Huobi Weekly Blockchain News-Review (Vol. 96) (6th Jan— 12th Jan 20)

3.1 Industrial Application

Ant Financial, the financial affiliate of Chinese e-commerce giant Alibaba, is reportedly launching its enterprise-focused “Ant Blockchain Open Alliance” platform this month.Local news agency Bihai123 reported on Jan. 8 that Ant Financial Group vice president Jiang Guofei, who is also president of Ant’s smart technology business group, revealed that the network has been live in beta as of Nov. 2019, and will imminently be launched as a fully operational chain. The vice president alleges that the Ant Blockchain will be the first open alliance chain to share platform use rights, enabling small-scale and micro-enterprises and developers to enter the blockchain industry at a lower cost to develop and launch their own applications.

On Jan. 3 Spain-based CaixaBank added the blockchain-powered finance platform We.trade to its list of services. CaixaBank has now become one of the first banks in Europe to provide its customers access to blockchain technology.Launched in 2017, We.trade is a finance platform powered by IBM’s blockchain technology. It was developed by a consortium of 15 financial institutions from around Europe, like UBS and Societe Generale, and it works to provide businesses with a digital, trustless platform for verifying financial information. We.trade’s open API architecture lets it track and trace goods shipped by any of the 400 logistics companies throughout Europe who are also using the platform.We.trade uses blockchain to facilitate the transaction process for suppliers and buyers on a single, shared platform. We.trade generates smart contracts that link the trading operation with the financing or payment that prevents any default risk for companies, which can increase business globalization.

In the United States, Virginia’s state legislature looks to study blockchain to improve elections and voting.Prefiled on Dec. 27 and scheduled for offering on Jan. 8, a new bill requesting further study into blockchain-based elections has emerged in Virginia’s General Assembly. The bill, House Joint Resolution 23, asks the Department of Elections to determine whether blockchain technology should be considered to secure voter records and election results. The bill’s patron is state delegate and cybersecurity specialist Hala Ayala (D-51). It is currently waiting for committee assignment, and will have a long road ahead of it on its way to potentially becoming law. However, it could change the way a state of over eight million people votes.Per the bill’s current tenets, the department will also have to determine whether the costs and benefits of using blockchain technology outweigh those of traditional registration and election security measures. The department is also expected to make recommendations on how to implement the technology.

3.2 International Policies

The Qatar Financial Centre Regulatory Authority (QFCRA) announced that virtual asset services may not be conducted in or from the Qatar Financial Centre (QFC).The regulator announced the new measures in a tweet published on Dec. 26, stating that authorized firms are not permitted to provide or facilitate the provision or exchange of crypto assets and related services until further notice. The QFCRA warns:“The Regulatory Authority shall impose penalties in accordance with its rights and obligations in case of any violation of undertaking activities that are not permitted in the QFC.” The QFCRA defines virtual asset services as the exchange between crypto and fiat or crypto and crypto, transfer of crypto assets, safekeeping or administration of virtual assets or tools for their management, and participation in or provision of financial services related to virtual assets. The governor of the Qatari central bank Sheikh Abdullah bin Saud Al Thani commented:“The State of Qatar affirms that fighting money laundering and terrorist financing requires a strict and effective regulatory and legislative framework, whereby the powers and responsibilities of both government agencies and relevant ministries are defined in relation to combating money laundering and terrorist financing.”

The United States Securities Exchange Commission continues to scrutinize crypto as its compliance office adds fintech and digital assets to its annual priorities list.Per a Jan. 7 announcement from the SEC’s Office of Compliance Inspections and Examinations (OCIE), the agency has put new financial technologies including digital assets among major concerns in the coming fiscal year.In the words of the regulator, new technological developments in capital formation and investment advice “warrant ongoing attention and review.” OCIE’s 2020 priorities for crypto differ from those of 2019 in that they seem more broadly interested in the positive potential of financial technologies. The office wrote that “OCIE also will continue to identify and examine SEC-registered firms engaged in the digital asset space” — maybe indicating a less retributive stance towards crypto in 2020.

The South Korean Presidential Committee on the Fourth Industrial Revolution (PCFIR) has recommended the government to allow financial institutions to launch cryptocurrency-based financial products.Local English-language news outlet BusinessKorea reported on Jan. 6 that the committee recommended products such as Bitcoin (BTC) derivatives to be allowed as part of a strategy for the institutionalization of cryptocurrencies. The PCFIR also suggested that the local financial sector should develop and introduce a Korean custody solution to avoid relying only on foreign custodians when handling crypto assets. The committee also noted that Bitcoin should be listed directly on the Korea Exchange — the country’s sole securities operator located in Busan. The committee also advised the government to consider introducing business licenses or guidelines for cryptocurrency exchanges and integrating products related to crypto-assets into the financial system in the mid to long term. The committee reportedly stated:“As of May 2019, daily crypto-asset trade hit more than 80 trillion won (over $68 billion) in the world, so it is no longer possible to stop crypto-asset trade. The Korean government has to gradually allow institutional investors to deal in crypto assets and promote over the counter (OTC) desks dedicated to institutional investors’ trade.”

3.3 Technological Breakthrough

China’s nationwide blockchain network, the Blockchain-based Ser­vice Net­work (BSN), will launch in April 2020, six months after it was rolled out for testing.Backed by Chinese government policy think tank the State In­for­ma­tion Cen­ter (SIC), the project aims to provide a trusted and scalable infrastructure for supporting new blockchain projects as well as the development of smart cities and the digital economy. Tang Sisi, deputy head of the Smart City Development Research Center of the Chi­na’s State In­for­ma­tion Cen­ter (SIC), announced the news at the China Ur­ban Reg­u­la­tion In­no­va­tion Fo­rum in early January, Chinese finance-focused publication Sina Finance reported on Jan. 7. According to the executive, the BSN will be officially launched for commercial operation in April after the network was first released for internal beta testing in October 2019. the BSN network is an interregional public infrastructure network that was jointly developed by the SIC, major China’s state-run telecom China Mobile and the Chinese government-supported payment card network China UnionPay, among others. First piloted in the city of Hangzhou, the capital of east China’s Zhejiang province, the BSN specifically intends to reduce technical and economic costs associated with developing blockchain adoption, SIC’ deputy director Zhang Xueying said.

2 investments activities took place in the blockchain industry this week, Finoa got seed round investment that was led by Venture Stars and coparion, Stellarport got bought by Litemint.