In this issue:
Governments around the world are seeking to harness blockchain to improve the delivery of public services. In May, a few dozen deployed military service members and their families used blockchain to cast their votes in West Virginia’s primary election. Voters verified their identities using biometric tools and then voted using their mobile devices on a blockchain application. If the program can be successfully implemented on a wider scale, voting through the internet would eliminate the hassle of submitting and counting paper ballots, and provide for a faster tallying of votes. Another U.S.-based initiative is underway in Berkeley, California, where city officials are seeking to offer municipal bonds in the form of blockchain-based assets. The states of Delaware and Illinois have also organized initiatives to explore how blockchain can be used to improve the way that government works.
Outside the United States, examples of countries that are seeking to implement blockchain solutions for government systems include Switzerland, Sweden, Georgia, Estonia, Malta, Bermuda, Chile and Singapore. One of the more ambitious initiatives is taking place in Dubai, which has announced plans to move Dubai’s visa applications, bill payments and license renewals to the blockchain by 2020. Dubai estimates that these activities currently generate 100 million documents annually, and that migration to the blockchain could save 5.5 billion dirham, or approximately $1.5 billion, annually.
On May 21, 2018, mayors from around the world convened in Italy to discuss how technologies like blockchain can improve civic functions. According to a New America post, the event generated recommendations for how cities can prepare for blockchain solutions by doing the following: ensuring that the data they feed into the blockchain is accurate and organized, forming consortia to lower costs and promote efficiencies, and gaining a greater understanding of how blockchain converges with other emerging technologies like artificial intelligence and the internet of things.
To read more about what governments are doing with blockchain, see the following:
- Powering the Cities of the Future with Blockchain
- West Virginia Becomes First State to Test Mobile Voting by Blockchain in a Federal Election
- Berkeley, California, Is Considering an ICO Unlike Any Other
- Singapore Plans Blockchain Push to Boost Financial Inclusion
- Government of Malta Launches Learning Machine’s Blockchain Records Platform
In an effort to take advantage of the immutable nature of blockchain technology, Mastercard has submitted a patent application for a “Method and System for Authentication of Coupons via Blockchain.” With this patent, Mastercard hopes to store its customers’ coupon data on a blockchain, thereby limiting those who can access the coupons and reducing the risks associated with data manipulation.
Several players in the advertising, media and entertainment industries are exploring blockchain’s potential to combat fraud and improve transparency. Smart contracts, programs that can exist on a blockchain and facilitate transactions and other agreements, may be promising in this regard. For example, a new company, Atayan Inc., is currently developing a smart contract (the Smart Advertisement Transaction Token, or SaTT) that will include an advertiser’s specific campaign criteria and serve as a digital “checklist” that ensures that publishers fulfill the applicable criteria prior to being compensated for an ad’s placement. The SaTTs will also seek to assist advertisers with measuring a campaign’s performance on social media platforms, in addition to utilizing the more traditional impression and click measurements.
According to a recent article in Harvard Business Review, “[b]lockchain can make data-driven marketing more transparent by validating and analyzing every consumer’s journey through verified ad delivery, confirming that a real person saw the ad as per the specifics of a media contract.” Other applications being explored by advertising and entertainment firms include leveraging blockchain to tokenize fundraising efforts for independently produced movies and facilitating payment between advertisers, agencies and publishers.
To read more about advertising, entertainment and blockchain, see the following:
- Mastercard Looks to Blockchain to Make Coupons Immutable
- What Blockchain Could Mean for Marketing
- It’s Settled: Here’s The Best Case For Blockchain In Digital Media Buying
- Project Targets Fraud in Advertising With Performance-Driven Smart Contracts for Campaigns
- Five Tips For Blockchain Investing In Media, Entertainment And Advertising
On June 6, 2018, exchange-traded fund (ETF) providers Van Eck Associates Corp. and SolidX Partners Inc. (the “ETF Providers”) filed a request with the Securities and Exchange Commission (SEC) to list a bitcoin-linked exchange-traded product (ETP). The ETF Providers say the fund will hold bitcoin in cold storage and, importantly, the bitcoin will be insured against loss or theft. This move comes after the Winklevoss Bitcoin Trust ETF’s failure to garner the SEC’s approval due to worries over potential market manipulation. The ETF Providers are hoping to avoid certain pitfalls that have befallen other firms, by addressing regulators’ concerns such as high volatility and lack of market depth. They responded to those concerns by suggesting that ETP prices be based on an index that tracks over-the-counter trading by U.S. institutions regulated by the Commodity Futures Trading Commission. Linking the ETP prices to an index could allay those fears, because ETF indices generally have lower volatility. If approved, the new ETF will trade on the Chicago Board Options Exchange’s BZX Exchange.
Foreign crypto trading platforms have had more success in this space, where Chinese trading venue Huobi Pro launched a crypto-based ETF targeted at retail investors on June 1, and rival OKEx rolled out its own product just this week. OKEx’s platform was launched by OKCoin, previously one of the top exchanges in China. Both Huobi and OKEx’s platforms are available to Chinese investors but have put in place restrictions to exclude users from the United States and Hong Kong.
Other firms are taking an alternative route, instead seeking bank licensing or registering as broker-dealers. In a strategic move, startup firm Circle, a Goldman Sachs-backed venture, is looking to register as a federally licensed U.S. bank to trade crypto tokens considered securities while circumventing registration as a cryptocurrency firm in all 50 states. Meanwhile, on June 6, cryptocurrency exchange Coinbase announced that it is “on track to operate a regulated broker-dealer, pending approval by federal authorities.” Coinbase hopes to include real-time settlement and 24/7 trading as part of the exchange’s benefits. These moves may raise the hopes of the blockchain industry that the SEC will begin to approve so-called securitized token offerings as well as cryptocurrency funds linked to financial instruments trading on traditional exchanges.
To read more about crypto regulatory licensing, see the following: