In a recent interview on the ABC News program GMA3, Wyoming’s elected Senator Cynthia Lummis alleged that Bitcoin can serve as a good store of value. The former State Treasurer said that she hopes to bring Bitcoin and Cryptocurrency in general to the “national conversation” in the U. S.
“Our own currency inflates. Bitcoin does not. It’s 21 million Bitcoin will be mined, and that’s it. It is a finite supply. So I have confidence that this will be an important player in store of value for a long time to come.”
Lummis is the first Senator in the U.S. to currently own Bitcoin. She bought BTC in 2013 thanks to her son in law, Will Cole, Unchained Capital Chief Product Officer.
American and Aussie Politicians Highlighting Crypto
Senator Lummis is not the only politician who recently talked positively about the potentials of Bitcoin and crypto in general. Australian Senator Andrew Bragg spoke about the benefits and potential of blockchain technology during the online panel of the Future Of Financial Services 2020 conference.
The liberal Senator alleged that Australia needs to innovate and look further into blockchain technology to stay relevant in the financial realm. Bragg believes that blockchain can solve several critical regulatory problems in Australia, as well as globally.
“The future is blockchain technology. Instant cross-border transactions powered by blockchain may well be the solution for one-touch government with real-time international transactions.”
— Andrew Bragg
Bragg’s statements came shortly after S. Iswaran, Singapore’s Minister of Communications, urged all countries around the world to use a free flow of data across borders — highlighting the quick expansion and digitization of businesses and economies globally.
“It’s imperative we stay open and connected digitally. We should facilitate the free flow of data so international trade can continue to flourish and our people can remain connected to the global commons.”
— S. Iswaran.
A Weaker Dollar
Economists and investors are agreeing on something: the future of the USD is uncertain. Now that Joe Biden was announced president by the media, fear bases around the tensions between a Republican Senate and a Democrat president. A technical analyst from Token Metrics, Bill Noble, believes that this could especially devalue the dollar — and most investors would look to empty their weakling fiat into crypto.
As more politicians and institutions highlight the potential of digitized economies, traders and investors see Bitcoin and other crypto-assets and their backbone technology — the blockchain, as a haven against a seemingly weaker dollar.
Back in 2016, an Australian startup named AgriDigital was used to fulfill the first blockchain-secured Aussie grain transaction.
The transparency and extra level of security afforded by blockchain quickly grew a steadfast user base – and facilitated payments for over 1.6 million metric tonnes within the span of 2 years.
As of today, AgriDigital reports over 6000 active customers and over AUD 3 million worth of transactions – and it seems grain tycoons around the world have taken notice.
Europe Follows Suit
In 2018, a pilot blockchain transaction involving wheat grown in the Black Sea basin left Novorossiysk. Two years later, the results of more test runs carried out in Brazil, Japan, Algeria, and Ukraine are in – and Swiss firm Cerealia SA has launched its blockchain-based grain trading platform.
Andrei Grigorov – the CEO of Cerealia – stated that although the Russian wheat market pulls in numbers even in its current state, it could be improved. Blockchain was the technology chosen to enable more streamlined transactions involving grain – one of the main crops worldwide.
“Traders can now be 100% certain they really did the trade, versus traditional over-the-phone brokerage. Instantly, they have digitally signed contracts and blockchain-registered records forever.”
Russia is currently the number one producer of wheat worldwide – but Russia also produces large quantities of barley, vegetable oil, corn, and other grains such as buckwheat.
Cerealia SA representatives say that in the first week alone, transactions on the new blockchain-based platform have nearly reached 20 thousand metric tons of grain.
Earlier this year, France, the Netherlands, the USA, and China also put together a blockchain platform for grains grown in Brazil – another one of the world’s breadbaskets.
Grain is only one Australian crop secured by blockchain, however – earlier this year, the Australian Government provided AUD 150,000 in funding for Entrust – an agricultural blockchain platform rapidly gaining traction.
During the online panel of the Future Of Financial Services 2020 conference, Australian New South Wales Senator Andrew Bragg reaffirmed his support for blockchain technology, stating his belief that it may very well be the solution for regulation and fraud – owing to its traceability.
Andrew Bragg reminded the public that time zones had been a problem for regulatory bodies for a long time – and that blockchain technology is capable of reducing costs in this area.
Staying Competitive In The Financial Domain
The NSW-based blockchain advocate highlighted Singapore’s decision to build the world’s first global data exchange – and stated that Australia will have to take steps to ensure its competitiveness on the global financial market.
“Singapore’s ambition is to build the world’s first global data exchange, and we’re going to have to lift our game to compete with that.
Hong Kong will still be an important gateway to China, but because of the recent turmoil there and the foreign influence laws, they won’t have the same regional headquarter attraction. We would be mad to sit idly by and allow such a lucrative share of the market to lead to Singapore or to Tokyo.”
In order to maintain Australia’s position as a financial powerhouse, Andrew Bragg revealed that a group of 15 experts has been formed. They will brainstorm ideas on how to profit from the waning power of Hong Kong in the APAC sector – and how to remove bureaucratic obstacles faced by Australian businesses.
Last but not least, the senator reminded the audience that becoming a financing center has been a target of the Australian government for years.
Hinting that tax deals may be necessary in order to attract major companies, he added that this could only happen if the government was willing to change some policies – and adapt to new technology.
Two weeks ago, Australia’s Flinders University and SIMBA Chain grew closer via an MOU (Memorandum Of Understanding) targeting future research.
At the time of signing, the lead executive at SIMBA stated that, as a platform built by the University of Notre Dame and ITAMCO, SIMBA would like to help not just the USA, but it’s strategic partners in NATO and The Five Eyes as well.
Boeing Beaten By Blockchain
Following their participation in the Advanced Manufacturing Olympics that took place between the 20th and 23rd of October – a competition held by the US Department of Defense as a way to find innovative solutions for military manufacturing and communications – SIMBA won first place in one of the technical challenges.
Taking home USD 100,000 – and beating Boeing and Stratasys – SIMBA focused on blockchain-secured communication networks between fictional factories producing wartime material.
The challenge required competitors to find more efficient ways of getting supplies to soldiers and paramedics fighting on a fictional island under siege.
Joel Neidig – the CEO of SIMBA – explained the approach taken by SIMBA and what differentiated his company from the competition.
“We […] had six days to put together an entire war games solution to deliver critical parts to a battlefront, keep field hospitals operational and infrastructure like runways intact. What was different about our approach was how we met both the physical challenges of war fighters as well as the cyber threats that are playing a growing role in modern warfare.”
Using blockchain as a way to guarantee quality standards in 3D printing and mining – as well as guaranteeing against tampering with the materials in transit, sabotaging the war effort – SIMBA stood out and proved once again the many qualities of blockchain.
The corporate governance structure in Australia largely gives power to those in senior positions and as a result many investors become disengaged with shareholder participation. For shareholders, it is necessary to receive efficient and accurate information to access shareholding rights and in order to participate in corporate decision-making, it is important that investors are assured they will receive appropriate information relating to the company that is verifiably correct.
Obtaining information as an investor can often be a costly and time-consuming process, and confidence in the outcome of meetings can be undermined by a lack of transparency.
When a company becomes public, maintaining shareholder records can become complex and difficult. This system is highly fallible and frequently results in communications being particularly time-consuming or not reaching shareholders at all. The voting process itself could be limited by incomplete ballot distributions and incorrect voter lists. In a procedure known as ‘empty voting’, some investors ‘may use borrowed shares to temporarily cast a vote in a company without suffering from the economic exposure to the financial risks in the price of its stock’. Such practices distort shareholding incentives and affect the balance of the vote for other shareholders.
Voting can be delegated to the president of the meeting, particularly where shareholders are dispersed and unengaged. Empowering the President necessarily favours existing management policies. To date these issues have not been met with sufficient regulation by policymakers.
The development of distributed ledger technology is perhaps the most significant innovation for company shareholders to date. Popularised by the invention of blockchain in 2008, distributed ledger technology refers to a peer-to-peer network of data spread across multiple nodes. Its key feature is the lack of a central administrator – instead, updates to the ledger are achieved by consensus. The correct record is replicated and updated on all nodes in the network.
This technology has since been used to register shares in early experiments, allowing investors and issuers to interact with each other more directly. In 2015, NASDAQ’s platform ‘Linq’ was the first use of distributed ledger technology to successfully complete a private securities transaction. In 2016, Overstock.com was the first public company to issue stock through a blockchain platform.
Following pilot phases of this technology, several governments have set up conditions for companies to further integrate distributed ledgers in stock management. In 2017, amendments to Delaware law allowed corporations to use blockchain technology to maintain stock ledgers and communicate with stockholders. Any records can be kept on electronic databases and communication between stockholders can take place electronically. France has allowed share registration via blockchain since 2017. The French Government has authorised the use of distributed ledger technology for the issuance and transfer of ‘mini-bonds’ and unlisted securities. Following this direction, the French international banking group BNP Paribas announced that it was ‘expanding its blockchain platform for private stocks’.
Distributed ledger technology has also transformed shareholder voting. In a distributed ledger system, tokens may be allocated to eligible voters, who would subsequently transmit their vote to be registered on the blockchain.
Permitted blockchain technologies can then be used to manage vote counting. NASDAQ has developed a successful e-voting platform on their Tallinn exchange to facilitate voting transparency and increase investor participation.
As of 2017, NASDAQ confirmed a functioning proof of concept identifying users based on their Estonian digital ID, allowing investors to view information about meetings and vote before or during the meeting, manage proxy votes and review previous meetings and transactions.
A similar scheme of electronic voting was announced by NASDAQ in November 2017 for South African capital markets. In the same year, Broadridge declared a successful test use of blockchain to complete proxy votes in a private transaction.
The pilot program demonstrated the capabilities of distributed ledger technology in providing ‘insight into vote progress throughout the issuer’s proxy voting period, from meeting announcement date to the annual general meeting’. The technology also allows for role-based access to voting data.
Even the world’s biggest stock exchanges have decided to incorporate distributed ledger technology in their transactions, with several outlining plans for overhauls of their core settlement systems. In 2018, the Shanghai Stock Exchange concluded that distributed ledgers had broad applicability in the securities industry, assisting in information disclosure, issuance and transfer, clearing and settlement, shareholder voting and dividend payment. The Australian Stock Exchange and Japan Exchange Group have also been investigating blockchain solutions for clearing, settlement and low-liquidity assets. The Japan Exchange Group has noted that securities transactions have broad potential to expedite the confirmation of information in the post-trade process.
As of 2019, the JPX Group had performed two proof of concept tests in collaboration with Japanese financial institutions. The ASX is developing a distributed ledger replacement to conduct post-transaction clearing and settlement activities, with the intention of facilitating greater accessibility and efficiency in the register. The project currently has a proposed go-live date of April 2022.
By offering an alternative to traditional database registers, blockchain technology has made company information readily accessible and more cost-effective. Complex information can be efficiently sourced from the register, stored indefinitely and timestamped. A blockchain system would be based on shareholder identity, allowing both open and pseudonymous ownership.
Voting information and tokens can be transmitted directly to investors without the need to ask each intermediary for the identity of their client. This information is effectively automatic.
As each change to the blockchain record is catalogued and verifiable, the expected benefits of blockchain for the voting process itself are also significant, promising greater accuracy and transparency. This acts as an incentive for more shareholders to directly participate at the annual general meeting, enhancing shareholder democracy and mitigating the effects of delegated voting. Both companies and shareholders would gain better understandings of shareholding. Using blockchain technology would also limit the use of ‘empty voting’ – providing transparent share registration and notice of changes to voting rights. This ensures that voting rights are aligned with economic interests. The consequence of these benefits is to vastly improve shareholder participation in corporate governance. These reforms will allow investors to have a direct say in meetings with greater ease and confidence.
Within a span of five years, the impact of technology on companies has been exponential. Though distributed ledgers are still being developed in company settings, the promise of emerging technology is persistent. Successive pilot programs tell us that the concepts work, and that the possibilities to enhance accessibility and efficiency for shareholders are substantial and significant. The modern company is changing – and technology will play a key role in driving its evolution. Marginalised shareholders now have an opportunity to benefit from technological improvements to transparency and participation.
Lecturer, Weiping He
Weiping He is a lecturer at Monash Law Faculty. Her research interests primarily lie in the areas of financial services regulation (securities markets and banking) and corporate law. She is interested in how regulatory regimes differ in terms of nature and dynamics as a result of varied historical, political and economic circumstances and in particular how regulatory regimes could work better. Her research also incidentally attempts to evaluate the proper role of government vis a vis the market, for example in assessing the efficiency of various regulatory regimes and the competence and effectiveness of regulators.
Assoc Professor and Director of the Monash Blockchain Technology Centre, Joseph Liu
Joseph Liu is an Associate Professor in the Faculty of Information Technology, Monash University. He got his PhD from the Chinese University of Hong Kong in 2004. Before joining Monash in 2015, he worked as a research scientist at the Institute for Infocomm Research (I2R) in Singapore for more than seven years. His research areas include cybersecurity, blockchain, IoT security, applied cryptography and privacy-enhanced technology. He has received more than 6500 citations with more than 200 publications in top venues such as CRYPTO, ACM CCS. Joseph is currently the lead of the Monash Cybersecurity Group. He established the Monash Blockchain Technology Centre in 2019 and serves as the Centre Director. His remarkable research in linkable ring signature forms the theory basis of Monero (XMR), one of the largest cryptocurrencies in the world with current market capitalization more than US$1 billion. Joseph received the 2018 Dean’s Award for Excellence in Research Impact. He was also named the 2018 ICT Researcher of the Year by the Australian Computer Society (ACS), the largest national professional body representing the ICT sector, for his contribution to the blockchain and cybersecurity community.
The National Stock Exchange of Australia (NSX) is a stock exchange company that has finished working on a distributed ledger technology (DLT) trading system. This Tuesday, they’ve announced that the hard work is done and it is only a matter of time before they are permitted to connect to the Australian Securities Exchange (ASX).
Approved By The Council Of Financial Regulators
The new DLT platform built by NSX is called Digital Exchange Subregister System (DESS) – and is a part of the ClearPay platform. Earlier this month, the Australian Council of Financial Regulators approved the trading system for financial use, clearing the first important obstacle.
The company is currently hashing out the final details with the Australian Securities and Investments Commission. Once the application process is complete and the launch date is settled, DESS will be ready to serve Australian investors partial to blockchain technology.
A joint venture between the NSX and iSignthis – a company whose mission is to provide financial services and solutions around the globe – DESS was created in order to replace the CHESS system the ASX is currently using.
Ever since 2017, the ASX has also been working on its own version of a DLT trading platform – but in spite of pressures from the RBA to finish the platform, it seems the NSX has gotten there first.
According to Dominic Stevens – the CEO of ASX – the delays were due to the expansion in the scope of the ASX DLT project. Due to the trading volume explosion seen in March, the ASX realized that a more powerful platform than originally thought was required.
“Some, including an important back-office systems provider for a substantial part of the market, expressed a preference for an extra six to nine months, which we are including in our deliberations. With the volume explosion we saw in March, we’re now looking at plans to ultimately double or triple that original volume target, which will increase go-live system capacity.”
It remains to be seen which DLT system will replace CHESS – and which system will please investors more.
While admitting that cash is still important to a large segment of the population, the Reserve Bank of New Zealand – Te Pūtea Matua – is looking into creating a digital currency of its own.
The Concept Of Money Is Changing
Whereas the Reserve Bank Of Australia seems to be indecisive when it comes to the need for a digital cryptocurrency – and how it may take shape – its New Zealand counterpart acknowledges that the very existence of money as we know it should no longer be taken for granted.
According to Governor Hawkesby, central banks will soon be facing big questions about the future of money – and should remain open to changes. He also stated that they will remain open-minded and see which way the wind blows.
In Australia, although the RBA has found “no strong public-policy case” – although the use of cash has been swiftly declining due to the ongoing COVID-19 pandemic.
However, research into CBDCs is still ongoing – a move other governments are also going with. Most notable among CBDC-sympathetic countries is China so far, where the DCEP (Digital Yuan) is already being tested by Shenzhen residents. The US Federal Reserve has also partnered up with the European Central Bank to research the pros and cons of digital currencies.
According to RBA Head Of Payments Tony Richards, any decision regarding the subject will be made with the goal of promoting efficiency in the payment system of Australia.
“Consistent with the Bank’s mandate to promote competition and efficiency in the payments system and contribute to the stability of the financial system, we will be continuing to consider the case for a CBDC, including how it might be designed, the potential benefits and policy implications, and the conditions in which significant demand for a CBDC might emerge.”
Whether the RBA pushes forward or not remains to be seen. However, the Australian government’s sympathy towards blockchain technology so far just might tip the balance in the favour of CBDCs.
On the 15th of October, Australia’s Flinders University and SIMBA Chain signed a memorandum of understanding (MOU) regarding future research.
Over a period of three years, the two institutions will collaborate on projects using distributed ledger technology for cybersecurity purposes.
United States DoD Contractor Keen On Helping Key Security Partners
Ever since 2017, SIMBA has secured multiple contracts with the US Department of Defense. The company has provided blockchain-based secure communications and supply chain solutions for the United States – and is now looking to assist key US Allies, such as Australia and NATO member states with the same technological solutions.
SIMBA Chain’s smart-contract-as-a-service (SCaaS) platform empowers users to easily develop and deploy sophisticated distributed applications (dApps) that are secure, unchangeable and that can easily be validated by auditors.
Ever since the advent of hybrid warfare – the main form of war waged within the past 30 years – government computers and even civilian populations have been targeted by cyberattacks by bad actors, whether state-funded or not.
Now, SIMBA and Flinders University – home to the Jeff Bleich Centre for the U.S. Alliance in Digital Technology, Security, and Governance – will see how they can use blockchain to prepare Australia’s military and industrial sectors – and those of its allies – against attacks by malevolent entities.
Zac Rogers (Ph.D.) – the research leader for the Jeff Bleich Centre – welcomes the opportunity to work with SIMBA.
In return, David Wasson – SIMBA Chain’s lead executive – recognized the partnership as a chance to work with some of the leading researchers in the area.
“Cybersecurity threats to governments and businesses around the world have never been greater and are becoming more sophisticated. We are excited about the new defense/academic collaborative agreement with Flinders University because it combines SIMBA Chain’s powerful blockchain security technology with Flinders’ world-class social scientists and digital anthropologists, which will produce actionable security solutions for Australia, the United States, and other global allies.”
Together with the recent quantum-proof blockchain proudly made by Monash and CSIRO, Australia is well on its way to a cyber-attack proof future.
The only Australian researcher to be honoured with a 2020 IBM Academic Award, Monash University’s Dr Jiangshan Yu has received international recognition for his groundbreaking work on cryptocurrency and blockchain technology.
Of the 27 awardees for the 2020 IBM Academic Awards announced last night,Dr Yu, Associate Director (Research) in the Monash Blockchain Technology Centre, was one of two recipients to receive an award for research in this important field.
I’m absolutely ecstatic about being nominated for an IBM Academic Award! This achievement is not only great recognition for my research but it’s also an opportunity to foster future collaborations with IBM to further the use of technology for social good.
Dr Yu speaks to Crypto News about his award
The IBM Academic Awards promote collaborative research projects that advance the emerging technologies of today and encourage a sharing of knowledge amongst the global technology community.
A researcher in the Faculty of Information Technology at Monash University, Dr Yu is known for his research into blockchain systems. His most recent work demonstrates how businesses can realise their potential by adopting blockchains that can communicate with one another.
“Currently, there are over 5,000 blockchain systems and each represents an ecosystem. Personally, I believe that there will be many blockchain systems built for specialised applications. Our research explores how these blockchains can communicate with each other, enabling distributed users to exchange their data and assets between different blockchains without the need for a central go-between,” says Dr Yu.
Over the last decade, the rapid growth of blockchain technologies and their applications has seen governments around the world develop strategies to boost the blockchain industry.
More recently, the Australian Government also announced a National Blockchain Roadmap to help position the country’s blockchain industry to become a global leader, where interoperable blockchain is a key focus.
“Ultimately, the goal is to manage cryptocurrency and blockchain-based asset exchange with the same level of scalability, performance and equity that businesses and traders now enjoy in the financial world,” explains Dr Yu.
“If we can provide a mechanism generic enough to allow the communications between blockchains, we can bridge the gap between what would otherwise be isolated blockchains and enable a more connected network of ecosystems. I believe this will be the next advancement in technology that will shake the world.”
Congratulations to all those who have been selected for a 2020 IBM Academic Award.
Despite stating last month that there is no need for a central bank digital currency, the Reserve Bank of Australia is still looking into the possibility of creating one.
Speaking at the University of Western Australia Blockchain, Cryptocurrency and Fintech Conference, Tony Richards — the Head of Payments Policy at the RBA — revealed that the RBA is not only looking into the possibility of a retail CBDC.
In fact, the RBA is also conducting research on the technological and policy implications of a wholesale CBDC which would be used only by a small group of financial entities.
“We will be continuing to consider the case for a CBDC, including how it might be designed, the potential benefits and policy implications, and the conditions in which significant demand for a CBDC might emerge.”
Research Into Centralized Digital Ledgers
The vast majority of blockchains are public, decentralized, and transparent — however, this may not be the case for the central bank digital currency the RBA is taking into consideration.
If the RBA were to create its own digital currency, it would probably run on a permissioned, centralized model — a wise precaution, since a small development error would affect millions of citizens with possibly unforeseen consequences.
Tony Richards also revealed that if an official CBDC were to be made, it may run on an account-based system — and might be available offline too — possibly by implementing a cold wallet system.
Central banks worldwide are also looking into CBDCs and whether it would make sense to issue a tokenized version of their national currencies. China has probably gone the farthest with its possible national blockchain and is currently in the testing phase for a digital yuan. This test will be carried out by giving 10 million CNY (over AUD 2 million) in digital currency to Shenzhen residents.
Other nations, like the U.S.A., are still trying to decide whether a CBDC is even necessary.
For the moment, however, the RBA is not committed to launching a blockchain-based digital currency — and there is no guarantee that they will ever do so.
