital frontier. Unsurprisingly, online shopping has increased dramatically over the past several years thanks to the World Wide Web. According to Statista: “The overall number of digital shoppers globally increased by over one billion between 2014 and 2021, and this growth is anticipated to continue”. It could even be argued that our lives are now simpler than ever thanks to a successful entry into the digital age where technology is ever developing and replacing old processes. And now blockchain, NFTs, virtual reality and virtual money have evolved as recent technical breakthroughs, in turn anticipating a more immersive online experience - the so-called ‘metaverse’. Moreover, Web 3.0 is also just around the corner. So, with the metaverse already taking shape, businesses and brands should anticipate some of the following changes in order to be a part of the new e-commerce landscape:

• innovations in AR and VR 

The most recent incarnations of interactive content that companies are pursuing to offer cutting-edge experiences are augmented and virtual. The predicted compound annual growth rate (CAGR) for the worldwide market for augmented and mixed reality is 79.2% - to be worth over $100billion by 2026. For instance, Amazon has developed a program called Room Decorator that enables users to see furniture in their own rooms. Elsewhere, customers may browse Charlotte Tilbury's online store at their convenience. Nevertheless due, in part, to the large and expensive hardware and technology needed to participate, we are yet to fully realise the potential of AR and VR. However, companies such as Meta are already providing VR headsets and related technology at ever-lower prices, indicating that these technologies will become more widely available and eventually gain critical mass acceptance.

• tailored experiences (personalised shopping) 

Customised client experiences are gradually taking over as essential components of increasing consumer loyalty. But, even as e-commerce and technology advance, personalisation frequently ends at product recommendations and exclusive member discounts. However, businesses which see the potential of giving customers improved on-line experiences have now developed cutting-edge, digitally empowered selling strategies. Nike is one such instance. Nike consumers will soon be able to style customised items (such as virtual footwear and clothing according to their tastes) after investing in the metaverse, so moving forward with these tailored virtual experiences. The metaverse would be able to help increase customer trust in a product whilst maintaining the best speed and access by fusing the concrete experience of buying in a real store with the unmatched convenience of e-commerce. Forget about viewing prepared images of models wearing clothing - the ability for avatars to try things on in the metaverse could potentially strengthen the emotional bond between the customer and the product. Inadvertently, this would lower shipping costs and returns for retailers thus driving margins higher and supporting ongoing investment in the metaverse.

• tight-structured community 

Customer buzz and referrals could significantly impact a brand's performance in comparison to other types of marketing. Companies have long begun to establish a social media presence after realising the value of community-building activities. The gap between social media and e-commerce is yet to be closed, and the metaverse could provide the ability to bridge it. Social evidence in the metaverse will go beyond positive social media tags and reviews with five stars. Customers' real-time interactions with companies and other fans are made possible by the devoted following that has been established.

Source: Insiderintelligence

• expanded social commerce

According to a report from accenture.com: “By 2025, it's expected that sales of goods purchased directly through social media platforms will total $1.2 trillion globally.” Similar to how businesses are implementing the tools to permit direct purchases on Facebook, Instagram and TikTok, the metaverse is likely to feature new marketplaces in which to conduct business. Although it cannot be said for sure what those platforms will look like, companies will certainly require the necessary technologies to keep their social stores updated with the most recent inventory and e-commerce info. To guarantee that clients receive the finest service on the platform of their choice, brands should also be ready with chatbots that can offer customer care, right within the social media platform. 

• dynamic online shops 

Online shoppers will be able to interact with items in real time from the comfort of their homes, thanks to the metaverse. Customers will be able to explore, buy and engage in a digital storefront - fundamentally changing how people now think of virtual and real businesses. Additionally, e-commerce in the metaverse will eliminate many of the physical restrictions currently present in commerce. Brands wanting to implement an omnichannel strategy will be able to synchronise experiences on all channels - from e-commerce to social media - if expenses are kept as low as possible.

Consequently, the next decade will probably witness several iterations of metaverse growth. Without doubt, organisations should be preparing for this next era of online interaction without delay by investing in AR, VR, social commerce and those other platforms that allow for seamless, multichannel and customised experiences. Those companies able to create a coherent metaverse strategy more quickly than their competitors may dominate this new market by their first mover advantage. Yes, unquestionably there are challenges in terms of the adoption of any new approach in doing business. There are new technology skill and market strategies that business will need to develop, and management will need to be ever more agile and flexible in finding capital - likely to be a challenge against a slowing economic back drop. However, the metaverse could potentially create a new type of economy and marketplace and it could certainly prove to be a costly mistake to ignore this, especially as we see more global brands engaging and transforming their business models.

Source: ledgerinsight.com

Types of digital assets include (although are not exclusive to): websites, photography, audio-visual media, logos, illustrations, presentations, spreadsheets, digital paintings, word documents, animations, electronic mails, and a variety of alternative digital formats and their individual metadata. The amount of various forms of digital assets is exponentially increasing thanks to the rising number of devices that are conduits for digital media, and particularly the expansion of the digital space - for example, smartphones. Due to explosive growth of software applications in the 2000s, vast diversity of user touch points and the rise of blockchain-based assets, the digital assets universe is growing.

What happens to digital assets if the owner dies? (and you don’t have the password):

There are many instances of digital assets being lost forever, the moment the owner dies and does not leave a clue of a password behind for accessibility. Digital assets management is a core issue to consider since management of digital assets does not only involve how well you hold and store your assets when you are alive, it also covers whether or not your assets will be accessible when you die. In 2019, it was reported that when the CEO of QuadrigaCX, Gerald Cotton, died, this resulted in the company’s customers' cryptocurrency assets being unobtainable since no one else had access to the password of the company's cold wallet. Resultant from this was that customers of Quadriga lost entire life savings.

Source: techcrunch.com

How can a dead man’s digital asset be recovered?:

The new generation of digital assets, which includes non-fungible tokens, cryptocurrency, tokens, tokenised assets, security tokens and central bank digital currencies (except the Chinese CBDC), are all based on blockchain technology which may pose great danger if the password to access a digital wallet is lost. It is advisable for those who own digital assets to set up a ‘dead man’s switch’ so that assets can be accessed in case of emergency. If you don't possess cryptocurrency yourself, chances are you are related to someone who does. About 16% of American adults say they have used cryptocurrencies and it seems that the % of people owning some form of digital assets is set to increase. Cryptocurrencies are no longer new but remain exciting, and many people certainly do not wish to miss out on what could be the next big investment trend - such as Web3, NFTs and decentralised autonomous organisations (DAOs). But new crypto investors do not necessarily think about what might happen to their digital assets in the event of an untimely death. This is bad news for many since currently there is no established way to ensure the passcode is passed on to the next relative. Without a plan, owners of digital assets can die and leave their heirs with no way in which to recover or obtain access to their assets.

Source: CipherTrace

Cryptocurrencies are typically stored on a blockchain, this being a digital ledger formed by a network of computers around the world to record transactions (including the exchange of cryptocurrencies). People usually make these transactions using public and private keys. The public key acts like a bank account number and acts as an address that you can use to send cryptocurrency to others. The private key functions as a password and consists of unique, extremely long strings of characters to unlock your cryptocurrency. However, unlike other types of passwords, private cryptographic keys cannot be recovered once they are lost or forgotten. This means that without these keys, people who have the right to inherit the cryptocurrency from their relatives will not be able to obtain it. 

Can lost or stolen cryptocurrencies and digital assets be recovered?

Cryptocurrencies have long been a target for cybercriminals, whether it's directly hacking your wallets or attacking exchanges. If your digital assets weren't hacked from a wallet, but you have been scammed, check out the Cryptocurrency Scam Guide. Once your digital assets are stolen, it is very unlikely that you will get them back. In theory, it is possible to track your stolen digital assets by monitoring the appropriate blockchain - however, in practice this is difficult due to both the anonymous nature of the currency/assets and the fact that thieves are very likely to use a cryptocurrency exchange to instantly exchange your assets for cash. However, digital assets leave a trail and you may be able to trace the identity of the criminal. According to comparitech, “the biggest cryptocurrency hack so far happened in 2018 and the amount stolen was estimated to be around $532 million.” Note that securing your digital assets is advisable, which is easier than losing them and then trying to recover them i.e. prevention is better than cure. Companies, such as Safe Haven and Casa, fundamentally permit human beings to fasten their crypto keys inside numerous layers of other private keys that could then be made available to numerous human beings. Whilst this technology is meant to make crypto inheritance easier, it may additionally result in a few complex procedures. There are also cases of having your digital assets stored on exchanges such as Binance, Coinbase and eToro which, when the owner dies, the assets may be claimed if the beneficiary can tender a proof of ownership.

Source: chainalysis

Tracing and recovering stolen or lost digital assets presents a chain of challenges and, following the quality asset recovery rule, in this context it might not yield fruitful results. However, inventive and capable use of existing legal tools and remedies (obtainable underneath each economic condition and non-insolvency law) may produce a pathway to realising recoveries for creditors and victims. Digital assets investors should take the necessary step to make their token accessible to their relatives in case of untimely and unexpected death. As we see more people using digital assets, whether that be using digital currencies or investing in digital mutual funds, the issue of how they are stored and ultimately passed on to beneficiaries will become increasingly important for more and more people.

Environmental, social governance (ESG) is “an approach to evaluating a company’s corporate social and environmental credit score compiled from data collected and related to the intangible assets of a company”. The social credit scores that are provided rank companies’ impacts on the world - for instance, pollution and modern slavery. Furthermore, the significance of ESG in determining the value of a company is gaining greater importance and attention from staff, clients, suppliers and shareholders. Globally, the value of assets now invested with an ESG mandate is estimated to exceed $53 trillion by 2025.

ESG-mandated assets are projected to be 50%+ of managed funds by 2024

Source: Deloitte

As mandatory corporate and sustainability reporting becomes common, accurate and verified documentation to support transparency becomes essential to satisfy various parties. Therefore, to comply with ESG standards, blockchain technology has increasingly been seen as valuable tool to help in verifying an organisation’s ESG credentials: 

• data reporting - access to accurate, standardised information is key. Blockchain-enabled reporting tools allow companies to collect verifiable data and produce trustworthy reports which demonstrate their ESG credentials. Blockchain enables data standardisation whilst also providing the platform needed to support data transparency. The automation of data collection can be braced with other digital technologies, which allows various devices to communicate with each other automatically and share data and information without the need for human intervention. For example, to reduce the global carbon footprint companies are able to report the entirety of their emissions through a single blockchain platform thereby making a standardised space for data to be collected and tracked reliably, and consequently allowing for meaningful measurements.

• supply chain transparency - an essential part of achieving the EU's sustainable goals is by improving supply chain sustainability. Blockchain technology shows the potential to transform supply chain management creating a database to record the transactions along the supply chain and bringing transparency, efficiency, traceability and reliability to supply chain management. Blockchains, coupled with Internet of Things (IoT), can automate data collection across different points of a company’s supply chain. This automation and real-time availability of information also helps companies detect issues faster and reliably trace the problem back to the source. Blockchain-powered platforms play a role in terms of responsible and ethical sourcing. The transparency it provides is crucial in tracking the materials and goods from source to end-use and helps ensure security for all participants by allowing them to access the records of transactions. This feature is particularly important when supply chains are global and can be complex, involving many different parties. 

Companies which are taking advantage of blockchain to support their ESG credentials:

As one of the leading energy companies in the world, Shell recently embarked on an ambitious energy transition agenda in a bid to move away from the use of fossil fuels and towards green and sustainable energy. It aims to reach net-zero carbon emissions by 2050 or sooner, and reduce emissions by 50% by 2030. To do this, Shell is leveraging game-changing technologies, such as artificial intelligence (AI), the internet of things (IoT), Web3 and blockchain. Blockchain's decentralised and tamper-proof nature makes it an attractive technology for global organisations such as Shell, which need both hyper-secure and scalable technology solutions to pilot a new generation of applications involving gathering and sharing of valuable data. Shell has created a blockchain-based system that can demystify the complex web of sources. 

Also, to ensure all-day consumption of green energy, Shell is creating highly granular certificates in real-time at the source of where the energy is generated so as to represent green energy produced every half hour. Every point of that electron’s journey, from production to consumption, is tracked and recorded on a blockchain. Aiming at increasing the availability and use of sustainable aviation fuel, Shell is collaborating with Accenture and American Express Global Business Travel to work on a new project, Avelia. This is one of the first public blockchain solutions that creates a credible and transparent way to help decarbonise the aviation sector.

The beauty sector:

For the beauty industry, which has a long-time dependence on agricultural ingredients (production practices for which have often not prioritised sustainability), hazardous chemicals, eye-catching packaging and constant replenishment, the adoption of sustainable values is particularly challenging. Unsurprisingly, the industry has recently been under pressure from both consumers and regulatory authorities. Regulators are vowing to tighten up regulations following reports of mislabelling of ESG investment products whilst consumers are also becoming more educated about ‘greenwashing’. As the demand for transparency increases, the sector is being compelled 'to do more' and to provide the evidence. Some beauty brands are considering the potential of blockchain as a tool to improve transparency whilst some have already adopted the technology. For example, in 2019, Provenance joined forces with British e-tailer, Cult Beauty, to provide “proof points'' on the product pages of participating brands. With these, customers can examine and compare claims made by brands (such as easily recyclable packaging or cruelty-free status) with the confidence that the information is unedited and has been independently evaluated, since it is in the blockchain. Positive Luxury is also using blockchain to improve transparency and to make it easier for brands to track their progress. This London-based firm accredits ESG efforts through its Butterfly Mark and Diana Verde Nieto, its co-chief executive, has said: “With our blockchain and QR code-powered pages, our portfolio brands will have an easy dashboard that will show them where they’re at, and the return on their sustainability investment”. 

Drawbacks to using blockchain to enhance ESG credentials: 

There has been much negative press regarding the vast amounts of energy used to power the Bitcoin blockchain. When Elon Musk stopped accepting Bitcoin as payment for the Tesla Range, he stated that: “Tesla would stop accepting the cryptocurrency as payment because the so-called mining of the coins used too much fossil fuel-generated electricity.” Even with the current dip in the cryptocurrency market, a single Bitcoin is worth around $23,500 but there has, however, been awareness of the impact on the environment when investing in Bitcoin. Given these environmental concerns surrounding cryptocurrency and the increasing importance of ESG, an appropriate question to ask is if these two developments are compatible. According to the University of Cambridge Centre for Alternative Finance, Bitcoin mining consumes more energy than the UAE or the Netherlands. It consumes about 0.4% of global energy and up to 150 TWh of electricity per year. This immense energy usage has generated much concern, especially as the focus on climatic change increases. Another consideration is the social plan, since blockchain and ESG both conflict with this. The social component of ESG includes human rights, diversity, financial inclusion and consumer protection. Although blockchain protects the vulnerable from oppressive governments and permits the purchase of cryptocurrencies by interested individuals (thereby promoting financial inclusion), it may also promote illegal conduct, such as evasion of exchange regulations and tax fraud. Also, the exchanges on which cryptocurrencies transactions are made are poorly regulated - leverage is provided by a shadow bank that is not regulated as a bank - and this may violate consumer protection. Due to its loose regulatory and enforcement structure, cryptocurrency is appealing to those people who want to boycott the network of regulations and fines that control traditional currencies and financial markets. Its decentralised nature and pseudo-anonymous structure make it a useful tool to avoid financial sanctions. 

Conclusion:

The increasing interest and popularity of blockchain has brought light to the various impacts it has. It is a technology with far-reaching possibilities. Although there are certain incompatibilities and challenges, there is however the potential for digital assets and blockchain to assist a green transition and address ESG concerns. 

The hype built around NFTs makes it difficult for some to have an understanding, and many others get the wrong idea about these digital assets. For instance, some think of it as a Ponzi scheme and struggle as to why NFTs have attracted the interest and money that they have to date. The below table shows the total turnover of those NFTs that have been in excess of $0.5billion, as well as showing the numbers of buyers and number of transactions todate.

NFT collection rankings by sales volume (all-time)

Source: Cryptoslam

A brief explanation of NFTs is that they are unique codes which prove ownership of assets using blockchain technology. Anything can be an NFT, be it pictures, songs, videos, contracts, tickets, even data such as details about your home or your vehicle. NFTs have diverse use cases and are being used globally by different industries in many jurisdictions as well as major brands such as Adidas, Nike, Hermes. Below are some of the different uses for NFTs:

• to sell tickets directly to people

• to help content creators connect with their audience

• for the identification and verification of health documents

• for the representation of academic credentials at a time when falsifying academic records is still an issue.

• for deployment across a supply chain

• in artwork tracking

• to transfer and record the ownership of properties - this covers intellectual and landed properties and patents.

With the different types of NFTs being established, it should be noted that there are many NFT marketplaces - i.e. some are niche-focused, whilst others are general marketplaces. The biggest NFT site is OpenSea, which has seen its value rise to be worth over $13.billion compared to only $1.5billion six months ago.

NFT landscape

Source: NFT TECH

Other significant NFT platforms include:

• Rarible - with a ‘Spotify-like’ layout, this NFT marketplace is primarily focused on digital collectibles. RARI is the governance token here

• Crypto.com - this allows users to trade digital collectibles from brands and celebrities

• Foundation - with over a year in operation, most viral meme NFT sales, such as Pak’s Finite, Nyan Cat, etc, happened on Foundation

• ZORA - a decentralised auction focused on helping artists take back the value which most brands, labels, or galleries take traditionally. Zora is built on ERC-721, which is the common standard for NFTs

• SuperRare - this is a P2P marketplace focused on the trading of single edition artworks

However, unsurprisingly, there are both advantages and disadvantages of dealing with NFTs.

Advantages:

• easy authenticating and record of ownership

• NFTs can generate on-going income for the owner of intellectual property (IP) - similar to music royalties - as each time the NFT is re-sold, the creator can earn a % of the sale price

• marketplace efficiency

• since NFT stands for non-fungible tokens, the non-fungibility aspect makes them irreplaceable

• profit potential

• fractionalisation of ownership of physical assets

• NFTs offer a new way to have greater diversification in an investment portfolio

Disadvantages:

• uncertainty in value as the purchase does not always translate to ownership of the copyright 

• NFT prices are volatile and can be illiquid

• the value that comes with owning actual physical art means it cannot be digitised

• from an environmental standpoint, some blockchains can be energy intensive - this has serious implications for the environment

• NFTs can be used fraudulently with people selling them without the owner of the IP being aware

• there can be legal challenges as to what rights an NFT confers

Some feel NFTs, will fizzle out as it is thought to be a Ponzi scheme. However if anything, we could see NFTs being used in the metaverse - which is something Citigroup believes could be worth up to $13trillion by 2030 alone. Art has only ever been worth the value its collectors and proponents place on it. When recently talking to Jai Patel, CEO of Kasei Holdings, (quoted on the AQUIS exchange and managing a portfolio of cryptos), he explained that: “NFTs can be seen as similar to car number plates. The most expensive number plate for sale is in California MM selling for $24.3million and you cannot even see it when you are driving your car. But is does have an NFT etched on the back of the number plate. Then again if you are able to afford $24.3million for a number plate you may are possibly not driving but being chauffeured”. 

NFTs have captured the imagination and indeed the headlines as with any asset class it has also attracted its fair share of nefarious characters. In essence we are only really beginning to understand how NFTs can be used in a variety of situations, yes there are legal challenges such as the potential court action between Rothschilds and Hermes. However, these concerns do not appear to have dissuaded luxury brands from being involved with NFTs as can be seen by the recent announcement in the F1 world as Mercedes looks to issue NFTs with FTX at the Miami Grand Prix. However, regardless of this, if you plan to invest in NFTs, do so responsibly to avoid being financially, mentally and emotionally bankrupt yourself and try to avoid the brouhaha and fancy marketing campaigns.

Source: Coingape

The Merge is a welcome development in the crypto industry as it ends the energy consumption of a number of crypto critics and sceptics. Some have even hoped the Merge would have a ‘Midas touch’ effect in the broader crypto market. Bitcoin has been bearish for a while, struggling around the $20K - $25K mark. Meltem Demirors, the chief strategy officer at Coinshare, feels the Merge has no significant addition to Ethereum. In an interview on the 22nd of August with CNBC, she stated: “While internally there’s a lot of enthusiasm within the crypto community and Ethereum community around the merge as an event that will dramatically reduce supply while potentially driving demand. One of the realities on the macro side is people are worried about rates”. Her concerns about the Merge do not end there as she sees some stagnancy in the future of the network, adding: “I don’t think there’s a lot of new capital coming in to buy Ethereum on these changed fundamentals and technical. There’s also some risk that needs to play out with the market”. Meltem sums up the Merge as a “buy the rumour, sell the news” event. Regardless of this though, news about the Merge sent the crypto market on a short-term upward spiral in July 2022. However, data provider, Kaiko, reports that “ether’s price fall on the 19th of August brought a swift decline in open interest on derivatives - contracts that traders used to leverage bets on the future price of ETH”. Although many derivatives trades were liquidated owing to margin calls, this didn’t last as money flooded back into the ETH futures market - a significant spike in open interest. Furthermore, Coindesk notes “that ether’s perpetual contracts funding rates have significantly fluctuated; this resembles future “contracts on commodities but without expiration dates.”

The timetable for the Merge

Source: Ethereum

Many proponents of the Merge feel Ether futures will experience contango after the coalescence. This is because the Merge will reduce the supply of ETH, whereby increasing the demand for it and dragging the price upwards in the process. The director of research at Arca, Katie Talati, also agrees with this: “Ether’s real price appreciation will happen after the Merge, driven by increasing ETH locked up staking/securing the chain.” Specialised crypto asset trading company, Cumberland, projects $40million worth of miners being removed from the market, causing a 90% drop in yearly issuance. For miners, the Merge has not been taken lightly as there have been pushbacks from some of them. Several have proposed splitting the ETH chain, allowing the current PoW to continue post-merge. If this is permitted, ETH holders on the Merge will receive free forked PoW tokens. Interestingly, Coinbase launched its cbETH-wrapped Ethereum staking token ahead of the token and Binance has moved to allow ETH holders to withdraw assets from the exchange from the two forks. For stakers, the annual yield is expected to double its current 4% and this could jettison staking. For ETH holders wondering what they have to do in anticipation of the Merge, there is nothing expected of them. There is the possibility of mob actions taking place, whereby defeating the idea behind decentralisation. So, on balance, what does the Merge mean for the Ethereum blockchain? Binance has highlighted five myths regarding the Merge:

• the Merge will create a new token - the answer is, no

• gas fees will decrease - however, sharding, is due in 2023 which aims to address gas fees by reducing network traffic and splitting the blockchain into smaller, more manageable parts

• transactions will become faster - transaction speeds will be a little faster: Ethereum Mainnet’s takes 13 seconds, Beacon Chain’s takes 12.2 seconds 

• stakers can withdraw their rewards after the Merge - those who have staked ETH will not be able to take funds for 6-12 months after the Merge

• Ethereum will suspend its network - it is expected there will be zero downtime. 

Some believe it is positive as it means less energy will be required to process and register entries on the Ethereum blockchain. As ever, there are various opposing views as to the impact the Merge will have on the price of ETH - some bullish, some bearish. As the date for the Merge to take place draws near Consensys has issued its summary of the impact that the Merge will have on institutions which was only released on 5th September, which you may find useful.

How blockchain will transform real estate

Source: Datadriveninvestor.com

Advantages of using blockchain in the real estate sector:

• Real estate assets and property management: Tokenisation refers to a method by which sensitive information is replaced by a surrogate value, referred to as a token. Tokenisation of real estate assets according to Alphapoint “is the process of creating a digital asset that represents a single property or portfolio of properties on a blockchain-based system”. Essentially, property house owners can split their assets into tokens, which enables partial ownership of a property. Therefore, you’re not obliged to purchase the entire property at once, and using tokens makes it cheaper for users to diversify investments and gain equity. Tokenisation also offers the promise of improving liquidity since one can resell tokens through secondary trading on a digital exchange.

Three benefits of using blockchains for land registries

Source: whitecase.com

• Blockchain-based smart contracts: a smart contract is a self-executing contract outlining the terms of the agreement between a seller and a buyer which are written into lines of codes. Letters of intent, listing agreements, offer sheets and closing documents are examples of contracts which may become digitised on blockchains. Using smart contracts rather than paper contracts can considerably speed up the real estate transactions. 

How smart contracts work in a simple property sale

Source: whitecase.com

• Property search using blockchain-enabled MLS: in many jurisdictions real estate is transacted using Multiple Listing Services (MLS) for accessing the details of a property. The property listing on MLS provides significant and applicable information such as the location, features and availability of the property. MLS that use blockchains could change the listing data to be distributed across a peer-to-peer network, making the information more trustworthy and accurate. A public blockchain-based MLS could enable information about a property at a much lower cost.
  
  

• No intermediaries: according to a report by Deloitte: “Lawyers, brokerages and banks have long been a part of the real estate ecosystem. However, blockchain could shortly begin a shift in their roles and participation in realty transactions.” Blockchains can potentially remove intermediaries, thus saving fees on commissions and costs charged by the intermediaries. This additionally offers the promise to speed up the time it takes for the title on a property to be transferred from the seller to the buyer. 

Source: ButterflyMX.com

• Liquidity: real estate has long been thought of as a non-liquid asset since it takes time for sales to be completed. However, by tokenising real estate using the growing number of digital exchanges, these tokens backed by real estate can potentially be traded 24/7.

• Costs reduction: the transparency related to a decentralised network can also reduce costs of executing a property transaction and, in time, we may well see each individual property creating a digital certificate unique to the actual property - not unlike an NFT. Information about the property, such as land search, insurance (e.g., claims for subsidence), any liens on the real estate, etc, can then be checked quickly. A record can be stored of what was checked and when and also highlight any issues that need further manual investigation/clarification. 

• Platforms and marketplaces: real estate technology has been primarily concerned with listings and with connecting buyers and sellers. However, blockchain introduces new ways in which real estate can be traded and can empower trading platforms and online marketplaces to support real estate transactions. For example, ATLANT is a platform that uses blockchain technology to facilitate property transactions. Other digital exchanges include Archax, Tokeny, ADDX, SDX and TPX. By tokenising real property, assets can then be traded in a similar way as to equities being traded on stock exchanges, and transactions may be done on-line.

There are, however, challenges to using blockchain technology in the real estate sector: 

• certain blockchains are wasteful and expensive in terms of the electricity they consume. 

• the likelihood of human error added to blockchain information may occur; the data that goes into the database has to be accurate as once recorded it is difficult to change.

• there are concerns as to whether or not smart contracts can accommodate the tangled details in property contracts.

• the practical concerns of implementing a stylish technological conception into an intrinsic complex field of law creates a burden on judges, municipalities, attorneys and governments to the extent that the advantages might not outweigh the disadvantages. This is not to say that blockchain technology should not be used but the potential drawbacks should always be analysed and examined before deploying. 

Historically, realtors and estate agents have acted as intermediaries between the seller and buyer of properties since the 1910’s. Having the agent facilitate the property transaction helps establish a tier of trust between both parties, together with the advantage of the fact that agent is skilled in the local and national laws and regulations. However, blockchains are introducing change and ushering a new, more cost-effective and efficient way to buy and sell real estate. On January 9th, 2009, the anonymous Satoshi Nakamoto discharged the first version of Bitcoin and subsequently the blockchain database, and nine years later, in 2018, America oversaw its first ever blockchain based-real estate transaction in Vermont.

Top 10 Cities to be a digital nomad in 2022

Source: International Accounting Bulletin

According to Flex Jobs, remote workers feel they are more productive compared to working in an office and list the following reasons as to why:

• fewer interruptions (68%)

• quieter work environment (68%)

• more comfortable workplace (66%)

• more focused time (63%)

• avoidance of office politics (55%)

There are now forty-four digital nomad visa programs, as opposed to only twenty-one in February 2021, whereby making it increasingly easier to live and work in various locations. Spain has just announced its new digital visa program as it looks to tempt digital nomads (not to its great weather, beaches and food), but by reducing the tax digital nomads will have to pay from 25% to 15% for the first four years. When recently talking to Fraser Edwards, CEO of cheqd and a self-processed digital nomad, his response was: “I obviously expected to enjoy the digital nomad life but the biggest surprise was how much it reduced my stress levels whilst building a start-up. There is something extremely calming about being in a new place and being able to explore over evenings and weekends. This means I’m able to work much more efficiently and thoughtfully than being driven by stress. The main challenge is making sure to have consistent and predictable connectivity otherwise you can achieve the exact opposite, complete meltdown trying to find a connection so preparation and research for your next spot is absolutely crucial!”

Meanwhile, with regards to Decentralised Autonomous Organisations (DAOs), Ethereum defines them as:

• “member-owned communities without centralised leadership

• a safe way to collaborate with internet strangers

• a safe place to commit funds to a specific cause.”

However, not all of the above may be the case depending on the DAO concerned but there is, without doubt, growing interest in DAOs and increasing awareness and discussion of the merits of decentralised finance (DeFi). In essence, DAOs are a new type of business structure using blockchain technology and employing smart contracts whereby removing the need for a centralised command and control structure - such as a board of directors and/or managers. Processes and procedures are voted on and agreed by the community then coded using smart contracts, which are further made available to the general public for all to see (therefore making DAOs very transparent). An example of one of the biggest DAOs is Uniswap which enables peer to peer exchange of crypto currencies built on the Ethereum blockchain. Uniswap is referred to by some as a DeFi platform or a decentralised exchange (DEX), and it deals in 170 cryptos with over $5billion of assets on its platform. 

For now, one of the challenges facing regulators as regards DAOs and DEXs (such as Uniswap) is, what happens when something goes wrong? Who can be held accountable? Since a DAO has no management structure it becomes very difficult to comply with existing regulation. For example, how can a UK-based DAO comply with the Senior Management and Certification Regime (SM&CR) which replaced the Approved Person Regime? And this is assuming that one is able to determine the exact jurisdiction of the DAO itself.  Yet, if DAOs can truly be more transparent and the rules and procedures that they conform to are clear for all to see (by regulators and customers alike), could the use of DAOs actually improve the robustness of the financial services sector? That is, DAOs could remove the ‘fat finger’ errors which have caused many a headache for risk managers and compliance directors in financial centres across the globe. There is no reason why a DAO that complies with relevant financial regulation could not be established, building compliant procedures into the way it functions. Incidentally, DAOs are currently only recognised in five jurisdictions; Wyoming (USA), Malta, Gibraltar, Estonia and Switzerland. 

However, DAOs potentially have a much wider role to play in corporate governance and society as a whole. Talking to Samuel Barlow, founder and CEO of Loop, who has been looking at how technology is able to potentially improve governance, he has said:  “DAOs are in their early days, and we are discovering many issues around governance from a macro and a micro level. This is what is wonderful about this moment in the evolution of DAOs. The potential for coordinating and enabling humanity through these shared responsibility approaches is enormous. Only time and effort will lead to strategies for decentralised governance to work optimally. This is especially highlighted with the ever-increasing number of people working nomadically and internationally. If our knowledge and wisdom is becoming more mobile and international, then it only makes sense that our governance approaches should follow accordingly.” 

DAOs offer an alternative community governance for any organisation

Source: Crypto Report 2022

Already there are examples of DAOs being used in cities as a way to offer greater transparency of how citizen’s funds are being used - such as CityDAO and YIMBYDAO. Research affiliate at Stanford University’s Digital Economy Lab and Columbia Business School, Christos A. Makridis, believes: “DAOs can refocus people in cities on the principles, goals, and concepts that unite them…DAOs allow people to communicate, vote, and supervise easily through smart contracts… Soon, DAOs may well become one of the most effective ways to govern cities and bring people together in authentic community.” We are already beginning to see countries issuing digital visas vying to be the most attractive jurisdictions in order to attract well-educated, digital nomads and companies, so that governments can generate additional tax revenues. A significant driver that is likely to further fuel interest in decentralisation is the growth of Web 3 - that is, the metaverse often harnessing the power of DAOs to create board-less, global communities. As the World Economic Forum has summarised: “DAOs promise new forms of organization structures and collaboration in the digital and global space. As significant digital value is created, through non-fungible tokens or the metaverse, DAOs could be the native entity for value creation in cyberspace”. 

This trend to digital decentralisation is undoubtedly changing the way we work and impacting the way organisations and potentially society are being structured and governed. Authoritarian governments are likely to be less supportive of DAOs since they offer a threat to being able to control their citizens. However, as national boarders break down (due to the expansion of the digital economy), it may well prove to be a real challenge to exclude citizens from engaging in DAOs.

The use of blockchain technology has made it possible to improve the quality of the food supply chain and enhance the trust between the customers, retailers and farmers by constantly tracking the source and sustainability of various foods.

Source: Disruptordaily

As a reliable method of storing data, blockchain-powered platforms enable the facilitation of various information-driven innovations in order to herald a new era of smart farming. Using smart contracts, it is possible to automate many processes and can enable transactions between various stakeholders in a timelier fashion.

Concerns about blockchain in farming or agriculture 

Since blockchains rely on controls set by private organisations, it is easy for erroneous people to manipulate them to their own advantage. Unsurprisingly, privately-owned blockchains are less secure and easier to tamper with. Furthermore, small-scale farmers who do not have the required size, technological know-how and scale to apply blockchain technologies may be left behind. There are also concerns that blockchain technologies can be misused or abused and culminate in undermining food security.

SABIC launches blockchain pilot project

Saudi Primary Industries Company (SABIC), a Saudi Arabian chemical substances producer, recently launched a blockchain pilot venture together with the expertise agency, Finboot – with the objective to  examine the determine how  blockchain technology is able to offer end-to-end digital traceability of feedstock. The current technique of tracing the journey of feedstock is made arduous by the complexity in the petrochemical and chemical industry supply chains. SABIC’s blockchain pilot believes it will be possible  to reduce prices and time, enhance knowledge integration, reduce administrative efforts associated with the certification technique of supplies. Finboot’s ‘MARCO’ software program will track the product from where it is produced to SABIC who convert the base product into its round polymers. The supply of round polymers to Intraplás, a manufacturer of plastic laminated goods and packages for the food industry, for conversion into its packaging options will then also be able to be tracked.

Ucrop.it is an Argentina-based ‘agri tech’ company that tracks farmers’ sustainable practices on its blockchain-enabled platform. It creates ‘Crop Story,’ a blockchain-recorded data and information record that traces the farmers’ sustainable practices and helps them leverage their sustainability performance to access credit facilities from lenders. Ucrop has raised $3.1 million and is using blockchain to solve the differentiation between conventional commodity crops and climate-smart ones in an efficient, decentralised, digital and scalable way.

Vertical farming is a means of advancing the controlled environment of a modern commercial greenhouse. Through stacking plants vertically on shelves or tall pillars, vertical farming enables 10 times the yield for a given land area. Plants are grown in a completely enclosed environment, with LED lights instead of sunshine and closed-loop water recycling. A vertical farm can fit the equivalent of 250 hectares of farmland into a building the size of a large supermarket and, by utilising the artificial day length and season, it can produce crops all year round. In vertical farming, automation, data, sensors and other technologies are essential to its success and hence this type of farming may even have more use for blockchain as a result.

Relevant here is that blockchain’s tracking ownership records and tampering prevention functions can be used to solve the pressing challenges in the current food system. Integration of the two (blockchain and vertical farming) would undoubtedly help to improve the agriculture industry and livelihood of millions around the world. The pairing of vertical farms and blockchain is to apply the distinctiveness of the decentralised structure of the blockchain to ensure proven products and production practices, thereby enabling a transparent marketplace for high-end products. Most critically, the right pricing will also balance market pricing for vertical farms while creating a healthy ecosystem.

Martian Farms is combining vertical-farming and LED-light technology with blockchain traceability to improve productivity and reduce labour. The proprietary LED technology being utilised uses up to 99% less land and 98% less water than traditional methods. It aims to meet the need for nutritious food with cutting-edge processes to grow local, sustainable, zero-pesticide produce that is particularly productive and efficient (using some NASA-inspired technology), whilst blockchain provides the required traceability on every product from seed to sale.

Some benefits of vertical farming

Source: Martian Farms 

The Trellis protocol is the first on-chain network of hydroponic farms helping cities reclaim food sovereignty by funding, building and operating high-tech vertical farms which grow produce all year round using 95% less water  and space. Trellis functions on three key technologies: hydroponic farms, decentralised autonomous organisations (DAOs) and agricultural cooperatives. They work together to allow cities to efficiently grow their own food indoors (saving 95% of the water and space compared to traditional farming), replacing traditional institutions with decentralised protocols and enabling small-scale farms to work together to leverage the unit economics of the enormous corporate farms which dominate markets. Trellis aims to help the average person own part of a vertical farm whilst also making hydroponic vegetables more competitive with traditionally grown produce. By combining agricultural cooperatives, hydroponics and blockchain, Trellis seeks to open vertical farming up to everyone whilst pioneering a disruptive model for the future of food.

However, although blockchain has great potential in agriculture, there are still many issues to be addressed before the technology can truly be integrated into the agricultural world. The implementation must be decentralised and all-inclusive, involving the rural people and small farmers, and it must allow equitable and sustainable food systems so that consumers can make informed decisions.

Recently, in a bid to build a digital wallet for the metaverse, Facebook rebranded its online payments service, Facebook Pay, to Meta Pay. This vision improves its interoperability and aligns the firm's payments offering with its grand ambition to build the ultimate metaverse. In 2021, $10 billion was raised by metaverse-related companies,  surpassing as much as twice what they had raised in the previous year. Citibank believes the global value creation opportunity from the metaverse could be as much as $13trillion. In previous articles, we have looked at how the metaverse influences society and commerce and in this article we will be discussing the opportunities of the metaverse for Muslims. 

Shariah-compliant metaverse

Shariah operates on the principle that "everything is permissible unless there is a clear prohibition." Technology, no matter how new, must be innovative, creative and, most of all, beneficial for humanity. Shariah is about adding meaning and any activity performed by a Muslim should be about meaning. Earning money or using technologies, in themselves, are not prohibited, but they have to be done in an honourable way - without harming or cheating others. This shows the importance of engaging Shariah experts in the co-creation of valuable endeavours together with understanding the Shariah boundaries. A Shariah-based metaverse could have the potential to be value-adding and beneficial for everyone - Muslim or non-Muslim.

With this in mind, the foundational blocks that need to be focused upon in developing a Shariah-compliant metaverse include:

• Utility: Shariah is founded and based upon both wisdom and principles that bring value to people in this world and the other world. It encourages us to be entrepreneurial and creative in trade and business in order to fulfil our worldly needs. However, there is still a framework that governs practice. The Qur’an encourages believers to stay away from pursuits which are frivolous, aimless and unproductive. Not everything can be monetised; money should only be gained from goods and services which are lawful and deemed to have a reasonable benefit. In fact, an underpinning property for tradable goods or services in Shariah is that there should be a reasonable benefit. Therefore, the activities in a Shariah-compliant metaverse should be focused on utility and benefit.

• Real vs virtual: any activity in the metaverse which impacts Shariah obligations or people’s rights will become impermissible.

• Representation: designing avatars and concepts in the metaverse should follow the Shariah rules, not touching anything considered sacred or unlawful in Shariah.

• Experience: for a Shariah-based metaverse, the experiences should be inspirational, educational and spiritual. A rule of thumb is that whatever is typically permissible to do in the world, according to Shariah, is generally permissible to do in the metaverse. For example, building casinos or nightclubs and similar experiences or engaging in such events in a metaverse would not be Shariah- compliant.

• Trading: transactions in the metaverse must avoid all the prohibitions of Shariah, such as Riba, Gharar and others.

Warba Bank

Warba Bank, established in 2010 pursuant to an Amiri Decree aimed at reviving Kuwait’s economy after the country’s economic turmoil, recently announced that it owns two sites in the metaverse, one on Sandbox and one on Decentraland. With the focus to increase communication with the younger and millennial generation, Warba Bank becomes the first Islamic lender to enter the metaverse. The bank intends to collaborate with its clients to introduce its products and services in virtual reality. Of note, the Kuwait government does not acknowledge cryptocurrencies for official business transactions and the Central Bank of Kuwait also restricts the banking industry and entities under its jurisdiction from engaging in cryptocurrency transactions. However, the metaverse and cryptocurrencies cannot be separated since their basic technologies are the same and cryptocurrencies are intrinsic to the regulation and operation of the metaverse.

Halal metaverse to be launched 

About 1.8 billion people worldwide practice the Islamic faith, 240 million of whom live in Southeast Asia. Therefore, for a metaverse to be generally permissible in this area of the globe, it would need to be in line with Shariah, the guiding principles of the faith. IBF Net, a blockchain-based firm, has begun work on building a metaverse that is compliant with Shariah teachings, intending to unveil it before 2022 ends. The project aims to create a metaverse that gives due consideration to the uniqueness of the Southeast Asian region in terms of its faith, culture, regulatory and policy environment. The project has two goals: one is to create an open and meta learning place for acquiring and sharing knowledge anywhere, anytime; and the second is to create an open and meta marketplace for buying and selling with higher levels of information and significantly higher consumer and investor protection. It will redesign and transform the present miniature Islamic economy developed by IBF Net, which is a centralised community-focused system, to an open system with far superior features introduced by metaverse technology.

On July 18 2022, Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Prime Minister and Crown Prince of Dubai unveiled the Dubai Metaverse Strategy which aims to create 40,000 virtual jobs and add $4 billion to Dubai's economy in five years. It will turn the emirate, which is already home to about 1,000 companies operating in the blockchain and crypto space, into a global hub for crypto and blockchain technologies, thereby adding $500 million to the national economy. The objective is to build the required talent and also invest to provide the necessary support education around the metaverse aimed at developers, content creators and users of digital platforms in the metaverse community. Dubai's hope is to create the most advanced ecosystem for the metaverse and be a frontrunner in adopting digital solutions globally. In April 2022, global investment bank, Citi, announced that the potential size of the metaverse market around the world could be between $8 trillion and $30 trillion by 2030. However, other companies such as big four accounting firm, KPMG, have said that these figures could actually be too conservative. As for the UAE, augmented reality (AR) and virtual reality (VR) technologies alone could contribute $4 billion to the UAE (or 1% of its GDP) by 2030, according to a 2020 report by management consulting firm, PwC.

Whilst there is notable enthusiasm for the metaverse from some quarters, the concept is still strange to most which can lead to confusion, apathy, and fear for some people. In the US, a survey of over 2,500 adults by Axios and market research survey firm, Momentive, revealed that 32% of the respondents were more fearful than excited about the metaverse idea. Only 7% were excited, whilst 58% were ‘on the fence’. To the cynics, metaverses are merely a fad; but the optimists consider it the future. Tech firms have collectively invested billions of dollars into building virtual worlds. Whilst some take a wait-and-see approach, risk-takers such as Microsoft, Tencent, Meta and Google have harnessed their deep pockets to gain first-mover advantages and grab a slice of this new digital economy. But who will win and will we allow our data and on-line lives to once again be dominated by big tech?

Source: Remitano

The difference between CBDCs and stablecoins is that CBDCs are digital versions of a country’s fiat currency whilst stablecoins are a little more complex as they can be pegged to fiat currencies such as USDC, or indeed a basket of cryptocurrencies such as MakerDAO. CBDCs are issued by governments, whilst stablecoins are typically the products of private companies. Adam Back, from Blockstream, recently described CBDCs as being “worse than bank accounts”, further stating that they “will be worse than paper cash, stablecoins or even Bitcoin”. Back, a proponent of Bitcoin, must have been appalled to even include “worse” in the same line as Bitcoin but, no doubt, all in a bid to emphasis his concerns relating to CBDCs. CBDCs hold no real threat to cryptocurrencies but to online banking, maybe. All this is made evident when looking at those countries which have adopted CBDCs.

Source: Elithium

China is a leader in the CBDC space, with over 250 million registered wallets to its digital Yuan (which, incidentally, does not use blockchain technology). But it is not merely China that is interested in CBDCs as, according to the Bank of International Settlement (BIS), 90% of central banks are exploring CBDCs. Indeed, before China, Ecuador had launched its digital currency back in 2015 - Dinero Electrónico - but, although attracting 500,000 users, the government eventually withdrew it. Other countries which have CBDCs besides China are the Bahamas, the Eastern Caribbean Union and Nigeria. Countries which are currently testing CBDCs in pilot projects are South Korea, Jamaica, Ukraine, Sweden and Japan, and those which have CBDCs in development are India, Eurozone, the United Kingdom and the US. A BIS survey on central bank digital currency revealed that 60% of central banks were conducting experiments or proofs-of-concept, whilst 14% were moving forward to develop and pilot arrangements. These arrangements take one of three models - retail, wholesale or hybrid CBDCs. So, what are the differences between these types of CBDCs?

• Retail CBDC is defined as the model wherein "the digital currencies are issued to the general public. The system is based on a distributed ledger and ensures anonymity, 24/7 availability and traceability. Moreover, it makes the application of interest feasible. Developing or emerging economies generally opt for the retail model with the thought of leading the emerging fintech industry. However, anonymity brings several hardships in terms of fraudulent activities."

• Wholesale CBCD is defined as the model wherein "Wholesale CBDCs are offered to financial institutions that carry reserves with a central bank. It can improve the efficiency of payment and security settlement between financial institutions. Although it is suggested for developed economies, the benefits of wholesale CBDC are increasing points for its adoption at a global level."

• The hybrid model allows for the central bank to issue the CBDCs whilst ‘middlemen’ facilitate retail payments. 

However, many still think these CBDCs are the wrong way to go about involving governments in the digital assets space. At the third G20 Finance Ministers and Central Bank Governors’ meeting, Phillip Lowe, Governor of the Reserve Bank of Australia, shared that he thought it better for the private sector to issue stablecoins as opposed to CBDCs and that he was concerned about the costs for central banks to issue a CBDC, believing that the private sector would be faster to adapt and create viable digital currencies. The conversation veered towards stablecoins when Lowe further suggested that another entity (aside from the central bank) must issue and back a payments token, although still denominated in its native currency. That is the crux of what stablecoins are. Meanwhile in the UK, the Poundtoken, a stablecoin pegged to the British pound, was launched recently by Blackfridge, a pioneering blockchain fintech company. Blackfridge is regulated by the Isle of Man Financial Services Authority and audited by KPMG, which itself will check each month that the value of issued Poundtokens is equal to the value of physical £ being held to back this stablecoin.

The Poundtoken

Source: Poundtoken

Interestingly recent paper from US Treasury's Office of Financial Research could be positive for  financial markets as information about deposits and withdrawals in and out of CBDCs could be made available in real time so giving authorities real time information of fund flows. The report finds that one risk often raised around the introduction of a CBDC— “bank runs—is not as big as initially feared”.

Arguably, it is safer to create a stablecoin backed 100% by the fiat currency of your choice as opposed to holding your cash in a bank. The reason for this is, if you place your cash in a bank account you have no control as to where your money is invested. Because of fractional banking, the bank then uses the cash to make loans which, should they default, then the bank faces a loss. In an extreme case, e.g., Lehman Brothers, then your bank goes bust. The alternative is that you use the same bank and ask it to provide treasury management services whereby, instead of putting your money in one of its bank accounts, the bank holds the cash in a segregated treasury account - ringfenced from other clients or the bank’s assets. The bank only invests in those assets specified by you, e.g., low risk, highly secure, short term money instruments - and you could even add an ESG criteria too. You then create a digital currency/stablecoin pegged to your treasury account. The trouble for the banks is that, instead of making 2% to 5% from clients’ bank account deposits, they would only be able to charge 0.5% for treasury management services.

Credit card firms use tokenisation to replace a client’s primary account number (PAN) with a token, which is essentially a randomly generated set of symbols which are useless to hackers if they were to access the token. A more simplistic way to think of tokenisation is if you go to a casino, you use cash to buy plastic tokens for use in the casino, with the key point being that the tokens themselves have no value outside the casino. According to the publication, fisglobal: “Tokenization reduces risk from data breaches, helps foster trust with customers, minimizes red tape and drives technology behind popular payment services like mobile wallets”. Therefore, it is of no surprise that payment firms have been using tokenisation with the benefits of tokenisation for businesses including the fact that:

• it reduces risk from data breaches 

• it helps foster trust with your customers 

• it means less red tape for your business

• it drives payment innovations

Meanwhile, given the growing understanding and increasing use of blockchain technology, organisations are now using this technology to tokenise not just data, but real assets such as stocks, debt instruments, real estate, commodities, and even cash in the form of central bank digital currencies (CBCDs) and stablecoins pegged to the $ or £ or € etc. Global investments company, BNY Mellon, is one of the global titans when it comes to assets that it looks after for clients, with over $43trillion of funds that it has in custody. It defines tokenisation as: “the process of converting rights - or a unit of asset ownership - into a digital token on a blockchain”, believing also that, “the benefits of tokenization are particularly apparent for assets not currently traded electronically, such as works of art or exotic cars, as well as those needing increased transparency in payment and data flows to improve their liquidity and tradability”.

Tokenisation of assets

Source: BNY Mellon

Listed below is what BNY Mellon believes are the benefits offered by tokenisation :

• reduced settlement times

• broader investor base 

• broader geographic reach 

• infrastructure upgrade 

• decreased cost for reconciliation in securities trading

• regulatory evolution

• improved asset-liability management

• increase in available collateral 

Whilst tokenisation of equities offers exposure to the gyrations of the underlying stock, e.g., Google, Apple, Mircosoft, etc, tokenised stocks do not offer the legal rights associated with share ownership at the moment - such as voting rights. If you buy a tokenised equity via FTX, you will currently not be able to vote on corporate actions. The same is true for tokenised stocks bought via Binance. However, a feature that could prove helpful for some investors is that FTX is aiming to pay all dividends gross of tax whereby doing away with the need for international investors to be compelled to reclaim tax from various jurisdictions. As well as not being able to vote, holders of tokenised equities also need to be mindful that presently you are unable to buy tokenised shares from one provider e.g., Binance, and sell them on another platform e.g., FTX.

When asked about tokenisation, Clauss Skanning, CEO of Danish firm, DigiShares (specialising in tokenising real world assets), said: “Tokenization is in its essence about digitization, automation, fractionalization, and liquidity. Due to the digitization of assets, we can automate transactions to an unprecedented level and this in turn leads to a massive cost reduction that enables fractionalization. Finally, tokenization enables peer-to-peer trading of assets with no counterparty risk, effectively increasing the value of assets with 10-30% through removal of the illiquidity risk”. Little wonder that both owners of assets and fund managers are looking to tokenise their assets. Also in Europe, 2Tokens, which is partially funded by the EU, is running a series of tokenisation projects to demonstrate the commercially viability of tokenisation in a variety of sectors. 2Tokens has so far been engaged in tokenising bills of landing for the Port of Rotterdam and the Digital Notary, tokenising share registers for notaries in Holland and is also tokenising solar energy parks with a firm called Sunified which has offices in Holland and Australia. Alex Bausch, chairman of 2Tokens, stated recently: “There is a genuine interest and demand for education around tokenisation outside of the financial sector. 2Tokens was founded to be an independent and neutral token advocacy group. Our objective to raise awareness, stimulate relevant discussions, and bring together academics and industrial practitioners to fully explore the real potential of tokenisation and help realize the broader societal benefits.”

By using blockchain technology and tokenising assets, financial institutions are able to become more efficient and improve their risk controls. An example of this is Vanguard, which is using blockchain technology and smart contracts to hedge its exposure to currency volatility. Historically, Vanguard has achieved this by creating swap contracts but now Mark Smith, CEO of fintech company, Symbiont, has said: “The smart contract calculates exactly how much collateral you need based on an initial margin calculation that’s agreed upon amongst the two counterparties. Historically, each side calculates margin on their own, and then they reconcile on an overnight basis or every two days manually to determine if both sides got the right margin variance calculation.” The financial implications of implementing blockchain technology are potentially significant. Roland Berger, has reported that the savings of €4.6billion by 2030 could be generated via tokenisation of share trading. Furthermore, the added transparency and ability to make income payments based on the time a bond, share or a property has been owned as opposed to being paid as income every six months (as is the case for equity dividends), holds much appeal for investors. However, whilst tokenisation offers many opportunities it is yet to be proven on an industrial scale. Clearly there is much education required for traditional regulated firms to understand the technology and compliance implications. This takes time, but already we are seeing assets managers such as Templeton, AllianceBernstein and JP Morgan all announce that they are to tokenise some of their mutual funds - and we are very likely to see other asset managers also follow them in the not-too-distant future. We spoke to Charles Kerrigan, at CMS Law, as one of London’s leading lawyers involved in a variety of tokenisation projects and he said: “ The legal and regulatory issues are now well established and we have experienced service providers supporting projects.  Some barriers remain, primarily that large projects take time to work through decisional processes and small projects can get caught up in securities laws if they don’t use exemptions to offer to the public.  Our experience is that the market is currently split in two: large (institutional) projects that take the time to work through all the issues to get a prototype stood up; and small (non-institutional) projects that tokenise debt or equity but don’t do a public offer.  There is less going on in the middle until the larger projects have proved it out and are public”.

So, it would seem tokenisation offers the potential to transform regulated financial markets as well as impacting on other less liquid assets such as real estate, art, cars etc. But with the tokenisation of cash and mutual funds, could this be the ‘killer’ use case of blockchain technology? Even with this in mind, let us not forget where tokenisation began - with payments with debit and credit cards and by making data transfers safer. The potential to tokenise other data such as loyalty schemes, our healthcare records, and even behaviour, all appear to point to our lives potentially being digitised, monitored and accessible. For many this does not sit comfortably, so one wonders just how far society will want this digitisation and tokenisation of our lives to permeate….

Porsche and blockchain

Source: Porsche

In February 2022, Porsche became the first auto manufacturer to successfully use blockchain technology in its cars, with Oliver Döring, Porsche’s financial strategist, announcing: “We can use blockchain to transfer data more quickly and securely, giving our customers more peace of mind in the future, whether they are charging, parking or need to give a third party, such as a parcel delivery agent, temporary access to the vehicle. We translate the innovative technology into direct benefits for the customer.” However, many other carmakers are exploring ways to integrate this game-changing technology into their vehicles. They are all aiming to take advantage of its potential to dramatically change how information or data is stored and used, subsequently enhancing transparency and security and improving transactions. Below is a selection of ways in which car makers are able to use blockchain technology:

• making user-friendly cars

Blockchains could be useful in helping drivers to unlock their vehicles; that is, the vehicle could be added to a blockchain, allowing the driver to communicate with it directly via an app. This would greatly speed up the vehicle's response time since instructions would no longer need to go through third-party servers. The integration could also enable car owners to grant others temporary access to their vehicles. The vehicle could be remotely unlocked via the app, granting a third-party or friend access into the vehicle. 

• improving autonomous driving systems 

Blockchain is a decentralised database of records that could improve autonomous driving systems. As a self-driving vehicle navigates the vicinity, the blockchain would record data about the journey which could range from information about regional weather conditions to general traffic patterns. Blockchain is able to share the data whereby allowing other vehicles in the network to then access this information. A blockchain-powered platform could give other vehicles access to other vehicles' data, which would be an essential part of the infrastructure required to enable level-five autonomous driving - Oculus believes this could be possible by as soon as 2030. In agreement with this, Toyota had already teamed up with MIT Media Lab back in 2017 to work out ways in which to use blockchain to speed up autonomous vehicle technology.

• ensuring materials are ethically sourced 

Two-thirds of the world's cobalt is mined in the Democratic Republic of Congo (DRC). Roughly 20% of this comes from artisanal unregulated mines that often exploit child labour, with about 400,000 children spending their days in these mines working for low wages under extremely dangerous conditions. Harnessing blockchain's ability to track supply-chains, a London-based blockchain start-up called Circulor aims to track cobalt from the time it leaves a mine until it reaches a manufacturer. The company is already testing the process using ‘clean’ cobalt from countries such as Canada and Australia. Furthermore, the company could refuse to track the cobalt of any mine that does not meet certain standards (including safe working conditions or adult workers), consequently driving the unethical mines out of business. Meanwhile, as long ago as 2018, BMW announced it was working with Circulor to ensure the cobalt it uses for its electric vehicles' (EV) batteries is ethically sourced. 

Automotive blockchain-based services

Source: Researchgate

• facilitating eco-friendly driving

Daimler AG Mercedes Benz has a project based on its own blockchain-based cryptocurrency, mobiCOINS, with five hundred drivers being selected as a test group. For three months, they will be receiving mobiCOINS when they operate their vehicles in environmentally friendly ways such as maintaining a low driving speed, switching the engine to eco-mode, coasting to a stop, etc. The vehicle shares the driving data with a special app and appropriate mobiCOINS are deposited into the driver's account - anyone who makes enough coins becomes eligible to win prizes. This is a good way to encourage drivers to operate their vehicles in environmentally responsible ways.

• financial transactions 

Although blockchain's ubiquity is becoming evident with time, previously people had thought of cryptocurrency, such as Bitcoin, when the topic of blockchain had arisen. Many companies, such as Porsche, are utilising the financial roots of blockchain technology. A Canadian company called SWITCH is using blockchain technology to enable vehicles to use the power in their batteries to be put power back into the grid at times of high electricity demand and then recharge the vehicles in the middle of the night when electricity demand is low. In the UK, Energy Web has partnered with Vodaphone and Mastercard and, by using smart contracts on the blockchain, the appropriate amount of money is deducted from your account and sent to the charging station when charging your EV. This smartphone app integrates with the user's existing mobile wallet and automatically communicates with any charging point that accepts Mastercard payments. It is the latest evolution of Vodafone’s Internet of Things (IoT) technology by which motorists no longer have to use multiple apps for each charging point network they use. The financial applications of blockchain could also extend to buying, selling or transferring vehicles. A smart contract that sends in your car payment on the first of the month could be created, whereby the transactions would be recorded on the blockchain technology and would cease making payments once the account reaches $0/€0 or £0. Also, you could buy a car using cryptocurrency from businesses that accept crypto debit cards. Many trusted auction organisations such as Mecum Auctions accept cryptocurrency-based debit cards e.g. BitPay.

• automotive blockchain market

Increasing focus on better quality control, reducing manipulation of data and the need for faster business transactions have prompted the growth of the automotive blockchain market.

Automotive blockchain market

Source: MarketsandMarkets

Furthermore, the swift developments in crypto and digital assets have been sparking start-ups in the region. Last year, the value of crypto firms in Latin America increased almost tenfold from $68 million to $650 million. However, due to their volatility and the potential for criminal use, caution abounds over the proliferation of digital assets. For instance, the recent price falls in cryptocurrency values is being greatly felt by some countries in Latin America, with El Salvador having reportedly lost almost $40 million with crypto since the September 2021 adoption.

Overview of blockchain in some Latin American countries 

• Argentina 

Due to the instability of the peso - the basic monetary unit of several Latin American countries which is experiencing year-over-year inflation of over 55% - there is need for an alternative. Cryptocurrency, by providing better chances, appeals to the Argentines who had once been looking to keep their assets in dollars or euros. In 2021, the crypto flow in Argentina reached $103 billion. There was a 340% rise in the number of companies paying their employees partly in crypto, thereby making Argentina the country with the highest percentage of crypto-paid workers. However, as crypto has grown in popularity the mining process has become more expensive, with local governments having raised energy taxes due to mining being highly energy-consuming. The country is also hesitating on introducing major cryptocurrency regulations due to the central bank expressing concerns about crypto's vulnerabilities despite growing adoption. 

• Brazil

Brazil, being Latin America’s largest economy, has been valued at $27.6 billion per year as of April 2022. The first cryptocurrency unicorn in Latin America, Mercado Bitcoin, is based in Brazil and its valuation increased to over $2 billion in 2021. According to the 2022 Global State of Crypto Report, Brazil, followed by Venezuela, has the highest percentage of its population owning crypto in Latin America and Brazil’s Congress has been planning to develop a regulatory framework. On April 26th 2022, the Brazilian Senate passed a bill governing virtual assets. The bill comprises of provisions that both define virtual assets and create rules for day-to-day usage. It also puts in place penalties for fraud.

• Cuba

Cuba has only recently rolled out internet connection for mobile phone users and already has about 100,000 citizens using some form of cryptocurrency. Compared to the 11 million citizens living in the country, this is not so high - however, this is only within a few months. Virtual currencies are popular in Cuba for remittance payments but, in November 2020, the then-US president banned the use of Western Union, which was the main company facilitating remittances to Cuba. In April 2022, after having allowed crypto for personal use in 2021, Cuba’s central bank approved licensing of some cryptocurrency service providers. Due to cryptocurrency’s anonymity and independence from national or multinational oversight, US restrictions could be boycotted. Venezuelans and Nicaraguans have likewise enlisted cryptocurrency to circumvent US sanctions.

• El Salvador

El Salvador is the first country to adopt Bitcoin as an official legal tender. President Nayib Bukele framed his country as a pioneer and launched a state-sponsored crypto wallet, a utopic Bitcoin city, and volcano-powered crypto mines. President Bukele hoped citizens and businesses would adopt Bitcoin for everyday transactions and remittance payments. Meanwhile, rating agencies and the IMF warned against the adoption of Bitcoin due to its instability and vulnerability to financial crimes. The recent Bitcoin crash has added to losses totalling $40 million, exceeding the $38 million El Salvador had to pay to bondholders in June. Crypto adoption by businesses runs low and technical barriers to its usage increases. In an attempt to stabilise the price of Bitcoin, President Bukele has dipped into state coffers, buying over $105 million of the currency. 

• Panama

A bill regulating eight cryptocurrencies was recently passed in Congress. The cryptocurrencies involved are Algorand, Bitcoin, Elrond, Ethereum, IOTA, Litecoin, XRP Stellar and XDC Network. This would permit Panamanians to use any of these currencies in private businesses and for civil matters. Worries that crypto could be used for money laundering exist, as illegal financial activity is a problem Panama has struggled with in the past. However, Panamanian lawmakers have assured that crypto will be regulated and overseen by a watchdog and that transactions will be subject to the country’s existing laws on financial transparency.

Source: Newday Crypto

Blockchain transforming remittance in Latin America 

According to data from Americas Market Intelligence (AMI), the volume of remittances received in Latin America rose to 126 billion dollars in 2021, more than twice the amount it was a decade earlier. Sending money across borders, unfortunately, has very high fees in the market with Brazil topping the chart, having an average fee of 7% per transaction. Peru, the Dominican Republic and Colombia closely follow. Digitalisation among remittances industry players, however, has been reported to be helpful, as it would open the door to blockchain technology, allowing money to be sent with zero fees. This mechanism would be of benefit to a poorly banked and more digital population.

Average remittance fees in Latin America

Source: Americas Market Intelligence

Although traditional banking has improved the traceability of its transactions, the mechanism is still expensive due to the need for interbank arrangements. Brokerage is usually excessive, particularly for those currencies that are not often exchanged. It is difficult for many traditional players to achieve optimised costs and rapidity at the same time. However, blockchain, striking out the need for any intermediaries, allows for a single point of exchange, thereby making possible a cheap, easy and fast transaction. At the beginning of this year, about 76% of consumers in Latin America had a smartphone, as against 69% who had a bank account. This shows a possibility of consumers skipping conventional banking and adopting a cryptocurrency wallet as it provides relatively better services. Asides from the highly volatile cryptocurrencies like Bitcoin and Ethereum, blockchain offers low risk stablecoins (examples are USDC and USDT) that are bolstered by fiduciary currency such as the US dollar. These stablecoins or stable cryptocurrencies are alternatives that could evade the scepticism of investors or users of remittance. The swift developments and adoption of the use of cryptos and digital assets have sparked numerous start-ups in Latin America. However, although the region is at the forefront in its use of cryptocurrencies many governments are taking a cautious stance toward cryptos

• 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?

Technology where legal firms are investing

Source: PwC

As PwC has reported: “Tech needs now cost the partners almost as much as half of what a firm’s premises cost. This just shows how central tech is now to the functioning of law firms.” Law firms rank Improve use of technology as their top priority for business support. Furthermore, blockchain software technology company, ConsenSys, believes: “Lawyers can leverage blockchain technology to streamline and simplify their transactional work, digitally sign and immutably store legal agreements”. Back in 2017, the 26th PwC annual Law Firms’ Survey revealed that 70% of surveyed law firms would utilise smart contracts for transactional legal services, 41% would use blockchain for transactional legal services, 21% for legal support and 31% for high-value legal services.

Benefits of blockchain technology in the legal sector

• accessibility - by leveraging blockchain technology, lawyers can streamline and simplify their transactional work, and digitally sign and permanently store legal agreements. With the use of smart contracts, scripted texts and automated contract management, the time spent preparing, personalising and maintaining standard law documents is reduced. This is cost-saving for both the legal industry and the customers.

• transparency - blockchain-based contracts have baked-in compliance thereby providing no room for ambiguity. Being a distributed ledger technology, blockchains create a shared ledger which is accessible by all relevant parties.

• automation - according to CLIO’s Legal Tends Report 2018, lawyers spend about 48% of their time on administrative work. Utilising pre-designed smart contracts will automate non-billable administrative tasks and transactional work whereby offering greater efficiency in legal proceedings.

• cost reduction - automating manual tasks significantly reduces the time spent on drafting and amending legal documents. Since clients pay the documentation cost, introducing smart contracts will cause a reduction in transaction costs for both parties.

• efficiency - blockchain can streamline and automate many processes in the legal industry without losing any of the judicial authority. Also, cost and friction can be reduced by optimising administrative and critical tasks.

• data integrity - legal documents are vulnerable to ill-intentioned hackers who seek to steal, destroy or manipulate critical information. However, to preserve data integrity, data can be stored in decentralised locations. If there is an alteration of evidence the associated hash value will not match, making it obvious that a change has occurred. Also, given that data is held on a blockchain in a cryptograph manner and on multiple servers, the use of blockchain-powered platforms offers improved cyber security and potentially better disaster recovery properties. 

Different uses for blockchain technology in the legal sector 

• document management system (DMS) - DMS is specialised software for storing, accessing and managing files. This first step towards digitised documentation was created to simplify and accelerate office processes. It has great security with customisable access rights, data backup, and maintains regulatory compliances by simplifying data classification. DocFlow is just one example of a blockchain-powered DMS platform available for lawyers to improve the ability to track documentation, be more trustworthy and accelerate the whole document management process.  Although DMS has several advantages in the legal industry, some drawbacks have necessitated the need for a more efficient technology - i.e. blockchain. DMS is a methodology proven to be insufficient in handling legal documentation due to its inability to track changes and vulnerability to document duplication. The legal industry functions on the principle of integrity, security and confidentiality and so blockchain, being a distributed ledger with attributes such as immutability, precision, transparency and security, can uphold the values of the legal industry. 

• smart contracts - the current legal contracts are written with physical signatures. This manual processing is both time-consuming and vulnerable to human error. Blockchain technology can solve this by making legal documentation accessible and transparent. The cost and friction of generating and securing legal agreements are reduced by creating a contract that can automatically execute based on pre-specified criteria.

• intellectual property (IP) - in 2017, the US Patent and Trademark Office (USPTO) filed 440,000 new applications. As revealed by the annual report of that year, it took USPTO about 16.3 months to complete one patent registration procedure. The approval process is lengthy, making it challenging to examine who created an intellectual property first. Blockchain brings solutions to this by creating ledgers for IP owners; these ledgers can be smart contracts, setting up terms and conditions and types of remuneration. Through this, copyright cases ought to be able to be processed more quickly as data can be made available in almost real-time so that, in theory, disputes can be settled faster.

• document notarisation - firms such as Stampd, Blocksign and Stampery have developed blockchain technology to provide notary services to prove the existence of a document at a particular point in time that can be verified independently. Blockchain technology can facilitate proof of existence through hashing the document and storing the value in the blockchain. It also enables proof of ownership by hashing the record retrieved by the transaction ID and this enables seamless transfer of document ownership, security to stored documents and deeds, and creates open transactions for the data network.

• property rights - blockchain technology enables real estate transactions to use fewer intermediaries, thereby the selling and buying property in a transparent and immutable way can be more efficient. Blockchain-based ledgers offer a new form of property rights management by being able to both time and date stamp and record when the intellectual property (IP) has been lodged/ sent to a third party. Fileprotected, based in California, is a good example of a blockchain platform where owners of IP can register their IP and a history of how, when and with whom it was shared.

• chain of custody - gathering evidence is the core of any investigation; validating the findings and proper documentation is essential, particularly when a case lasts for many years, and along the line of a case evidence gathered at the beginning may become critical in the later stages. Correct and regular documentation (paper-based or electronic) of the chain of custody will make it easier for the legal authorities to identify the vital information whenever required. Paper-based documentation is cumbersome but equally security concerns have been raised about electronic evidence because it is stored in a centralised database. Blockchain brings auditability and traceability to the system by allowing time-stamped cryptographic records.

Challenges of blockchain technology in the legal sector   

• the legal industry is complex - because of the importance of evidence and documentation, hard copies can take precedence over digital copies and this may create a barrier for greater use of blockchain.

• technological indifference - historically, there has been a lack of investment in technology in the legal industry. In 2019, the law society’s LawTech report showed that interest remained low even with the increase in the use of technology in many sectors. Moreover, legal stakeholders are not in a hurry to adopt any change with their apprehension appearing to stem from the drawn-out legal proceedings. Although they seem not willing to let this pass, these attitudes would appear to be changing (as highlighted by the PwC 2021 survey mentioned above).

• legal issues - blockchain is a widely accepted technology in many countries but some are still finding it hard to trust it. The lack of central governance and the fact that the legal aspect of the decentralised approach both present a challenge in some jurisdictions.

• scalability - this has been cited as a reason why blockchains cannot be used in the legal industry, although as blockchain technology develops this is becoming less of an issue.

So, blockchain technology offers the legal industry both opportunities and threats. There is certainly considerable work for lawyers involved in advising those firms which are now using blockchain technology and, to do so, the lawyers often need to have a sound appreciation of not only the legal issues, but the technology itself. Furthermore, with their ability to automate processes, the advent of smart contracts is likely to mean many industries will be using these contracts and, as Forbes has reported: “In general, smart contracts are enforceable as long as they follow the basic rules of contractual agreements”. Accordingly, it is important to understand how the blockchain works and the risks and challenges associated with its incorporation. In spite of this, further advances to blockchain-powered platforms potentially offer the legal industry even greater benefits by improving both capabilities and workflow and the potential litigation of organisations miss use of  blockchains or the digital assets this technology can create has not even been mentioned here ….

The second type of blockchain funds are mutual funds - the type that you, as a reader, have historically invested your savings and pension funds into but are using blockchain technology to create digital/tokenised funds. These digital funds will employ the same fund managers but, instead of only being able to be bought or sold once a day, will enable investors to potentially trade 24/7 and have independent market makers to price the funds - as opposed to the price being set by the asset management firm.

Historically, there are very few blockchain-mutual funds as mutual funds mainly because, for retail mutual funds specifically, they have to hold the majority of their portfolio in those assets which are quoted on recognised exchanges. This means investments such as shares in unquoted blockchain start-ups or cryptos are generally not allowed for traditional mutual funds. Whilst there are quoted specialist companies, e.g. Kasei Holdings *(which invests in a portfolio of cryptos), there are also a variety of other ways to offer exposure to blockchain-related assets, including blockchain ETFs. These are typically ETFs which own shares in companies that use or develop blockchains and will often have no exposure to cryptocurrencies. For example, Walmart uses a blockchain-powered platform to create an automated system for managing invoices and payments for its logistics partners, and Saudi Aramco which invested $5million into Vakt, itself helping to make the petrochemical industry supply chains more efficient using blockchain technology. Furthermore, ETFs can be broken down into the following categories:

• companies that own cryptocurrency - MicroStrategy and Tesla

• crypto exchanges and crypto miners - Coinbase is a cryptocurrency exchange and Riot Blockchain, Core Scientific and Marathon Digital are all Bitcoin mining companies

• financial services firms - Galaxy Digital Holdings (a crypto asset manager), and Société Générale, HSBC and BNP Paribas are all working on blockchain-powered platforms

• tech companies - NVIDIA (a microchip manufacturer) and Advanced Micro Devices supply hardware to support blockchain systems 

Launching in 2018, the Amplify Transformational Data Sharing ETF (BLOK), with its focus on blockchain technology, was the first blockchain ETF approved by the SEC and invests in companies developing and utilising blockchain technologies. Forbes has compiled a list of other blockchain ETFs one can invest in.

Increasingly, the asset management industry and service providers (i.e. custodians and administrators) are looking to create a digital version of a standard mutual fund. BNY Mellon, which is one of the leading fund administrators and providers of custody services, has been a strong advocate of how blockchain technology is going to impact the asset management industry: “Blockchain’s ability to lend transparency and speed to once cumbersome and opaque workflows can revolutionize the way custody banks serve their clients…. Real-time knowledge of incoming trades would be particularly helpful for fund managers during times of extreme market volatility. If money managers have immediate transparency into the creation and redemption of funds, they would be able to react to the market more quickly”.

Digital/tokenised mutual funds

Source: Tokeny

As reported in the FT, Timothy Spangler from the law firm, Dechert, believes: "A mutual fund powered by blockchain can trade 24 hours a day, 365 days a year, so “you don’t have to wait 24 hours to have a human being shuffle the paper around”. It will also result in a more secure system and a “highly significant decrease in fees. A number of my clients believe that . . . in a small number of years the near entirety of transactions in financial assets will either occur on the blockchain or be blockchain facilitated.” The first mutual fund to employ blockchain technology has been from Franklin Templeton which has created a digital/tokenised Franklin On-Chain US Government Money market fund. As reported by FT Adviser, the Investment Association (the UK trade body for fund managers collectively looking after £9.4trillion of funds) has stated: “The funds industry was on the verge of a major technological transformation, at the centre of which was the “investment fund 3.0”…..known as a tokenised or digital fund, will be traded and recorded on a distributed ledger using blockchain technology, and shares or units will be distributed could allow for more engagement and customisation, while maintaining important consumer protections. This could include the provision of a greater variety of portfolios tailored to the specific needs of individual investors and a wider range of financial advice services to address the current advice gap in the UK.” 

But it is not only Franklin Templeton and the Investment Association which are seeing the potential of digital mutual funds - AllianceBernstein and JP Morgan Chase have also announced they are to digitise some of their funds and the scope to digitise mutual funds has certainly not been lost on digital platforms and exchanges. FundAdminChain is working with the London Stock Exchange and four global asset managers to be made available for UK investors in the next few months. When asked, Simon Barnby, CMO at Archax (the FCA-regulated digital asset, exchange, broker and custodian), said: “We are currently working with a large asset manager looking to tokenise its funds.” Furthermore, according to Daniel Couheur at Tokeny: “Euronext, the largest stock exchange in Europe, and Apex, one of the largest fund managers in the world, jointly invested in Tokeny, which has its headquarters in Luxembourg. Tokeny is in the midst of adding assets worth $1 trillion in the form of private and real estate funds to its platform.”

Added to this, there are also other firms working in the DeFi space such as Enzyme Finance and Avantgarde Finance.  

Ever since governments and organisations started to make provisions for the mental health of their employees and citizens there is an expectation for employers and authorities to take a strong stance on mental health issues. Both blockchain technology and the metaverse have a variety of ways in which they can potentially support the mental health sector and offer some insight as to how workers will be able to embrace the ongoing digitisation that we face at home, at work and in our day-to-day lives.

Deloitte 2022 Global Health Care Outlook

Source: Deloitte

The global mental health industry is estimated to be US$527 billion by 2030, although the size of this sector is potentially much larger as many mental health issues still remain unreported. Furthermore, to some extent mental health still has a certain stigma attached to it, although there is now increasing awareness and sensitisation as regards the approach and treatment of mental health illnesses. Tragically, the COVID-19 pandemic caused rates of suicide around the world to spike and, at the time, the National Library of Medicine published a report Suicide Risk and Prevention during the COVID-19 pandemic

 explained how preventing suicide needed urgent attention. In the US, the National Institute of Mental Health has estimated that 1 in 5 adults lives with a mental illness. Only half of these people have received treatment for their illness. 

Author and alternative medicine advocate, Deepak Chopra, has recently launched his "Never Alone Initiative - Worldwide Alliance” which is a partnership between the Chopra Foundation and Hedera Hashgraph. The Deepak Chopra Foundation itself is a not-for-profit organisation and has selected Hedera Hashgraph for its distributed ledger technology to meet some of the challenges around supporting mental and emotional well-being. Chopra hopes to create emotional support and a support system for everyone and anyone who is experiencing mental health services. "Never Alone" is designed to create a community of transparent and vibrant participants in health, wellness, and mental health. The blockchain-powered platform is designed to allow medical practitioners and mental health and wellness experts to load information to a database that cannot be altered or tampered with but can be accessed globally.

Source: BusinessNews

Meanwhile, TAGO, a UK-based tech firm has turned to tokenising mental health. Its objective is to help its users find professional mental health counsellors and experts easily whilst also earning through their "talk to earn" model in which both users and consultants converse. Tago has also created its own metaverse, Tagoverse, with its Tago token being utilised to govern the community. Holders of the token can attend courses, participate in spiritual events, exchange spiritual items, and engage in the staking program to earn more voting rights and premium access. Users/members of the platform are never left stranded as they can always talk with Tagosol, the world's first NFT mental health AI assistant. It is designed to help users find answers to their mental health problems, relax, earn rewards and help control their emotions.

Another company using tokens to help mental health challenges is the US firm, FiveBalance, with an app that is designed to help people facing depression by giving them the FBN cryptocurrency. Users get rewarded once they achieve their own bespoke Five Balance goals - Fitness, Financial, Family, Flair and Faith. In March 2022, Mind Blockchain developed “a proprietary method for transmitting research data in a decentralized environment, which promises to provide a global impact on clinical research in the tracking, sharing, and caring for data. We are proud and excited to announce that this Non-Fungible Data (NFD)™ developmental process is presently in BETA testing.” Virtual reality of the metaverse can be used to help treat mental health illnesses phobias and various anxiety disorders. In a study run by Oxford University in conjunction with a hospital in the Greater Manchester area it was found that found virtual reality (VR) technology can help people recover from mental health problems. Meanwhile in London, a study found that using VR headsets when giving COVID -19 injections in a controlled and safe environment helped reduce the impact of needle phobia (needle phobia affects 10% of the population). Being able to escape into a VR world is also being used by a health trust in Wales in an effort to help NHS staff combat stress (a huge issue due to the pressure of dealing with COVID-19 patients).

Using the metaverse can help one to escape from the stresses of life but, though still yet unknown, excessive use could potentially lead to a variety of mental health issues including depression, irritability and stress. Certainly, it is well-documented that social media addiction is a real challenge and there are concerns that something similar will exist for the metaverse. Although the use of digital platforms can help alleviate the pains of everyday life and become an escape, excessive usage of these platforms can create problems of their own. Mental health issues that have been associated with social media platforms usage include stress, depression, paranoia, irritability, etc. Blockchain and the metaverse are tools that can have a tremendous advantage when rightly implemented and used, and the virtual nature of these technologies makes them more inclusive of people, especially those living with a disability. The challenge will be in unlocking the benefits they offer the mental health industry without creating more mental health problems.

So, not tiny, but compared to other financial markets, not that significant. Therefore, after seven years the question remains, is DeFi to remain merely a niche sector or can it, indeed, realise its potential and really challenge traditional financial markets? Smart contracts are very much a key driver in the DeFi sector, with IBM defining them as: “Digital contracts stored on a blockchain that are automatically executed when predetermined terms and conditions are met”. Linking with this, decentralised apps (dApps) are applications which use smart contracts and offer the ability to offer many of the services that historically banks have offered - making payments, lending, saving and buying and selling of assets. 

Meanwhile, tokenisation is steadily becoming more prevalent as a natural extension of TradFi for existing asset classes such as equities, debt instruments, commodities, real estate and even national currencies in the form of stablecoins and CBDCs. However, as our lives (including the provision of financial services) become ever more digital, physical national jurisdictions potentially become less relevant - yet local laws and regulations will still need to be adhered to. Digital markets will increasingly need to be globally coordinated if safeguards and investor protection are to remain in place. Therefore, surely there will be the need for consensus as to what actually needs to be regulated, and why:

• the protection of consumers? 

• for market stability?

• to maintain confidence in the markets?

• to encourage innovation?  

DeFi opportunities

• DeFi is inclusive: provided you have a digital wallet and have access to the internet, you are able to use DeFi and not have to rely on banks and other money transfer firms.

• Transactions are transparent: DeFi offers the ability to monitor actions in real-time including the repayment of loans, alterations in interest rates and releasing collateral. As there is greater transparency, users ought to have more confidence and trust.

• Smart contracts: it is possible to automate many traditional risk management and compliance monitoring functions.

• Data is held cryptographically and decentralised: blockchain-powered platforms hold data securely, and permission as to how and when access to data can be pre-programmed before a DeFi transaction is entered into. Since data is decentralised, it has built-in disaster recovery credentials and offers enhanced levels of security from cyber-attacks.

• Disintermediation: DeFi use of blockchain means there is only one ledger/database that the various parties can have access to and, being digital, it is possible to send and receive payments faster and cheaper (especially when dealing on a multi-jurisdictional basis) without having to engage with several intermediaries. This generates cost savings and efficiencies in terms of transactions and reporting.

 DeFi challenges

• Change: DeFi technology is new and regulators and institutions are cautious of change since this could impact on investors, potentially resulting in fines and compensation as well as damaged reputations. Furthermore, many of the systems and procedures are yet to be fully tested although the recent collapse in crypto prices has, for some DeFi platforms, been a baptism of fire.

• Regulation, or lack of: Swarm Markets in Germany was the first licensed DeFi platform globally. There is minimal, if any, protection when things go wrong and not being regulated means that the usual investors compensation schemes are not applicable. The platforms do not need to have insurance or hold capital adequacy reserves for most DeFi, and there are no laws enforcing capital reserves for DeFi service providers.

• Liquidity: many DeFi platforms rely broadly on private clients for transactions potentially creating challenges in times of stress, as we have seen recently. Celsius is an example of a DeFi App which has struggled as investors look to encash. Lack of liquidity has forced prices down.

• Decentralisation: this can present a challenge for regulated investors because they may end up trading with parties which would usually struggle to complete standard AML checks. Given the fines faced by financial institutions in the past around AML, there will be a reluctance to be caught again. Because some DeFi platforms are truly decentralised, there is also the added difficult issue of getting redress (as you do not know who is responsible) in the event of unlawful actions.

• Hacking: this is, and always will be, a risk where money is involved. In 2021, over $10billion was hacked. However, in a rather bizarre incident a so-called ‘ethical hacker’ stole over $610million from the Polygon DeFi platform only then to return it.

• User experience: as with many matters to do with crypto, DeFi is not that easy for a novice as the user has to deal with digital wallets, create, and more importantly, store and remember private keys (aka passwords).

Money and banking.com summarises the challenge DeFi faces since currently much of DeFi is centred around cryptocurrencies: “While the solutions employed in TradFi are often inadequate and incomplete, features such as counterparty identification and centralized verification make them both more complete and more effective than those currently in place in the world of crypto/DeFi.  Ironically, addressing the severe deficiencies in the current crypto/DeFi infrastructure may prove difficult without making highly unpopular changes that make it look more like TradFi - like requiring participants to verify their identity.” 

However, irrespective of the above, DeFi certainly offers new opportunities for traditional, regulated institutions since they understand the added transparency and traceability that using blockchain offers. Equally, as we see DeFi being embraced there will inevitably be some losers such as the brokers and clearing houses who could no longer be needed as much. An example of the growing importance of the DeFi market can be seen in the $100trillion asset management industry. 

JPMorgan Chase’s announcement that it is to tokenise its mutual funds and “introduce $trillions to the DeFi sector” could well prove an inflection point as other fund managers follow suit. This type of activity could well take DeFi from being niche to mainstream and, in turn, encourage other firms to make their borrowing, lending, and services available on DeFi platforms. After all, there is no shortage of customers looking for higher yields, quicker settlement, different investment opportunities, greater transparency, lower costs and generally more flexibility with their money. DeFi offers the potential it can deliver on these wishes.

Source: Teamblockchain

A combination of technologies such AI, Bigdata, IoT blockchain etc., offers the promise that much of the current regulatory reporting and compliance functions could be automated and coordinated on a worldwide basis. This would enable regulated companies to design and market financial services products and services on a global basis, at a fraction of the regulatory and compliance costs they currently incur.

In a survey carried out by LinkedIn, blockchain-related jobs were the most sought after in the US, the UK, France, Germany and Austria. This growth is not being recorded in other traditional businesses/industries but, interestingly, different industries are looking at ways to inculcate blockchain technology into their normal workflows. Companies such as J.P Morgan, Wells Fargo and other firms on Wall Street currently have preferences for employees who have knowledge and experience in cryptocurrencies, or the technology that powers them - i.e. blockchain. Likewise, with growing evidence of an impending recession in many jurisdictions, there will undoubtedly be on-going pressure to reduce costs and look for new ways in which to be more efficient. So, we could well see even greater demand for those with blockchain skills and knowledge.

Compensations for blockchain engineers 

Source: Hired.com

Hired.com re-iterates the huge growth for those with blockchain skills - even when compared to other jobs in the IT sector. Indeed, in an article from Julian Messner at Robert Walters (a leading global recruitment company), recently said: “Across all sectors, there is a strong demand for blockchain IT professionals who are able to leverage their technical expertise to improve operations and drive business objectives. This will require developers to have both expertise in blockchain – already a niche skill set – as well as familiarity with the industry they are developing applications for. For example, in fintech, blockchain product owners, backend or front-end developers, and UX/UI designers are required to have some level of experience with e-wallet and online payment gateway solutions as well – making it hard for companies to find skilled candidates. The shortage of skilled talent has seen inflated salaries, with blockchain professionals commanding 30% higher salaries compared to other IT professionals.”

Advantageous to this is that opportunities in and around blockchain are varied and span many industries and insomuch as the blockchain industry is considered a technical one, there are also plenty of non-technical jobs available to all.

Blockchain vs other developer roles

Source: Hired.com

Below are some of the job opportunities in the space and what they entail:

1. Developer

There is a massive demand for the right people to create blockchain-powered applications and the required architecture. If interested in such a role, programming languages such as Python, C++ and Javascript will be useful.

2. Quality engineer

The quality engineer is responsible for making sure every aspect of a blockchain-powered service or product meets agreed quality control standards. Blockchain quality engineers ensure projects are ready before they are released to external clients, and then are charged with ongoing quality checks. A mix of technological skills and strong communication skills are key characteristics that employers will be looking for. 

3. Legal and/or compliance roles 

There is a huge demand for staff in legal and compliance roles who have an understanding of blockchain technology. The rules and regulations around the use of blockchain and the digital assets that they create are still being formulated in many jurisdictions. However, as we see organisations embracing blockchains and using smart contracts, legal and compliance staff will be required to have a thorough understanding of the legal/regulatory implications as well as the technical aspects of smart contracts.

4. User experience (UX) designer

Arguably, the design and how people interact with those applications and services using blockchain technology is holding back adoption, as often the language used and the procedures are often more appropriate for more ‘techy-orientated’ people. The UX designers cannot be overlooked since they are responsible for the creation of a user interface that will hit all the right buttons in the minds of users. This job role expects designers to have an eye for detail and to be creative and diligent.

5. Blockchain project manager

These are the people who are charged with the responsibility of allotting the different aspects of blockchain projects to people who possess the relevant skill sets. Blockchain project managers typically have the same expertise as conventional project managers, albeit with technical knowledge of how to use the technology.

You can find blockchain jobs on sites such as CryptoJobList, Crypto.jobs, CrytocurrencyJobs.co, to name just a few. However, as we see more industries using blockchain technology it is not only the specialist recruitment firms but much larger and, in many cases, global recruitment firms such as Robert Walters, Reed, and Indeed which are likely to have clients looking for people with blockchain expertise. An entire universe of blockchain job advertisements exists out there, and for those looking for a job using blockchain technology there are also a variety of courses available. Here follows a small selection:

• Prospects - lists university courses

• BCS (the Chartered Institute for Technology) - offers training for: “Anyone who wants to understand more about blockchain and the impact it can have on their organisation and society.”

• Invezz - provides a list of European universities and colleagues that have blockchain courses

• European summer school - “The learning goals of the Blockchain Fundamentals course consists of knowledge and practical skills components.”

• Ixlgroup, in the US - “The course will cover how to use the latest tools to build Blockchain applications, set up your own private Blockchain, deploy smart contracts on Ethereum and gain practical experience with real-world projects.”