Payments and Capital Markets Blockchain Developments Continue to Progress
By: Jonathan D. Blattmachr
This week saw several blockchain-related developments in the payments and capital market spaces. In payments, a major global technology company’s newly announced remittance system claims to enable faster and less costly cross-border payments. According to the company’s website, a counterparty using the system converts its fiat currency into a digital asset that contains settlement instructions; simultaneously, the system converts the digital asset into the second counterparty’s chosen fiat currency, and all relevant transaction details are recorded onto a blockchain to complete clearing.
Startup TransferGo has announced a similar system using Ripple that allows for real-time fund transfers from Europe to India, a corridor through which billions of dollars in currency currently flow. Transfers now, including through Swift, take up to three days to complete. For those willing to wait so long, TransferGo says it will allow free transfers through a separate system. In a related announcement, startup Abra says it will now allow EU residents to transfer Euros or other fiat currencies directly to the company, which will then deposit bitcoin to users’ digital wallets. This will enable Abra users to sidestep traditional methods to fund their digital wallets. And startup CoinGate is claiming it will make bitcoin transactions faster and cheaper for some 4,000 merchants by utilizing the emerging Bitcoin Lightning Network. These developments in the payments space dovetail with recent estimates that the crypto ATM market will grow to $144.5 million by 2023, up from $16.3 million this year, reflecting a compound annual growth rate of 54.7 percent. It is expected that much of this growth will stem from two-way machines that allow users to exchange fiat currency for crypto, and vice versa, with U.S. companies leading the charge.
In capital markets, a major U.S.-based web services provider announced it will add to its platform cryptocurrency trading in bitcoin, ether, litecoin and dogecoin. Additionally, the Chicago Board Options Exchange (CBOE) announced it will begin trading ether futures by year end, with the futures’ value based on the underlying price indicated on Winkelvoss’s crypto exchange, Gemini. According to reports, bitcoin futures’ traded volume was up 93 percent between the first and second quarters this year.
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Industry and Government Continue to Champion Blockchain Pilots
By: Brian P. Bartish
California is poised to become the latest state to implement a law clarifying the legal status of blockchain smart contracts with the passage of Assembly Bill 2658, which, if signed by Governor Jerry Brown, would provide a statutory definition for blockchain technology, expand the definitions of electronic record and electronic signature to include records and signatures secured through blockchain, add “smart contract” to the legal definition of a contract, and stipulate that information secured through blockchain is rightfully owned by the creator for purposes of interstate or foreign commerce. In Japan, the city of Tsukuba is adopting a new blockchain-based online voting system designed to prevent tampering with votes, maintain voter confidentiality and achieve better voting efficiency. And South Korea recently announced an additional six blockchain pilot projects − including use cases for livestock supply chain management and customs clearance − that will double the total number already sponsored by the government and will correspond with an additional $9 million budget increase for the year 2019.
Major industry players are also increasing investments in blockchain technology, including a major U.S. technology company and web search engine, which announced that it has added Ethereum to its BigQuery service, giving users new analytical and visualization capabilities on large-scale blockchain data sets. Another major global technology firm recently announced a new addition to its stable of self-sovereign identity products through a collaboration with Hu-manity.co to produce an enterprise version of the latter’s #My31 app – designed to engender individuals with stronger data ownership rights – with the goal of resolving the economic and informational disparities that exist between data subjects and buyers. Two more major global technology firms recently announced a joint venture for a blockchain-based supply chain proof of concept solution based on track-and-trace technology. And a “Big Four” accounting and consulting firm recently published a white paper detailing a proposed risk and controls framework to ensure blockchain deployments meet an organization’s operational, enterprise risk management and internal audit requirements.
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Newly Released List Ranks Companies with the Most Blockchain Patent Filings
By: Robert A. Musiala Jr.
On Aug. 31, IPR Daily published a list ranking the companies from across the globe that have filed the most blockchain-related patents. At the top of the list is one of China’s largest technology firms, with 90 filings. Several U.S. companies from various industries are on the list, including blockchain startups, banks and credit card companies, traditional technology and consulting firms, and consumer products firms. Just this week, two more blockchain patent applications were published from well-known U.S. companies. One application is by a major retail firm, and seeks to patent a blockchain system for managing product deliveries by autonomous drones, robots and similar devices. The other application is by Winklevoss IP, LLC, and seeks to patent a system for securely storing blockchain-based assets.
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