Diamonds, UNICEF and The Music Industry, What Do They Have In Common?by Fintechnews Switzerland December 21, 2016
There’s been a lot of talk about blockchain over the past year. Sometimes I think back to when I opened the first Blockchain Conference back in 2015, and the look of bewilderment on people’s faces as they tried to get their heads around my chosen focus. ‘Don’t you mean bitcoin?’ they used to say.
But the distributed ledger technology that was initially overlooked as the underlying tech that facilitated bitcoin transactions soon rose to prominence and is now being discussed at a global level by key players and not just in the financial sector. Investors, developers and entrepreneurs have recognised the versatility of Blockchain and its potential for greater transactional speed, security and simplicity.
PSD2 and Blockchain
As the relationship between countries fragments, blockchain will take a leading role in financial services, notably cross border payments and trade finance, and leading concepts that have been in the making will see the necessary investment that lifts them off the page and into fruition. The planned revisions to PSD2 in 2018 will undoubtedly lead to stronger relationships between banks and fintech start-ups over the coming year.
Closer to home, the UK government will take centre stage as the driving force behind blockchain development. This year saw Credits awarded the first G-cloud blockchain platform-as-a-service agreement by the government – a major step forward in public sector acceptance of the technology.
There’s no doubt more UK government funding will be pumped into blockchain, in a report on the subject, the Government Chief Scientific Adviser, Sir Mark Walport, wrote: “distributed ledger technology has the potential to redefine the relationship between government and citizens in terms of data-sharing, transparency and trust,” which accurately sums up the benefits for wider society, from healthcare to pensions.
Something that’s impossible to miss is the wide variety of sectors that blockchain is applicable to. Supply chain transparency and simplicity of asset transfer make it a popular point of focus for industries that rely on provenance, such as the diamond trade. To have an immutable ledger that traces the authenticity of precious materials all the way back to their inception is of obvious benefit and investors will no doubt be pouring money into platforms that confirm attribution and improve logistics.
Cut out the middle men, Brexit and Trump…
Systems that cut out the middle men, streamline processes, cut costs and prevent fraud are of natural interest to sectors that count the pennies. With charities, large scale aid and infrastructure projects always see a percentage fall through the cracks. The digitisation of aid will continue as organisations like UNICEF work on projects (e.g. Donercoin) to increase transparency in global aid.
Additionally, the creative industries, historically underfunded and plagued by complex revenue streams, will look to the support of big names to promote blockchain as a means for ensuring artists are paid fairly and digital content is accurately measured and attributed to the right parties, taking blockchain into the mainstream.
2017 is set to be a year of many uncertainties: Article 50 & Brexit, global markets, Trump… but the one thing that you can be sure about is that fintech will play a big part in helping to overcome some of the bigger obstacles that we face, and London will lead the way, as it always has, with innovation and expertise in developing new technology.