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Internet Giant Tencent is Building a Blockchain Platform

Chinese internet conglomerate Tencent is building a suite of blockchain services, detailing the plans in a new white paper. The firm – the maker of popular social services such as QQ and WeChat – is planning to use the technology to offer digital asset management, authentication and "shared economies", among others services. The new platform, dubbed "TrustSQL", is envisioned as a three-part system, incorporating the core chain layer, a product and service layer, and an application layer. 广告 In statements, Tencent said that it would leverage its technological resources to push the platform, and that it sees the project as an open-ended one that encourages collaboration with other firms. (TrustSQL is envisioned as a way "to promote the development of [a] trusted internet", according to a rough translation of the paper.) The white paper further included a call for the government to play a more active role in the development of blockchain within China. "The involvement of government in the development and regulation of block chains is necessary and should encourage in-depth research on blockchain technology and block-chain applications," the authors wrote. Though the exact timing of the launch isn’t yet known – statements indicate that the platform is still in development – the unveiling nonetheless represents Tencent's most direct move in the blockchain space to date. Last summer, a subsidiary of Tencent was among 31 companies in China to back a Shenzhen-based blockchain consortium. Tencent-backed Webank also took part in a blockchain event in September of last year.

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Swift Selects Hyperledger Tech For Cross-Border Blockchain Test

Swift has officially selected Hyperledger's Fabric codebase for use in its most prominent blockchain project. Designed to simplify the nostro-vostro accounts banks held to facilitate international transactions, the trial includes participation from BNP Paribas, BNY Mellon and Wells Fargo, as well as three other global financial institutions. As a founding member of the Linux-led Hyperledger project, it's perhaps not surprising Swift has decided to base its trial on the technology, though it lauded the final work for functionality including user-tailored access to data and other privileges. If the blockchain proof-of concept (PoC) is successful, Swift's head of the global payments innovation (GPI) initiative, Wim Raymaekers, went so far as to say it could save as much as 30% of the reconciliation costs associated with cross-border payments. Raymaekers told CoinDesk: "We're really looking to see if banks can gain better visibility on their information; to optimize the liquidity that they have on one end, but also to reduce the cost of reconciliation." Other banks participating in the PoC include the Australia and New Zealand Banking Group (ANZ), the Development Bank of Singapore (DBS) and RBC Royal Bank, which were already working with Swift on GPI. These partners will be joined by 20 other institutions during the test phase of the implementation. Notably, the trial will also attempt to capitalize on existing standards used by Swift members. The data stored on the blockchain and the APIs used to query and update that data will conform to Swift's ISO 20022 message formats. If successful, the blockchain PoC could be incorporated into Swift's GPI solution. "When in comes to exchanging data between nostro and vostro data in accounts, there are solutions today," Raymaekers said. "We are looking to see if DLT is a better solution." Blockchain nostro To facilitate international transactions, banks typically store money all over the world in what are called nostro accounts. Yet settlement times can take weeks depending on the complexity of the transaction. While nostro accounts are designed to save time by moving money closer to where it's needed, before it's needed, that money lies dormant when not in use, collecting less interest than if it was applied in a more active way. To test if a distributed ledger could minimize the reliance on correspondent banks, Swift divided the trial into two parts, according to Raymaekers. First, there's the technology itself. Swift's Fabric PoC is being built to leverage the bank messaging platform's existing GPI resources. While launched in February with 12 members, 30 banks are now in some stage of implementation of GPI, with more expected to go live soon. Using more traditional technology on the GPI toolkit, Raymaekers said Swift has already improved the speed and transparency of its services and now wants to see if blockchain can take it even further. "Several hundreds of thousands" of messages have been sent since GPI's launch, he said. The second part of the PoC centers on business. On top of the blockchain implementation itself, Swift's developers plan to build and run a smart contract that could help automate the transfer process. "We are using DLT to exchange the debits and credits," said Raymaekers. "We are building value added on top through a smart contract application that will show to a bank in real time what it's position is." What disruption? Still, the test also occurs within the wider narrative surrounding Swift, since earlier on in the frenzy surrounding blockchain tech and its possibilities, the financial messaging provider was identified as one of the middlemen most likely to be disintermediated. Along with the DTCC and others, supporters of the existing legacy financial infrastructure were targeted by startups built from the ground up to capitalize on the efficiency of distributed ledgers. Yet, this year Swift has established itself as open to the idea of evolving its own business model for possible integration with blockchain tech. While some skeptics persist in doubting Swift's willingness to let go of its market position and adapt to a new paradigm, Raymaekers asserted that its receptivity to changes goes beyond this project alone. He said: "Maybe there’s a completely new way where you don’t need to hold money at accounts with your correspondent bank. But that is a complete rethinking of the correspondent banking paradigm."

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New Blockchain Deal Seeks to Expand Delaware's Business Appeal

There are more businesses incorporated in Delaware than there are people – a balance the state's leadership hopes blockchain can help change. Already the location to more than 1 million incorporated businesses, many of which actually conduct their business elsewhere around the world, Delaware believes blockchain has a significant enough global pull that it could inspire companies to set up brick-and-mortar offices in the state. To that end, Delaware representatives have exclusively revealed to CoinDesk a new partnership with European strategy firm Spitzberg Partners – one designed to leverage the expertise of the firm, as well as its own technological and regulatory development around blockchain, as a means to entice international businesses to set up shop in the state. Delaware recently reduced its revenue projections for the year. Yet, the injection of capital that could arise from the project has the potential to make a significant impact, according to Andrea Tinianow, the director of state-run business development initiative Delaware Global. She told CoinDesk: "People know about Delaware because companies incorporate here. But, we want people to know that it's more than just where to incorporate, they can do business here and if it's distributed ledger, even better." Initially revealed at CoinDesk's Consensus 2016 conference in New York, the Delaware Blockchain Initiative has grown from an effort to build a stock trading solution with New York-based Symbiont to include a number of regulatory measures crafted with the help of law firm Cooley LLP. Tinianow said the state of Delaware is already being approached by companies all over the world interested in incorporating in Delaware to take advantage of its historically light regulatory touch and its progressive stance on blockchain and other financial technology. Germany-based Spitzberg Partners, she went on, is already working with its clients to help "create awareness" of what they consider the benefits of opening a physical presence in the state, including the absence of state income tax and a chancery court that not only doesn’t use juries, but has proven to be rather knowledgeable regarding blockchain tech. Tinianow said: "This is the first chapter. I think there’s a lot of exciting things that lie ahead." European connections Already, ties exist between Delaware and Spitzberg Partners, which was co-founded by Karl-Theodor zu Guttenberg, Germany's former Minister of Economics and Technology. In 2015, the then-state governor, Jack Alan Markell, conducted a trade mission to Germany in search of bilateral trade opportunities, and later helped open Factory Berlin Delaware – a co-working space modeled after an existing German initiative. To help continue that trend as part of the new partnership with Delaware Global, Ulf Gartzke, Spitzberg's co-founder and managing partner, told CoinDesk his firm will introduce the state to "corporate decision makers from around the world". "Our role will be to identify companies that are prime candidates to expand to the US," said Gartzke. "And of course, blockchain in one very important part. But we are also looking at other industry verticals." Spitzberg's public partners include Toronto-based merchant bank Acasta Capital, Munich-based Ming Labs (which has offices in Shanghai and Singapore), and Zurich-based Mountain Partners. The firm also has relationships with the Wall Street Blockchain Alliance in New York and distributed financial technology firm Ripple, which has been seeking to grow its presence in Japan and elsewhere from its base in San Francisco. Going public? But there's another reason the partnership could end up having an impact not just on Delaware’s local economy, but on the future of public companies. Part of Spitzberg's role will be to play a match-maker of sorts, finding startups around the world that might want access to more than just Delaware's blockchain-friendly regulations. The availability of US capital also plays an important role to Delaware's appeal, and the state has been working with Symbiont to develop a blockchain-based way to sell shares in a company. So, starting in tech hubs like Hamburg, Berlin and Munich, Spitzberg’s Steven Ehrlich says his firm will be looking for mature startups interested in being among the first to go public on a blockchain. "There’s going to have to be a critical mass of them before companies start issuing shares and stuff like that," said Ehrlich, conceding that it's likely to be more of a "medium to long-term play". Tinianow was positive about the prospect, however, concluding: "It’s really not about Delaware, we just want to be the launching pad."

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Blockchain Could Expand Central Bank Access, Says Bank of Japan

Central banks could allow access to accounts around the clock if they used blockchains or cryptocurrencies, a senior Bank of Japan official speculated last week. 广告 Speaking during a finance forum on 21st April, deputy governor Hiroshi Nakaso touched on the subject of so-called central bank digital currencies, or CBDCs, and their potential impact on how people interact with their accounts at a given time. One proposal is to offer central bank accounts to retail customers through a CBDC (something that officials at the Bank of England have highlighted in the past). In his speech, Nakaso brought up this idea, suggesting that, depending on the degree of adoption, such an arrangement could give accountholders continuous access to funds. Nakaso remarked: "In an extreme case in which CBDC provides the same functionality as banknotes as an alternate measure, it could enable everyone to access central bank accounts 24/7, year-round. Some overseas central banks have started to consider the rationale for or to conduct researches and analyses on CBDC." Many central banks today are testing the concept of a legal tender issued in a wholly digital medium. In the past month, Hong Kong's de-facto central bank moved to begin testing a CBDC, and in March, authorities in Singapore completed a similar trial. Central banks in Canada, China, Sweden and the UK, among others, also have projects in various states of development. The Bank of Japan itself has been trialing the tech, noting in statements in December that it was "test driving" the concept ahead of any possible applications. Late last year, for example, the Bank of Japan inked a deal with the European Central Bank to collaboratively research blockchain. Still, the Bank of Japan has been largely mum on the work's potential impact, choosing to emphasize its early and experimental nature.

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European Commission To Establish EU Blockchain Observatory

The European Commission (EC) will tender offers for a service contract to establish a European Union (EU) Blockchain Observatory in response to a European Parliament mandate to strengthen technical expertise and regulatory capacity. The project, announced on the EC website, will include an observatory and a forum to gather input on distributed ledger technology and blockchain technology. The goal is to establish an EU expertise resource for forward-looking blockchain topics and develop EU use cases. Another goal is to assist the EC in determining what role – if any – government authorities can play to encourage the creation of such technologies and to develop policy recommendations. // Get exclusive analysis of bitcoin and learn from our tutorials. Join Hacked.com for just $39 now. // Observatory Tasks The observatory is expected to do the following: 1. Provide a current overview of key initiatives that rely on distributed ledger or blockchain technologies worldwide; 2. Keep track the technology’s developments and the related opportunities and challenges for Europe’s industry, citizens and government; 3. Establish expertise on topics like governance, validation mechanisms, infrastructure, smart contracts, legal and regulatory challenges, standards and interoperability; 4. Develop a platform for the European blockchain community; 5. Explore use cases for the EU. The project’s estimated budget is 500.000€ for a two-year period. The call for tender will be published in TED eTendering during the second quarter of the current year. Also read: European Commission proposes blockchain pilot project to improve regulation Digital Single Market The observatory and forum are part of the EC’s strategy of a digital single market strategy that consists of three policy areas. These are: 1) Improving access to digital goods and services. The goal is to make the EU market seamless place to buy and sell. 2) An environment where digital services and networks can prosper. This requires having rules that match the pace of technology and support infrastructure development. 3) Digital as a growth driver. The goal is to make sure Europe’s economy, industry and employment take advantage of digitalization. Last year, the European Parliament approved a task force to study the blockchain. The EU Commission also announced last year the unveiling of an initiative to give as many of Europe’s fintech and blockchain entrepreneurs the opportunity to become world leaders, giving them access to potential investors, business partners, research centers and universities.  

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Cambodia’s Central Bank Taps Blockchain for Public Payment System

The National Bank of Cambodia is working toward a blockchain payment system for its citizens in partnership with Japanese industry startup Soramitsu. The startup is notably affiliated with the Linux Foundation’s open-source Hyperledger project. The central bank and Soramitsu have entered a co-development agreement to study and contribute toward the open-source development of Hyperledger Iroha, a blockchain project originally developed by the Japanese company. Iroha creates reusable components in C++, enabling web, mobile developers and programmers to contribute to the Hyperledger project. Iroha was accepted into incubation status by Hyperledger in November last year. The National Bank of Cambodia, the country’s central bank and financial regulator, is notably looking at ‘new payment infrastructures’, according to a press release. A report by prominent Jappublicationcaiton Nikkei confirms that the endeavor is to ultimately offer Cambodian citizens a secure and inexpensive way to transmit money. // Get exclusive analysis of bitcoin and learn from our tutorials. Join Hacked.com for just $39 now. // The central bank has reportedly chosen the Japanese company after examining multiple options, picking the Iroha platform specifically. Soramitsu’s Iroha, unlike bitcoin, allows permissioned parties to take part in monitoring the blockchain. This enables an Iroha-based payment system to scale transactions around 1000x to that of bitcoin, Soraamitsu claims. Application of Hyperledger Iroha to Central Bank and Regulatory Uses of Blockchain (PRNewsfoto/Soramitsu Co., Ltd.) Iroha is also enabled with smart-contracts, which Soramitsu says will help create programmable “smart money” that will enable more efficient and secure payment and settlement systems. Cambodia does not see a modern financial infrastructure for commercial banking. ATMs, as an example, are not easily accessible. However, a 2016 study showed that 48% percent of Cambodians owned at least one smartphone, a 21% increase from 2015. The rise of connectivity coupled with affordable technology sees the Cambodian central bank looking at low-cost payment infrastructure and seems to have found its core platform using blockchain technology. “The application of information technology to finance is at a historical turning point,” stated Kazumasa Miyazawa, operating chief at Soramitsu. The executive added: Through our work with the National Bank of Cambodia, we will be able to take the first step toward creating a more efficient payment infrastructure, which we hope to expand globally in the future. Cambodia joins a growing list of central banks actively exploring blockchain technology for commercial applications and even probing the possibility of central-bank issued digital currencies underpinned by blockchain technology. The central banks of China, England, Australia, Singapore, Sweden, are some of the notable efforts taking shape around the world.

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Delaware Law Amendments Would Facilitate Blockchain Maintenance of Corporate Records

Delaware Law Amendments approved by the Corporation Law Section of the Delaware State Bar Association (DSBA) are intended to deliver specific statutory authority for Delaware businesses to utilize the blockchain to maintain corporate records. In 2015, the then-Governor Jack Markell announced an initiative to embrace blockchain technology, which eventually saw the DSBA Corporation Law Council undertake a study into the use of blockchain technologies by Delaware corporations. According to a report from Skadden, Arps, Slate, Meagher & Flom LLP [PDF], a firm’s records would be maintained through the blockchain to record stock issuances and transfers, to maintain a list of record holders and other matters. // Get exclusive analysis of bitcoin and learn from our tutorials. Join Hacked.com for just $39 now. // It states: Section 224 would be amended to permit corporations to rely on the contents of an electronic network as the corporate records, provided the records so kept can be converted into clearly legible paper form within a reasonable time. According to the firm, the amendments would mean that any type of stock ledger, even electronic ones, would serve three functions: enable the corporation to prepare the list of stockholders entitled to vote; record the information required by the DGCL to be maintained in a stock ledger; and record transfers of stock. Pushing the Blockchain Agenda Over the past year, Delaware has been pushing the blockchain agenda as it realizes the benefits of the technology. So much so, that in November of last year a Delaware judge urged institutional investors to utilize the blockchain as a way of protecting their voting rights. According to Vice Chancellor J. Travis Laster, the blockchain could help to remove the middleman when it comes to how shares are held and voted, as at present they are operating on an outdated system that is too complex to determine who owns a share and how it’s used in decision making. Delaware is just one state in the U.S. that is showing an increased interest in the distributed ledger. Only recently, the Senate in the state of New Hampshire considered a blockchain bill that would deregulate digital currency transactions such as bitcoin from money transmitter regulations in the state. By doing so, the bill is designed to protect consumers when using digital currencies such as bitcoin instead of making them register with money transmitter regulators. It would also mean that companies in the state of New Hampshire would be able to operate without following strict KYC and AML regulations that are required of them at present.

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South Korea Backs World’s First Blockchain Pilot for Insurance Payments in Seoul

Kyobo Life, a government-backed insurance operator, will trial the first-ever real-world implementation of blockchain technology for commercial insurance money payments in Seoul this year. If successful, the feature will significantly enhance customer convenience, particularly during the process of making and getting paid insurance money with a claim. Last week, Seoul-based South Korean life insurance company Kyobo Life Insurance was officially selected by the government to operate the latter’s pilot blockchain project. The project seeks to lay the foundation to promote the governments’ agenda for promoting its internet of things (IoT) infrastructure. Conducted by the National Information Agency under the management of South Korea’s Ministry of Science, ICT and Future Planning, the pilot will see Kyobo Life work in a consortium alongside blockchain technology startup ‘theLoop’, InsurTech specialist D Lemon and hospital medical record service company ‘One’. // Get exclusive analysis of bitcoin and learn from our tutorials. Join Hacked.com for just $39 now. // Using a combination of blockchain technology and IoT authentication, the consortium is looking at developing and launching services that will pay out sums of insurance money to policyholders automatically. In quotes reported by Business Korea, Kyobo Life senior MD of digital innovation stated: This is the first case where the insurance industry is fully connected with fintech and introduces a new service. If the service is commercialized in the future, we will be able to provide a better service by utilizing various fintech technologies. Blockchain Record Keeping The current process of making a medical insurance claim for small amounts of insurance money typically sees the policyholder pay medical costs to the hospital first, before receiving documentation of these costs from the hospital. The holder would then reach out to the insurer to make that claim with the supporting documents to get the insurance money. The time-intensive system exists this way since medical data is not immediately accessible by insurance companies due to fears of data breaches. An immutable blockchain platform could provide much-needed respite whilst preserving data security. A blockchain platform built between the insurer and the hospital will enhance the efficiency of this process while reducing the time taken for payments. A hospital clerk can check the policyholder’s insurance information through the ledger shared with the insurance firm. The hospital automatically sends the documentation to the insurer, which would then pay the insurance money to the policyholder. According to the BK report, the process works even when the policyholder does not charge the insurance money. As details of the hospital medical fee payments and insurance contract are auto-authenticated, so too is the payment of the insurance money to the holder, even if it is not demanded by the holder first. The blockchain platform will make the process for claiming payments easier and faster for policyholders in Seoul. A separate report by KoreaTimes has a different take on the authentication process. It reveals that the policyholder would need to agree to send the hospital documentation to the insurer first before the latter pays the insurance money. “The whole process is finished in five seconds after the policyholder agrees,” states Chung Kyu-shik, senior manager at Kyobo Life’s FinTech team. Further, the blockchain platform will also allow insurers to check if the policyholder has legitimately paid the medical costs to the hospital or is faking a claim by making double claims with any case. The burden of remembering policy details will no longer be a chore for consumers either, as the hospital’s end of accessing the blockchain ledger will have secure authenticated access to these details. A hospital clerk can check the insurance policy over the ledger when the policyholder reveals he or she simply holds a policy. Kyobo Life has confirmed its plan to sign deals with a number of major hospitals in Seoul’s metropolitan and adjoining areas to start the pilot project by the end of 2017. For the trials, cases with small amounts of insurance money, under 300,000 won ( ~USD$270) will be covered. Ultimately, the insurance operator plans to commercially expand the blockchain system to large hospitals across the country to cover all of its policyholders.

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PwC Report: 88% of Global Banks Sweat over Losing Revenue to FinTech Firms

A new report from PricewaterhouseCoopers (PwC) has found that a large majority of financial services firms intend to team up with fintech companies in the next three to five years in a bid to stem the flow of revenue loss to financial innovators. The report, Global Fintech Report 2017 [PDF], found that 88 percent of global banks are increasingly concerned that they will lose revenue to fintech businesses. The areas major banks feel they will lose out on include payments, fund transfers and personal finance sectors. In response, 82 percent claim that they intend to increase partnerships with financial technology services over the next three to five years. According to the report, more consumers will implement non-traditional financial service providers for their needs while early adopters will continue to undertake payment and money transfer services with non-traditional providers. Personal finance is expected to become the next most popular activity that banks risk losing out on. // Get exclusive analysis of bitcoin and learn from our tutorials. Join Hacked.com for just $39 now. // Integration Won’t be Easy However, while banks appear to be keen to collaborate more with fintech firms, integrating with them won’t be an easy task. The survey found that difference in management and culture in addition to regulatory uncertainty and legacy technology limitations, are identified as being significant challenges for financial technology companies and banks. Not only that, but banks are restricted to a system of checks and balances that can hinder the innovation process while fintechs are able to adapt easily due to a lack of bureaucracy. Manoj Kashyap, Global FinTech Leader and Partner at PwC US, said: Innovation is happening outside of the organization, with emergent technologies being leveraged by startups, and if financial institutions want to speed up their innovation they need to significantly increase their collaboration with fintech companies. Blockchain Movements While blockchain was initially explored by the financial services sector, the potential of this technology is now being realized by all sectors, including energy, telecoms, and pharmaceutical. The technology is moving from hype to reality and as it does so funding in the sector increased 79 percent year-over-year in 2016 to $450 million. Despite this, though, the survey found that while blockchain is high on the list of priorities for investment, in the next twelve months only 19 percent of large financial institutions identified the distributed ledger as the most relevant to invest in. This is compared to 50 percent of large fintech firms. On a brighter note, though, the report found that 55 percent of respondents are planning to adopt the blockchain as part of a production system or process by 2018 and 77 percent by 2020, by which time it will become a common feature in the business processes.

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Cambodia's Central Bank Signs Deal to Develop Blockchain Tech

The National Bank of Cambodia has reportedly inked an agreement with distributed ledger tech startup Soramitsu that will find the central bank contributing to its development projects. 广告 Announced today, the goal of the effort is to begin joint work on new payment infrastructure prototypes using DLT systems. But while a host of central banks are studying the technology globally, Soramitsu co-CEO Makoto Takemiya framed the news as unique in that he asserted the central bank has agreed to go beyond "just studying" applications. Founded in 2016, Soramitsu is best known for its management of the Hyperledger Iroha software framework, to which he said National Bank of Cambodia will now be contributing. Takemiya told CoinDesk: "This is extremely exciting because their programmers intimately know what financial institutions need and can help make Hyperledger Iroha ready for systemically important payment systems." For the startup, the deal adds to past work that has included trials conducted with Japan-based property insurer Sompo Japan Nipponkoa Holdings, while for National Bank Cambodia, it follows its scarce public statements to date about the technology. As reported by the Phnom Penh Post in 2014, National Bank of Cambodia had previously said bitcoin does not fall under its definition of a currency. Meanwhile, the trial comes amid an active time for central bank exploration of the technology, with Bank of England, De Nederlandsche Bank and the People's Bank of China all announcing recent initiatives aimed at investigating its potential.