June 12, 2018
The application of blockchain technology in private and private sectors has seen significant publicity and certain developments by a few governing authorities and by a relatively small number of tech startups.
The UAE, the Republic of Georgia, and Estonia are among the rare cases. The Estonian KSI Blockchain technology protects Estonian e-services such as the e-Health Record, e-Prescription database, e-Law and e-Court systems, e-Police data, e-Banking, e-Business Register, and e-Land Registry. By using blockchain technologies, National Agency of Public Registry in the Republic of Georgia (NAPR) can provide its citizens with a digital certificate of their assets, supported with cryptographical proof published to the blockchain. Even the European Land Registry Association has been paying attention to the opportunities blockchain technology opens to the sector.
Aside from the news on the Department of Economic Development (DED) in Dubai and the Dubai Silicon Oasis Authority (DSOA) unveiling the new joint blockchain project Dubai Blockchain Business Registry Project, insurer Beazley has partnered with three companies to build a blockchain-based registry that will manage insurance for crisis situations such as mass shootings.
More applications are moving from the ideation and discussion phases to actual production. This time, the main actors are Mastercard and two countries – Korea and Georgia.
Mastercard is exploring the use of public blockchains in securely verifying payment cards at PoS. A patent application filed with the USPTO states that Mastercard has come up with a conveyance and retrieval processes to verify users’ payment credentials over a publicly accessible blockchain.
The document explains that the two-way method first encodes an image of a payment card and then stores it on the blockchain after encryption with a public and private key. Upon a retrieval request when a payment is being made, the system will use the provided private keys to decrypt the image so it can be verified.
The transaction may be conducted via the display of a machine-readable code to the point-of-sale device, which may further prevent skimming as the reading of such a code can be more easily controlled via control of the underlying display; the display can be easily shielded and is often obscured when in a pocket or purse, the patent states.
Speaking at the Constituency Meeting organized by the International Monetary Fund and the World Bank in Croatia, Mamuka Bakhtadze, the Georgian Finance Minister, said, Georgia has been one of the first countries which have introduced blockchain in the public sector but I think we could be even more ambitious in this direction.
Bakhtadze believes blockchain technology could help Georgia in reducing administrative costs and increasing citizens access to public service.
A new system based on distributed ledger technology will be introduced into the Korean banking sector starting next month. According to the Korea Federation of Banks (KFB), which represents major commercial banks in Korea, BankSign, a blockchain-based identity verification program, will officially be launched in July.
The development of BankSign is an effort by local banks to improve the user verification process in online and mobile banking. Right now, most banks in Korea rely on the public certification system, a 20-year-old banking security system.
The government earlier this year announced that it will revise the Digital Signature Act to lift the mandatory use of the traditional system. BankSign can be used in both computer-based online banking and mobile banking.
BankSign is based on Nexledger, a private blockchain solution created by Samsung SDS. BankSign marks the second time that Nexledger has been applied to the financial sector. Previously, Samsung SDS provided the platform to Samsung Card in late 2016.
Hong Kong and London-listed Standard Chartered plans to apply for a virtual bank license, making it the first traditional bank seeking a license locally to operate purely online without physical branches.
Last month, HKMA announced details on its virtual bank licenses and set August 31 as the deadline for the first batch of applicants.
HKMA deputy chief executive Arthur Yuen said about 50 companies had expressed interest in applying for the virtual bank license.
Technology is at the heart of our bank’s strategy and we have embarked on a journey to take a step beyond and go truly digital, said Samir Subberwal, Regional Head of Retail Banking in Greater China and North Asia at Standard Chartered.
It is a defensive move for these traditional lenders. If they do not have a virtual banking arm or more digital services, they may lose out to new digital players. Many young customers now want to do everything with their mobile phones. It is inevitable for the traditional banks to invest into digital banking to bolster their competitiveness, said Tsui Luen-on, Managing Director of Hong Kong-based brokerage Hantec Pacific.
We are supporting a new era in smart banking that will help clients better understand their financial position and how to achieve their financial goals. We are developing our virtual bank with innovation and client needs in mind so that their banking experiences cater to their digital lives, said Mary Huen, Chief Executive of Standard Chartered Hong Kong office.
On the mainland, Standard Chartered wants to extend its scope to the local fund custody market, and the China Securities Regulatory Commission received its application for these services on June 8.
Revolut is working on a trading platform for traditional shares without any commission.
Users will find stock from public companies from the UK and the US, as well as various ETFs and options. Revolut promises that users won’t pay any commission when they buy or sell shares. The company plans to make money on margin trading, securities lending, and interest on cash.
Premium subscribers will be able to test the feature first. The company plans to launch in the US, Canada, Singapore, Hong Kong, Australia, and New Zealand in the coming months.
Revolut now officially has 2 million users.
Ant Financial Services Group raised ~$14 billion in a single fundraising. The cash will boost Ant’s firepower ahead of a widely expected IPO in Hong Kong and mainland China as early as next year – though the company has neither publicly set a timetable nor chosen a likely stock exchange.
The funding included both US dollar and Chinese yuan tranches. The dollar share made up over $10 billion. Canada Pension Plan Investment Board said in a statement that it will invest about $600 million in Ant Financial’s unit, Ant International Co. Ant listed Singaporean sovereign wealth fund (SWF) GIC Pte Ltd and state investor Temasek Holdings (Private) Ltd, as well as US private equity firm Warburg Pincus LLC as participants in the dollar tranche.
Other global investors included Malaysian SWF Khazanah Nasional Bhd, and US private equity firms Silver Lake and General Atlantic.
Ant would use the funds to speed up globalization plans for its Alipay payment platform and to invest in developing financial technology. In five years, Ant expects 65% of revenue to come from business-oriented financial technology including assisting banks and other institutions as well as providing fraud prevention services.