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Exclusive: Deloitte Blockchain Lab on the Three Areas of Collaborations with HKMA

The Hong Kong Monetary Authority (HKMA) started exploring blockchain technology with the whitepaper on distributed ledger technology (DLT) in Nov 2016. Since then, the HKMA has been actively leveraging blockchain into trade finance including eTradeConnect, Global Trade Connectivity Network, and we.trade. What is the role of Deloitte Blockchain Lab in these initiatives?

We were delighted to interview Dr. Paul Sin, leader of the Deloitte Asia Pacific Blockchain Lab, who shared with us its development goals and the collaborations with HKMA across the Greater Bay Area and Europe.

What is Deloitte Blockchain Lab and what values does it aim to bring to enterprises?

The Deloitte Asia Pacific Blockchain Lab has been implementing blockchain solutions for enterprises across the region. Apart from the Asia Pacific Blockchain Lab, Deloitte has another two centers, one in New York and one in Dublin, covering America and Europe, the Middle East, and Africa (EMEA) respectively.

Our Lab uses mostly permissioned blockchain technology for cross-organizational and cross-border B2B data synchronization. Due to regulatory constraints in the region, we do not have a lot of public blockchain or crypto platform implementations. However, other functions in Deloitte including audit, tax advisory, financial advisory, and risk advisory have been supporting Initial Coin Offerings (ICOs), Security Token Offerings (STOs), and crypto audit in general from an assurance and cybersecurity perspective.

What goals or projects have been established at the Deloitte Asia Pacific Blockchain Lab since the collaboration with the HKMA and the twelve leading banks in Hong Kong?

In Hong Kong and Asian countries in general, small to medium enterprises (SME) have only a 20% chance of obtaining financing. Banks reject their loan applications because of identity theft, forged documents, and huge potential losses due to duplicated financing. In the past, SMEs would make a purchase order and go to multiple banks for financing, and bolt with the money. There is also no reliable way to validate buyers who can issue purchasing orders. Banks will need to get KYC information on a buyer to prove the buyer who issued the purchase order is authentic and also make sure they have the capability to pay the invoice after the goods are delivered.

Once all these aspects are validated, then the banks will feel more comfortable financing SMEs. To overcome the challenge of duplicate financing, the only way available before blockchain was to create a credit bureau with a centralized database under which all banks will be asked to submit sensitive information and trade documents to a central party. Blockchain becomes the perfect platform because it can synchronize data to all participants in the ecosystem without risking their privacy. This is the reason why the 12 banks in Hong Kong joined together with the HKMA to develop eTradeConnect, which is a blockchain-based trade finance platform.

What are the top projects that Deloitte Blockchain Lab has been working on most recently?

We have done work on a number of projects, including bancassurance in the Greater Bay Area, traceability in Hong Kong, cross-border digital identity and multi-merchant loyalty programs.

Are most of your clients mainly from the Greater Bay Area or worldwide?

For the Asia Pacific, a lot of projects are regional. For example, the HKMA signed a Memorandum of Understanding (MoU) with Singapore to jointly develop the Global Trade Connectivity Network. This project is a cross-border infrastructure based on blockchain technology to digitize trade and trade finance. These kinds of platforms all have a regional focus.

The HKMA has also signed an MoU with we.trade, which is based in Europe, to support cross-regional trade finance. Many of the participants in those ecosystems are multinational companies, and a lot of value comes from cross-organization or cross border collaborations. This is also why the Chinese government also believes blockchain is a strategic initiative because it will be an enabler for the Belt and Road Initiative and the Greater Bay Area. This sheds light on why most governments, regulators, and central banks are adopting blockchain at the moment.

Do you also have some companies working on blockchain in the Belt and Road Initiative?

Blockchain technology is mostly facilitating supply chain and trade finance, therefore it will be closely related to those initiatives.

Ant Blockchain Open Alliance Seeks to Minimize Costs for SMEs

Ant Blockchain Open Alliance, an enterprise blockchain platform by Chinese financial giant Ant Financial, is expected to assist small to medium enterprises to generate their own blockchain applications at minimal costs.

As reported by Sina Technology on Jan 8, Ant Financial is expected to present the blockchain platform in February 2020 publicly. This announcement was made by the company’s vice president, Guofei Jiang, at the firm’s media meeting.

Notably, the beta launch of the Ant Blockchain Open Alliance was held in November 2019. Its primary objectives included the creation of multi-value, trusted, low-threshold, and low-cost networks.

Jieli Li, Ant Financial’s senior director of technology, ascertained that the company’s goal was creating a blockchain platform for the next generation of a credible value network.

Innovative Enterprise Blockchain Platform

Jiang affirmed that the Ant Blockchain Open Alliance had the capability of supporting 1 billion transactions daily through double-layer network design and scalability consensus. Additionally, it could attain 100,000 cross-chain information processing abilities per second.

Jiang noted, “The ant blockchain will be open to industry partners. In terms of serving the real economy, the ant blockchain has no competitors and only fellow travelers.”

The technological capacities of the blockchain platform are purported to be open, mature, and inclusive as insights from partners with extensive industry experience will be incorporated.

Up to this point, it has been reported that Ant Blockchain Open Alliance has been instrumental in helping resolve trust issues in at least 40 industries, including trade finance and cross-border remittances. Moreover, the blockchain platform has received 1,005 global patent applications.

Jiang views blockchain as the most valuable technology in the present age.

He affirmed, “We believe that in the future, blockchain will change people’s production and lifelike mobile payments and become the infrastructure of the digital economy.”

Ant Blockchain Open Alliance seeks to make small and micro-enterprises more advantageous by presenting them with lower costs, whenever they want to expand their blockchain capabilities.

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Ant Financial Launches OpenChain for China's Small Businesses to Leverage its Enterprise Blockchain Consortium

Ant Financial, the parent company of AliPay, has launched OpenChain, a new blockchain platform that gives developers and small and micro enterprises (SMEs) the power to leverage the Chinese blockchain giant’s proprietary blockchain consortium and efficiently and cost effectively deploy smart contracts and create decentralized apps (DApps).

Ant Financial Blockchain is the largest productivity blockchain platform in China with the ability to process and support one billion user accounts and one billion transactions every day. It has topped the global ranking for blockchain patent applications for the past three consecutive years.

The main blockchain platform has already been extensively used in enterprise blockchain solutions for firms such as Bayer in agriculture and China Everbright Bank in supply chain finance.

Jin Ge, General Manager of Blockchain Platforms for Ant Financial said, “Applications of blockchain technology have ballooned over the past few years. Through the launch of the OpenChain platform, we aim to help one million SMEs and developers innovate and explore more use cases in the next three years,” in the announcement this morning.

OpenChain Features

The OpenChain offering provides developers with a variety of ready-to-go modules that can be used to build trust in multi-party collaboration. This is especially useful in area such as supply chain finance, product provenance, digital invoices and charitable donations.

As China drives its blockchain campaign and business are encouraged to assimilate the technology, the OpenChain platform could helps SMEs to greatly reduce development and deployment costs of the technology applications and allows them to focus on product and service delivery.

Open Chain Building Trust in China

Blockchain companies have become a hot property in China over the last year and the rise in company registrations has surged following Chinese Leader Xi Jinping’s announcement last October that the Middle Kingdom must strive to become the blockchain leader.

According to a report from China Finance, many larger businesses across China are blockchain companies in name only and in fact have little to do with the groundbreaking technology.

LongHash data reveals that of the 79,555 registered blockchain companies in China, only about 26,000 are operating and 57,000 have lost their license and legal status.

In the first quarter of 2020, as the Coronavirus disruption began to shut down factories, offices and cities in China, a further 2,383 brand-new blockchain companies emerged.

OpenChain could be a potential solution to the frenzy for small businesses as its main purpose is to build trust in commercial and transactional usecases, the success of which may depend on multiple party collaboration.

According to the release, “These use cases require not only a trust mechanism among all parties, but also high-performance consensus algorithms that can complete authentication computation on the fly. Ant Financial’s OpenChain also uses trusted computing capabilities to enhance data security and protection for the apps running on its platform.”

WhiteMatrix, a provider enterprise blockchain app development services, has been using OpenChain to develop smart contracts for developers since 2019 when it began its alpha tests.

Wu Xiao, the founder and CEO of WhiteMatrix said of OpenChain, “The platform offers efficient blockchain development services, facilitates cost-effective smart contracts, and lowers the entry barrier for developers. Not only are OpenChain’s transaction speeds several times faster than public blockchain platforms like Ethereum, but the cost per transaction is only one tenth of others.”

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Fortune Business Insights: Blockchain-as-a-Service Market to Skyrocket to $24 Billion by 2027

Fortune Business Insights has revealed that the blockchain-as-a-service (BaaS) sector will escalate to $24.94 billion by 2027 from $1.9 billion recorded in 2019, representing a compound annual growth rate (CAGR) of 39.5%. According to the press release shared with Blockchain.News, this uptrend will be fueled by small and medium enterprises (SMEs) as they are viewing blockchain technology as an optimal solution for the numerous challenges they face, like access to bank loans, trade financing, and cash flow difficulties.

BaaS cuts out middlemen

SMEs are continuously looking forward to stamping their authority across the globe, but this necessitates considerable financial resources. BaaS is playing an instrumental role in simplifying access to different trade financing sources. Additionally, its decentralized nature is eradicating middlemen, making it favored by SMEs.

The World Economic Forum (WEF) believes that blockchain technology can be pivotal in bridging the trade financing gap globally. Recently, the WEF asserted that blockchain should be viewed as the vaccine for future disruptions like the one triggered by the coronavirus pandemic in the seafood industry, hence showing its confidence in this technological innovation.

SMEs are reaping the benefits in BaaS in supply chain processes as transparency, immutability, and traceability become inevitable.

The report also noted that the North American BaaS market stood at $1.01 billion in 2019 based on the significant number of blockchain development projects taking place in the United States. A market rise is expected in this region because BaaS solutions are continuously being integrated with public utilities services.

On the other hand, the BaaS sector in Asia-Pacific will be boosted by incredible blockchain investment by China, Japan, and South Korea governments.

Adoption of BaaS solutions by Huawei and Microsoft

Microsoft and Huawei have been setting the ball rolling in implementing BaaS alternatives. For instance, Huawei executed a blockchain service powered by Linux Foundation’s Hyperledge Fabric 1.0 to assist companies in incorporating smart contracts in supply chains in April 2018.

Conversely, Microsoft’s Azure blockchain service was adopted in May 2019 to assist customers design cloud-based blockchain networks.

BaaS is being viewed as the icing on the cake in many industries across the globe. For instance, leading fast-food chain, KFC recently opted for blockchain-enabled media buying and digital advertisements for its Middle Eastern customers.

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Ant Group Partners with Dell, Hewlett-Packard and Lenovo to Enable Access for its New Blockchain Solution—AntChain

Ant Group, formerly known as Ant Financial, the payments arm of Chinese e-commerce giant Alibaba, has launched a new blockchain solution, AntChain.

Ant Group has signed an agreement with Dell, Hewlett-Packard, and Lenovo to enable accessibility of IT leasing services for small to medium enterprises (SMEs) through the AntChain blockchain solution.

The launch of AntChain aims to strengthen transparency and to build trust in industries involving a large number of participants and involves long and inefficient processes, such as supply chain. The executive chairman of Ant Group said:

“Since our inception, building trust has been core to our offer to customers. We believe in blockchain’s potential to redefine trust in the digital age, and in solving real-life problems for our customers.”

The AntChain blockchain solution leverages emerging technologies including artificial intelligence and the internet of things (IoT). The new blockchain solution has been used in more than 50 use cases so far, in IT leasing, shipping, insurance claim processing, cross-border remittances, and even donations, according to the company.

Ant Group has been exploring the use of blockchain for its commercial applications since 2015, and has now reached the milestone where it has the capability to process and support one billion user accounts and transactions every day.

According to Ant Group, there are over 100 million digital transaction records, copyright certificates, property ownership certificates, and digital assets uploaded onto AntChain every day.

Ant Group’s OpenChain blockchain platform

Ant Group launched OpenChain in April 2020, a new blockchain platform that gives developers and SMEs the power to leverage the Chinese giant’s proprietary blockchain consortium and efficiently and cost-effectively deploy smart contracts and create decentralized apps (DApps).

The main blockchain platform has already been extensively used in enterprise blockchain solutions for firms such as Bayer in agriculture and China Everbright Bank in supply chain finance.

Ant Group set to top Hong Kong and Shanghai’s IPO market in 2020

Ant Group has announced earlier this week its intentions of launching an initial public offering (IPO) that would be featured both on the Shanghai Stock Exchange’s STAR board and the Stock Exchange of Hong Kong.

By dually listing the IPO on both HKEX and the Shanghai Stock Exchange, Ant hopes this will broaden the horizons of the fintech firm globally. Jing, commented on the IPO listing saying, “The innovative measures implemented by the SSE STAR market and the SEHK have opened the doors for global investors to access cutting edge technology companies from the most dynamic economies in the world and for those companies to have greater access to the capital markets. We are thrilled to have the opportunity to play a part in this development.”