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Australian Securities Exchange Partners with VMware to Go Blockchain in 2021

Applying Blockchain to CHESS, the Australian Securities Exchange (ASX) will use blockchain for its registry, settlement and clearing system by 2021.

A recent press release shows a new agreement with the NYSE listed companies namely VMware and Digital Asset holding and the ASX for the replacement of the CHESS system by 2021. The three-party memorandum of understanding (MoU) with these companies will merge blockchain projects in Australasia and equally the coordination to restore the equities clearing and settlement.

Additionally, the MoU consists of supporting the open-source smart contract, especially the programming language called DAML (partially owned by the ASX).

In 2017, we saw the disclosure for the blockchain replacement of the CHESS system with clear efficiencies such as quicker transaction, decreasing costs and heightened security. The process has experienced delays in terms of implementation as it requires lengthy periods for user development and testing. The first implementation in early May 2017 exhibited the first code app on the new platform called the “Customer Development Environment.”

The ASX deputy confirms the alignment of this new partnership with the company’s beliefs as well as its commitment to delivering the distributed ledger technology, on track to replace the CHESS replacement system.

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Canada to Become the Global Leader in the Blockchain Industry, Report Indicates

In a recently published report by the Canadian Chamber of Digital Commerce, showed that Canadians in the blockchain industry are amongst the highest paid professionals in the country. The report also noted that Canadian blockchain companies want more legal clarity, to understand where their government stands regarding cryptocurrency regulation in Canada.

The study was conducted by the Blockchain Research Institute (BRI) with support from Accenture and collected data from more than 150 participants in the blockchain and cryptocurrency sector.

The report stated that the average salary of a “blockchain worker” in Canada in 2018 was almost nearly double the Canadian national wage average. Notably, the blockchain community has been active in the past few years to educate policymakers regarding the state of the blockchain ecosystem. According to the report, blockchain entrepreneurs emphasized the lack of legislative definitions and the inconsistency for categorizing and understanding the differences between digital assets from securities.

Senator Deacon said:

“Our regulators are working to manage important risk factors like consumer protection, privacy and confidentiality, financial crime, and financial stability. This is really important.”

Tanya Woods, the managing director of the Chamber of Digital Commerce Canada, stated:

“There is an opportunity, and arguably a national mandate, to manage important risk factors beyond the mandates of securities regulators. In provinces, we need to see various departments of finance and innovation take pro-growth positions to support the non-securities aspects of digital assets and blockchain technology.”

The blockchain community in Canada has acknowledged the need for a more blockchain education for the public as well as all levels of the government to support future progress.

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Partner at Proof of Capital Presumes That China’s Digital Currency Could Go Live in No Time

In her view, Edith Yeung, fund manager, and partner at Proof of Capital, a blockchain-based venture capital fund, presumed that the Chinese Government could launch their digital currency, virtual yuan, in no distant time, assumably, within the next six to twelve months.

While speaking to reporters at East Tech West conference in the Nansha district of Guangzhou in China on Wednesday, Yeung stated that China has been working on creating its digital currency for the past few years.

“So I think definitely within the next 6-12 months,” she excitedly presumed. Yeung maintained that even though the US dollar remains the major global currency, the upcoming Chinese yuan has the possible potential to challenge it.

Yeung then said that she believed the Chinese government is being quite strategic in bringing about the adoption of the digital Yuan, which would make many countries to want to work with China.

“I think the Chinese government is being really smart about driving the adoption of RMB (renminbi, another name for the Chinese yuan),” Yeung said. “Can you imagine, especially for the One Belt One Road initiative, they (start) to lend all in virtual RMB? Many of these countries will want to work with China to start adopting virtual RMB.”

She then offered the United States to come up with better policies and strategies that will lead to the creation of a digital dollar. “I really think that the United States needs to hurry up to have strong thinking and policy, at least a direction for virtual USD,” she said.

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First in the World? Lithuania Central Bank Approved Blockchain-based Digital Collectible

As revealed in a recent press release, the Bank of Lithuania has approved a sample size of the physical version of LBCOIN, a silver digital collector coin equivalent in value to €19.18. The coins were produced to commemorate the year of the Act of Independence of Lithuania and its 20 signatories.The sizing and form of this coin will be like that of a credit card, equally, it will depict the Act of 16 February 1918. The coin features a digitized picture of the Council of Lithuania as well as a Lithuanian Flag on one side coin. To add to its value, the national anthem has been inscribed in binary code. The other side of the coin showcases the Vytis – the coat of arms which represents the Republic of Lithuania.

The digital token was designed by Giedrius Paulaskis, and the Bank of Lituania is preparing to release 24,000 blockchain-based digital collector tokens. Every one of these tokens will feature one of the 20 signatories of the Act of Independence.Upon purchasing the digital coin, the collector will get one of the six randomly selected digital tokens. Once they have a collected token from each of the six available categories, they will be eligible to exchange the set for a physical silver coin.

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Standard Chartered's Planned Hong Kong Virtual Bank Announced as Mox

Mox Bank Limited, or Mox, will be the name of the new virtual bank in Hong Kong to be launched by Standard Chartered in partnership with PCCW, HKT, and Trip.com. Launching later this year, the mission of Mox is to help everyone in Hong Kong grow – “your money, your world, your possibilities.”

In today’s announcement declaring the new bank’s identity, Deniz Güven, CEO of Mox, said “Mox operates in a whole new way by listening to customers and focusing on heart share. We aim to empower Hong Kong customers to grow and unlock more possibilities by providing a truly digital and personalized banking experience.”

According to the release, the Mox logo was inspired by the round shape of a Hong Kong dollar coin, a nod to the founding collaborators’ roots. Standard Chartered, who was responsible for the first Hong Kong banknote issued, will now serve the community in the newest form of banking.

The Emergence of Virtual Banking

Hong Kong’s currency board and de facto central bank, Hong Kong Monetary Authority (HKMA), introduced the virtual banking license in 2017 for a “new era of smart banking.”

Since then, there have been eight licenses granted, one of which includes SC Digital Solutions Limited, the Virtual Bank by Standard Chartered (official name now revealed as Mox), a joint venture between Standard Chartered Bank, PCCW, HKT, and Ctrip. HKT and parent PCCW are one of the dominant telecommunication companies in the region. Ctrip is a Chinese online travel agency that is under the same parent company as Trip.com.

The development of Mox Bank Limited by Standard Chartered started around 2 years ago, with preliminary research in ethnographic research to understand the market. Ethnographic research helped with understanding the needs of the market and the consumers’ behavior. Güven said, “If we can understand the real behavior behind it, we can build new services.”

Güven told Blockchain.News that the Virtual Bank by Standard Chartered had reached out to over 2000 people in Hong Kong from different classes and demographics to understand the needs of the market in the planning stages of Mox. “We identified different pain points in Hong Kong. There are a lot of good banks in Hong Kong, and Hong Kong’s banking systems are one of the best in the world. From a product perspective, there is a huge maturity.”

In terms of whether blockchain will be implemented in the virtual bank, Güven said: “We have some plans, but not for day one. I see blockchain as a digital currency, but it can be more than just a currency. It’s behavior.”

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Wyoming State Says Cryptocurrency Represents Property, Allows Insurers to Include Digital Assets in Investment Portfolios

The US state of Wyoming has recently amended its insurance code that will allow local insurance companies to invest in digital assets like cryptocurrencies. The new amendment will only include insurance companies operating within the state. This important announcement is set to drive institutional money from local insurance into the cryptocurrency market.

The state sees cryptocurrencies as ppportunity

The new law, which will come into effect as from 1st July, specifies that an insurer may invest in digital assets. The state of Wyoming defines digital assets as a representation of economic, proprietary, or access rights, which is stored in a computer-readable format, and include digital securities, digital consumer assets, and virtual currencies, which include cryptocurrencies like Bitcoin.

The law defines cryptocurrencies as digital assets, which serve as a unit of account, a store of value, or a medium of exchange. It further defines cryptos as assets that are not recognized as a legal lender by the United States government. Based on the new legislation, insurance firms are now allowed to invest in various digital consumer assets, which are defined as digital assets that are bought or used mainly for household, personal, or consumptive purposes.

One of the US law firms, Kramer Levin, commented on the recent amendment made. However, the company recognized the amendment as the first provision of such nature made in the country. The firm stated that it remains to be seen whether insurance firms would take advantage of this law. This is because insurance firms are traditionally conservative with their investment portfolio as they normally invest in mortgages and high-grade bonds. Since the financial markets show huge volatility, the cryptocurrency’s non-correlation could be something beneficial for them.

The firm further identified that the law does not address some major issues like liquidity risk, accounting treatment, or valuation.

Caitlin Long, the CEO and founder of Wyoming-based forthcoming crypto bank Avanti also commented on the new law. She stated that most likely local insurance companies would offer this part of variable life policies instead of whole life because NAIC (National Association of Insurance Commissionaires) capital charge would be high.

First crypto-native bank set to be launched in the United States

Wyoming remains of the most blockchain and crypto-friendly states within the US. In February, Caitlin Long, the former Wall Street Executive who helped Wyoming state to enact 13 blockchain-enabling laws, revealed her plan to establish the first-ever crypto-native bank in 2021. The regulated bank is set to offer its crypto custody for big institutional money and to act as a bridge for federal reserve for payments. Caitlin is making this to become a reality because of the progressive Wyoming legislature that recognizes cryptocurrency as money and allows favorable tax treatment of crypto, among other friendly measures.

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Head of Chinese Investment Firm Believes Blockchain will "Lead" China's Economy, Here's Why

China’s blockchain push seems never-ending, various governmental and financial officials of the country have, in recent times, spoken on the merits of blockchain technology and how a distributed ecosystem may help bolster the ongoing “fourth industrial revolution.”

Oncoming digital globalization

Dr. Xiao Feng, who serves as the VP of China-focused investment fund China Wanxiang Holdings, spoke at the M&A Summit in Shanghai last week, elucidating about blockchain technology as a tool to help realize the “digital globalization.”

In his keynote attended by investors and high-ranking officials, Feng said the ongoing globalization will shift from a physical aspect to a digital one, with blockchain technology serving as a primary feature of the latter.

Feng pointed out the “digital trust mechanism” presented by distributed computing systems help with data detectability, immutability, and irrevocability, recognizing that no critical data can be tampered with when moved to a blockchain-based system.

Calling out the pandemic and ongoing US-China trade war, Feng believes globalization has benefited “Wall Street” and many international companies in the past. However, the behavior ended up creating “victims” of a profit-based economy, referring to the middle class and industrial works.

But blockchain can help close that gap. Feng noted, “With the help of digital technology, the labor force can be traded from now on, and employees do not need to move from the United States to China, although the industry moves to China.”

Blockchain an infrastructural shift

Feng’s words can bear true in 2020. The COVID-19 pandemic has caused many firms and economies to move to a relatively decentralized system, in terms of infrastructure, while a general lack of trust is spewing among citizens of various countries.

With blockchain technology, newer ways of trackability for tasks will be explored. Examples include a more-goal driven approach than the previously used measures of gauging an employee’s performance, such as marking attendance over actual work output.

With regard to the above, Feng said businesses will undergo a massive digital change and an “overhaul” of their administrative practice. He added that “the industrial revolution has reached the degree of diminishing marginal utility.”

For the uninitiated, marginal utility states the usability of a service or good declines as its supply increases. Economic actors devote each successive unit of a good or service towards less and less valued ends.

Malaysia’s Securities Commission Legalizes Digital Asset and Crypto Trading

Malaysia’s Securities Commission (Shariah Advisory Council) has announced that the trading of digital assets is now legal in the country. The Securities Commission is the regulatory authority that oversees the implementation of Islamic laws in the operations of Islamic financial institutions.

Datuk Syed Zaid, the Chairman of the Securities Commission, said that the regulator has resolved key issues facing regulations of digital currencies in a principled manner.

Big Crypto Gains

Malaysia has experienced exponential growth of interests in the crypto market but there have also been inside trading abuses, market manipulation, and some exchanges were even involved in predatory and deceptive practices. All these have led to the need to reposition the existing financial regulatory framework to incorporate the supervision of the crypto market in the country.

Datuk stated that the regulator has resolved that trading and investment of digital currencies and tokens are permissible in registered digital asset exchanges. He said that in a teleconference panel session at Invest Malaysia 2020 here today. He said: “This is a really ground-breaking resolution by SAC (Shariah Advisory Council) that could spur greater development and investment in digital assets.”

Datuk stated that the commission’s resolution has been finalized, and the agency would issue further details later.

The commission has currently allowed three digital asset exchanges (including Tokenize, SINEGY, and Luno) to operate in the country.

As per the report, the agency has approved at least four digital assets in the nation up until this month.

SINEGY is the first crypto exchange approved by Malaysia’s securities regulator. The founder of SINEGY, Kelvyn Chuah, termed the announcement as having extreme significance as more than 60% of Malaysians are Muslims. He said that the announcement has cleared several ambiguities associated with digital assets. Chuah is delighted by the announcement that the country has made. He revealed that Malaysia aims to become the hub of Islamic fintech and finance.

Chuah said that currently, all regulated trading activities of digital assets are allowed, but many non-compliant activities are not permitted. He said that the crypto industry in the country is closely waiting for the commission’s full guidelines on trading and issuance of digital assets. Chuah mentioned that crypto operators think that the regulatory authorities may consider creating a regulated digital asset derivatives market in the future.

As the Malaysian Muslim community is still awaiting a Shariah-compliant resolution for the trading of digital assets, crypto firms such as SINEGY now can explore potential services, which may welcome more Muslims into the digital asset space.

Malaysia Leading the Way in Crypto Regulation

The status of the cryptocurrency industry in the country had been unclear until the recent announcement by the Securities Commission. Crypto trading was not termed illegal but remained unregulated.

In February 2019, Securities Commission Malaysia (SC) announced that the nation would be implementing new regulations on the trading of digital assets and ICOs (initial coin offerings). Malaysia’s finance minister, Lim Guna, said that new regulations guiding cryptocurrency trading would assist in serving as criteria for exchange operators and coin issuers. That would also assist in ensuring standard practice in terms of trading, pricing, and asset protection.

The new regulations require any digital asset offering to get approval from the Securities Commission. Such offerings are also required to meet counter-terrorism financing and anti-money laundering rules. Any trader identified trying to bypass the law would be subjected to a fine up to US$2.4 million (RM10 million) or a prison sentence of up to 10 years. The country’s central bank and the Securities Commission said that new rules aim to help protect investors’ assets and create fair trading.

Bank of Lithuania Launches First Blockchain-Based Digital Collector's Coin As Test for CBDC

The Bank of Lithuania has launched the first central bank-produced digital collectors coin dubbed “LBCOINS” as part of its trial of blockchain technology and testing in its development of central bank digital currencies (CBDC). The Central Bank of Lithuania has been developing the project since March 2018 and is currently entering the final phase of the trial.

Wake-Up Call for Central Bankers

Deputy governor of the Bank of Lithuania, Marius Jurgilas, said: “No one in the central bank community was thinking about digital currency seriously before we realized that there is a legitimate threat that someone else will take our space.” Jurgilas further stated: “We need to provide society with what it wants.”

The Bank of Lithuania said that its project is more of an experiment rather than an official launch of a tradable digital currency. Lithuania’s central bank sets to issue the blockchain-based LBCOIN on July 23.

The LBCOIN design consists of one physical silver collector coin and six digital tokens. This means that users who purchase LBCOIN would first get a set of six digital tokens, which can then be exchanged for a physical silver collector coin.

Pre-sales for 24,000 digital LBCOINs will begin this week, sold in packs of 6 digital tokens for €99. Each digital token would feature a portrait of one of the 20 signatories who signed Lithuania’s Declaration of Independence in 1918, which has been divided into six categories: academics, diplomats, presidents, industrialists, municipal servants, and priests.

Users will be able to buy LBCOINs in form of six digital tokens and then exchange for a credit card-sized physical silver coin worth €19.18. The Bank of Lithuania clarified that: “Their use as a means of payment will not be encouraged” as it is meant to “engage more people, especially the youth, in coin collecting” while gaining “valuable experience and knowledge in the field of digital currencies.”

Jurgilas said that the LBCOIN is based on a similar method of creation as the one being developed for their CBDC (central bank digital currency). This initiative puts Lithuania at the forefront of the development of a state-backed digital currency. Jurgilas said that LBCOIN is the most advanced experimental project to test different reincarnations of the central bank digital currencies.

LBCOINs can be exchanged directly with the central bank as well as on private blockchain networks. LBCOIN is built on top of the NEM public blockchain. Once purchased, the LBCOIN can be stored in a NEM wallet or a wallet dedicated to the LBCOIN’s online shop. Furthermore, LBCOIN can be swapped with other purchasers and also sent as a gift.

CBDCs Hit Top Gear Amid COVID-19

The steady decline in the use of physical cash and the prospect of Facebook’s 2.5 billion users adopting Libra cryptocurrency has led central banks to explore how they can issue their own forms of state-backed digital currency. The COVID-19 outbreak has accelerated the development of central-bank digital currencies as it has prompted people across the world to turn to cashless payments. Central banks are seeking to introduce CBDCs to avoid fragmenting the monetary and financial systems.

Why the World Needs a Blockchain Consensus Operating System

The true potential of blockchain to transform the lives of people around the world has clearly not been realized.

For all the progress that could have been made so far, the reality is that this powerful technology remains the preserve of a small group of technology and finance enthusiasts. What I find so disappointing about this is the fact that it could be improving people’s lives in so many obvious ways right now if it was being properly directed to the needs of the people.

Blockchain technology and smart contracts can enable huge efficiency savings as economies digitalize. They can rid a whole range of industries of fraud and compliance costs while automating any number of services that intermediaries currently charge for as ‘value-added services’.

Crucially, these technologies can improve our day-to-day lives by making them quicker, simpler, and safer when used within a system that reflects the societal structures that people recognise today. It is for all these reasons that the world needs a blockchain consensus operating system.

Existing blockchains aren’t improving people’s lives

You don’t have to look very hard at the world around us to see that existing blockchain technology has failed. Just look at a process like international travel, which so many people have become familiar with over the years as part of their business and leisure activities.

You need to arrive at an airport, check-in, pick up a boarding pass, use it at security, show your passport at border control and repeat this process at any number of checkpoints where airport or airline staff require it. These processes are built on identity checks across multiple systems that make the entire process slow, inefficient, and unenjoyable.

Blockchain technology can be used to confirm the identity of an individual once and allow that identity to be confirmed without data sharing across this entire user journey, enabling a seamless and enjoyable transition for travelers. Furthermore, as the world deals with the COVID 19 pandemic, safe travel could continue because virus-free status could be attached to an identity, thus confirming free passage but without the need to share personal information.

The efficiency savings that blockchain technology enables should span a whole range of human activities as we understand them today. Travel is just one example but there are many more interactions that can be improved, with the list growing even longer if you consider the economy and the way businesses operate within it.

For example, compliance costs in regulated markets have risen to billions of dollars every year. All of the processes involved are just a series of checks and balances that need to be confirmed one way or the other. However, they are highly inefficient and expensive because they are built around paper processes being actioned manually by people. It is truly staggering to think of the amount of money that could be saved if blockchain technology and smart contracts were being used to automate processes in so many situations.

Fortunately, there are seeds of hope for the future as forward-thinking economies start to embrace the potential of blockchain.

Blockchain can enable regulated digital economies

Some countries have embraced blockchain for some time while others are just beginning to.

In the case of Georgia, where I was born, it has had a large cryptocurrency industry for some time but the government has also used blockchain technology to improve services in a number of areas. The most notable example is land registrations. In 2016, Georgia’s National Agency of Public Registry began a large blockchain implementation and by 2018 had registered over 1.5 million land titles on this blockchain-based system.

One of the most standout examples of blockchain-based government so far though is Estonia. It was the first nation-state to deploy blockchain in production systems in 2012 and is now using it across healthcare, property, business, courts and many other government registries. The use of blockchain technology is helping to power 99% of public services in the country that are available as e-services.

Some might argue that Georgia and Estonia are not large economies or major global powers, so their use of blockchain technology is not significant for the global economy. Certainly, there is an argument that the world’s major economies need a new blockchain system and I will return to this shortly. However, to disregard these countries’ use of blockchain doesn’t take into account that other, larger nations are also starting to investigate the technology with increased interest.

Specifically, many of the world’s biggest economies are looking at how to implement Central Bank Digital Currencies (CBDCs) powered by blockchain technology. The Bank of England, Bank of France, Bank of the Netherlands, Bank of South Korea, Bank of Thailand, Bank of Canada and the European Central Bank are all following this path, and this sort of mass movement by major economies is certainly significant.

However, for these leading nations to use the technology for their various CBDC initiatives within regulated digital economies, a new blockchain consensus operating system is required.

The blockchain consensus operating system our world needs

For governments around the world to harness the power of blockchain, they cannot rely on the existing blockchain networks. These networks advocate decentralisation and anonymity above all else, which will never be aligned with the requirements of a sovereign state.

Governments are elected by their citizens to keep them safe and help them prosper. To do this, they must be able to regulate the digital economies that individuals and corporations operate in. They must be able to identify and authorize these entities when they first enter the system, even if the sharing of personal data is controlled by the individuals from that point on.

To do this, you need a regulated blockchain controlled by sovereign states. This is why I designed L3COS as the world’s first blockchain consensus operating system for regulating digital economies.

The triple layer network enables governments to communicate and operate CBDCs from the top layer, via a proof of government consensus mechanism. They can then onboard other entities onto the network to interact in a regulated digital economy, with corporations at the second layer and individuals at the third layer, all interacting in an entirely decentralised manner.

Every interaction is automated via smart contracts, making compliance seamless for businesses and individuals’ day-to-day activities quick and easy. Governments are then able to regulate their economies without burdening the entities that operate within them. As a result, all of society is able to benefit from blockchain technology in a manner that hasn’t been possible before and which demonstrates why a new blockchain consensus operating system is so desperately needed.

About the Author

Zurab Ashvil is a serial tech entrepreneur who spent more than a decade at Softbank between 1995 and 2006, where he won awards from Microsoft, Dell, and EMC. As early as 1998 he was advising on Distributed File Systems design for Windows 2000: the basis of the Cloud.

Disclaimer

The views and opinions expressed in this article are those of the contributor and do not necessarily reflect the view of Blockchain. News. Investors should be well aware of the volatility of cryptocurrencies and conduct their own research before making investment decisions.