Blockchain technology is the topic du jour, most of the world’s major banks seem to be tinkering with it, and startups focussed on the area seem to be springing up every other week. It was no surprise, then, that there was a lot of talk of distributed ledger technology at this week’s Money20/20 Europe conference in Copenhagen.
First up was a session on Monday, titled ‘Blockchain and digital currency: Regulatory perspectives’. Panellists included Brian Donegan, of the Isle of Man government; Kathryn Haun, of the US Department of Justice and Veronica McGregor, of law firm Hogan Lovells.
McGregor said forming consistent regulation in the US around financial applications of the blockchain, such as bitcoin and digital currency, would be difficult.
“The major concerns tend to be money laundering and financial crime, and each state has its own regulator in charge of money transactions,” she explained.
Monica Monaco, founder and MD of Trust EU Affairs, said that, largely, players in the blockchain and cryptocurrency space are pro-regulation, as the existence of some formal rules would serve to add legitimacy to the industry.
Later in the day, Sir Michael Moritz, chairman at Sequoia Capital, while in conversation with Nancy Hulgrave, anchor/correspondent at CNBC and Sebastian Siemiatkowski, CEO and co-founder of Klarna, had some pretty negative things to say about blockchain.
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He described it as an “elegant proposition for mathematical textbooks, but not an actual solution for reality”, and gave a simple “no” when asked by Hulgrave whether he believes blockchain is worth the hype.
Lasse Birk, co-founder of blockchain payments provider Coinify, kicked off proceedings on Tuesday with an early session entitled ‘How blockchains are changing payments, finance, contracts, and more’.
Birk used the session to announce his company’s global expansion with KYC compliance service provider, iSignthis.
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— Coinify (@coinify) April 5, 2016
Later, in an interview, Lu Zurawski, solutions practice lead of consumer payments EMEA at ACI Worldwide, said he’s interested to see the outcome of the experiments many banks are taking part in with blockchain startups, however, he’s not convinced it will be the game-changer some hail it to be.
“The bitcoin blockchain, for example, is too immature for payments at an institutional level,” he said, “and it’s not able to scale”.
He went on to say the company has been using aspects of distributed ledgers for up to five years already, but it’s main focus, for the past three years at least, has been in universal payments and SAAS. Zurawski, who works from ACI Worldwide’s Watford office, said: “That’s the future of what we’re doing, in terms of our acquisition strategy.”
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ACI Worldwide works with some large retail partners, but it also has a keen interest in working with startups, to make sure the firm stays innovative.
Zurawski’s colleague Mark Ranta, head of digital banking solutions, explained the firm has invested in multiple startups, with the most recent acquisition being Munich-based FinTech firm Pay.on. He said when it comes to acquisitions, the firm doesn’t discriminate in terms of company location. “If there was an interesting company on the moon, we’d buy them too,” he joked.
Trust in transactions
Back on the blockchain front, Nick Williamson, co-founder of Credits, delivered a session called ‘Credits Blockchains to establish trust in transactions’. He announced the launch of the public beta test version of his company’s new Blockchain Platform-as-a-Service (PaaS).
It is designed for developers, enabling them to “launch a blockchain in 3-steps”, without the need to learn a new programming language.
Flavien Charlon, CEO and founder of Ireland-based Coinprism, took to the stage later to give a session called ‘Openchain: Bringing blockchain technology to the enterprise’.
He spoke about his company’s experimentation with the bitcoin blockchain, and the realisation it was too slow and expensive for companies to use, plus wasn’t a feasible option as competing companies would have to share the same chain. That’s when he created Openchain – a private blockchain that enables enterprises to set their own rules.
Focus on the tech, not the cryptocurrency
Over on the main stage, Blythe Masters, CEO of Digital Assets Holdings, sat down with CNBC’s Nancy Hulgrave. The pair went back to basics, with Hulgrave asking Masters to give a simple explanation of the technology.
Masters said, unfortunately, a lot of people’s perceptions of blockchain have been tainted by negative stories about bitcoin.
“I ask people to forget everything they have read about cryptocurrency and think about something no more intimidating than good old database technology,” she added.
Masters explained that, for the first time, independent entities can responsibly share and track information without the possibility of it being altered or erased.
She went on to say the technology could cut 30% to 40% from post-trade costs, so the incentive is there for companies to work out a viable implementation. Masters added she believes we will see this technology deployed in a commercial setting in a matter of years.
However, she doesn’t believe there will be “one ledger that rules them all”, instead we will end up with different ledgers for different asset types, but there will be interoperability so transfer between ledgers can occur, if necessary.
Rounding off the session, Hulgrave asked whether blockchain technology will change the world.
“It is doing so as we speak,” Masters replied.
A promising technology
Rupert Keeley, SVP, EMEA at PayPal and CEO of PayPal Europe Bank, agreed in the following session.
“Blockchain is very promising,” he said, before going on to speak about innovations in payments technology more broadly.
“We’re in the midst of a revolution, and technology is driving this revolution, but consumers are at the heart of it,” he said.
After lunch, a panel discussion called ‘Consumer uses of the blockchain’ took place, featuring Jeremy Millar, of Ledger Partners LLP; Pascal Bouvier, of Santander InnoVentures; Nic Cary, of Blockchain; Joseph Lubin, of ConsenSys; and Ville Sointu, of Ericsson Mobile Financial Services.
The panel spoke on both the benefits and challenges of working with the technology.
Bouvier stated that, throughout the history of mankind, we’ve always aligned ourselves vertically – there has always been a chain of hierarchy, be it in a tribe or a nation state – but blockchain tech is enabling people to arrange themselves horizontally. This, he said, is perhaps blockchain’s most revolutionary feature.
He went on to say blockchains also give people the ability to do certain things, such as store value and prove who they are, without Big Brother looking over them.
Ville delivered something of a reality check, stating that, while everyone in the room may well be extremely enthusiastic about blockchain, the average man on the street simply doesn’t care.
Further sessions on blockchain took place later in the day, one called ‘The R3 initiative: How incumbents can capitalise on the value of ledger technology’ and another called ‘A fork in the road: Bitcoin getting to scale’.
While much of the conference didn’t even touch on the subject, it was clear to see blockchain technology has piqued a lot of interest, and is likely to still be a hot topic at the next Money20/20 conference.
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