How Blockchain Trade Finance Is Breaking Proof-of-Concept Gridlock

How Blockchain Trade Finance Is Breaking Proof-of-Concept Gridlock

Global trade is not just a question of moving merchandise from one point to another. Goods do need to move, but they do so through a web of intermediaries, each with distinct priorities and systems.

Exporters, importers, banks, truckers, shippers, customs agents and regulators all require checks and verifications at various points along the chain, and each interlocking part depends on successful completion of the previous phase, and of course, on reliable information.

It’s no surprise, then, that the application of distributed ledger technology (DLT) in trade finance and supply chain management has for some time been a focus of financial institutions around the world. Banks play a large role in the chain, not only in the supply of letters of credit and other financing mechanisms, but also in the treasury management of its exporting and importing clients. And trade can be painful – risk has a financial and psychological cost, financing is not always easy to come by and working capital squeezes (when payment is late but costs have been incurred) affect entire operations.

Several of the trade finance DLT platforms currently under development were initiated by banks. We.Trade, for example, is a joint venture owned by nine of Europe’s largest finance providers, while Batavia’s development is led by UBS and IBM, with participation from a handful of banks in Europe and North America.

Unlike other bank trials that aim to test the technology (and which end up shelved due to the lack of a strong business case), these evolved to solve clients’ pain points.

As Beat Bannwart, head of strategic innovation and market development for UBS, explained to CoinDesk:

“The driving factor wasn’t the need to find a blockchain use case, it was the clients’ needs – they want a leaner, faster process in place, how to secure international trade transactions, how to finance them in order to grow their business.”

Hubert Benoot, chairman of We.Trade, agreed, adding: “Clients are unhappy that, in a European context, their growing of trade is limited by the absence of good instruments to finance and cover risk.”

The principal pain points revolve around the bilateral nature of trade relationships – each component in the chain usually interacts one-on-one with another, leading to duplication of processes and a lack of transparency as to the state of a shipment.

Mapping the route

While both platforms are finance-oriented and client-centric, there are significant differences.

First, We.Trade is focused on small and medium-sized businesses (SMEs) trading within Europe. Developed by KBC, Société Générale, Deutsche Bank, HSBC, Natixis, Rabobank, UniCredit, Santander and Nordea, it intends to enable banks to facilitate trade transactions between their clients by offering greater transparency, more automation and lower risk.

Batavia, on the other hand, appears to have broader ambitions. Last week, it announced a pilot of two trade transactions, in which Audis were purchased in Germany by a Spanish business conglomerate, and raw materials were imported from Austria to Spain by a global leader in textile development.

While the trial was focused on Europe, it involved large corporations, and the presence of the Bank of Montreal in the consortium indicates a wider geographical scope.

Second, We.Trade is close to production. The platform’s participants credit its progress to the narrow focus and relative simplicity of its initial design.

Anne-Claire Gorge, global head of product management trade services at Société Générale (a shareholder of We.Trade), told CoinDesk that’s the reason why the group managed to move fast and deliver a minimum viable product.

“We don’t intend for the moment to offer something that would be the single entry point for companies to trade and tackle everything,” she said.

We.Trade plans to begin testing the production version next month, with a commercial release expected over the summer. Banks will be invited to join on a licensing basis, which will enable them to offer the platform to their clients.

While the joint venture plans in the future to incorporate additional services such as onboard inspections and innovative financing products, for now the priority will be broadening the network.

Batavia has not specified a possible date for launch, although Bannwart expects to see “certain solutions come to fruition within the next 12-18 months.” He also stresses the platform’s relative focus. stating:

“While the platform needs to be universal, you will never succeed if you start with the whole world.”

There are hurdles ahead, though.

The main obstacle is the complexity of moving from proof-of-concept to pilot to production. Michael Spitz, CEO of Commerzbank’s main incubator (and a participant in the development of Batavia), observed the kind of considerations the transaction can bring.

“It’s one thing if, in a proof-of-concept, everything works on the test network, but the pilot is much more complex, because you start to combine the test network with legacy systems,” he said. “Once we have executed the pilot transactions, we are no longer in the sandbox, and the regulators will be looking.”

Still, We.Trade’s Benoot hinted that the interest from the regulators has so far been supportive, given the impact that increased trade within Europe could have in the region – SMEs account for around two thirds of total EU employment.

“I’m impressed by the knowledge of those regulators on blockchain, DLT, they know what’s happening in the market. They’re really interested in innovation, especially exports,” he said.

Train of thought

Yet, these platforms present a good example of how blockchain-based technologies are about more than making current processes more efficient – they can open up new revenue streams.

Neither platform is trying to replicate existing trade finance formats. They both appear to be substituting the main options available today – letters of credit (bank guarantees that the purchaser will pay) and open account (where no guarantees are given and the trade is undertaken on trust) – with the new concept of “smart payments,” released when an action is triggered.

“For We.Trade this is both a risk management solution and a working capital solution, in that the ‘bank undertaking of payment’ that the platform issues when a trade is initiated can then be separately financed, such as through discounting or forfeiting,” Benoot said.

This is especially significant given that letters of credit are rarely used in intra-European trade, since each one can take as much as seven days to process (longer than it would take the goods to arrive at their destination).

What’s more, the cost of each is often prohibitively high given the relatively small size of the orders. The increasing weight of “open account” trades (without payment guarantees) means that the exporter has to either insist on pre-payment or trust the importer, and the implied risk for either side is a barrier to growth.

Gorge of Société Générale further detailed: “It’s not necessarily a question of trade processes or bank fee savings, but also a new way of securing transactions where they currently don’t have solutions.”

We.trade was recently set up as a joint venture with the initiating banks as shareholders, overcoming what could have been another hurdle: governance.

As We.Trade’s Benoot explained:

“Next to technical challenges, also collaboration is a challenge. We have created one company in which nine banks are shareholders. Notwithstanding the fact that we are independent, all the banks – in line with their internal governance and procedures – need to approve the services and the documentation. But we have shown that we can work together.”

New horizons

Other platforms are also moving forward, and new ones are emerging.

While perhaps not all of the ongoing proofs-of-concept will see the commercial light of day, it increasingly appears that trade finance will escape the spread of dropped trials and shelved pilots prevalent in other financial applications over the last few years.

Given the relative progress of each and the hurdles yet to be overcome, adoption will be choppy and fragmented for the short term. But as the underlying technology advances, regulatory stances adapt and compelling use cases propel joint development, a bigger picture takes shape.

Looking further ahead, we can catch a glimpse of a map of interconnected networks, interacting with legacy systems.

The cautious and focused approach taken by two of the most advanced projects so far belies the grander vision: a more robust and efficient system will not come through digitising current processes.

It will come through designing new ones, better suited to an increasingly complex global economy.

As UBS’s Bannwart observed:

“Blockchain is a network business – the value of the solution grows with its adoption. What we’ve seen throughout history is that if you have non-interoperable systems, on the one hand it’s good for competition because solutions are developed more quickly; but on the other hand, it could be like the old times when you had to carry a different phone for each region.”

Trade finance image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Bitcoin in Brief Monday: Outage Downs Telegram, Bitcoin Shines on a Bank

Bitcoin in Brief Monday: Outage Downs Telegram, Bitcoin Shines on a Bank

Bitcoin in Brief Monday: Outage Downs Telegram, Bitcoin Shines on a Bank



The Daily

Technical Issues, blockchain plans, and bitcoin pranks – we’ve got a colorful selection of news in today’s Bitcoin in Brief. The popular messaging app Telegram was down for some users in Europe and the Middle East over the weekend, but the problem has been resolved. Also, a bitcoin logo appeared on the facade of the Swiss National Bank building in Zurich. Do you want to know who’s behind the idea?

Also read: This Week in Bitcoin: Amazon Wants to Track You and TD Ameritrade Plants a Flag

Telegram Cut Off by a Power Outage in Amsterdam

Bitcoin in Brief Monday: Outage Downs Telegram, Bitcoin Shines on a BankThe messaging platform Telegram, popular with the crypto community, has experienced some issues over the weekend that hindered communication across Europe, the Middle East, North Africa, Russia and the CIS countries. According to messages posted on social media by its representatives, the interruptions are due to technical reasons. In recent weeks, the company has also faced difficulties following its conflict with Russian regulators. Roskomnadzor has been trying to restrict access to the messenger after its refusal to hand over its decryption keys to security services.

“Massive overheating in one of the Telegram server clusters may cause some connection issues for European users within the next couple of hours,” Telegram’s founder Pavel Durov tweeted on Saturday, apologizing for the inconvenience. “The problem is being solved,” he assured users. In Europe, the glitch was fixed on Sunday. Before that the company posted another tweet with details about the problem. “Repairs are ongoing after a massive power outage in the Amsterdam region that affected many services,” it said. The app was up and running again around noon, Central European Time.

Bitcoin Logo on a Bank’s Facade in Switzerland

Bitcoin in Brief Monday: Outage Downs Telegram, Bitcoin Shines on a BankA photo shared recently on Twitter shows a huge Bitcoin logo shining on the facade of the Swiss National Bank in Zurich. The picture posted by Johannes Gees was accompanied by the following comment: “Is that a #bitcoin on the @snb […] Trustsquare rules.” Trust Square is a new blockchain hub launched this month. Its offices are right across the street from SNB’s headquarters and it is probably behind the idea to project the logo. The R&D center aims to facilitate the exploration of blockchain applications, the implementation of related business models and the development of blockchain ventures, according to the local Fintechnews. It offers space for 200 workstations for startups, researchers and investors working on various applications of blockchain technology.

Switzerland is considered a crypto-friendly jurisdiction. A number of crypto businesses and blockchain companies are headquartered or represented in the Alpine confederation. It has become one of the first countries to establish a crypto valley, located in the Canton of Zug. The Chinese mining giant Bitmain has opened a branch there, and one of Russia’s largest banks, Gazprombank, has announced plans to test cryptocurrency deals in Switzerland. More recently, a high-ranking representative of the Swiss National Bank took a stance that might have surprised many colleagues. Andrea Maechler, member of the central bank’s governing board, said that private digital currencies were better than any state-issued version. She also thinks decentralized cryptos are less risky.

Blockchain Undertakings

Major Korean companies have turned their attention to blockchain technologies in search of new growth engines for their businesses. Their attempts may change the landscape in the blockchain sector that has been mostly dominated by small startups. The serious financial and human capital controlled by these large corporations may accelerate the development of such technologies.

South Korea’s leading mobile carrier, SK Telecom, has recently announced a plan to launch a new asset management platform powered by blockchain technology, the Korean Times reports. The company hopes to increase customer convenience with the service which would allow users to manage their bank accounts, credit cards and mileage points, as well as cryptocurrency, at the same time. The telecom also intends to launch a project designed to support blockchain startups called “Token Exchange Hub”.

Bitcoin in Brief Monday: Outage Downs Telegram, Bitcoin Shines on a Bank

Samsung SDS, the IT branch of Samsung Group, has also targeted the blockchain industry. It has developed a platform that would allow users of mobile devices to gain access to various financial services through encryption of biometric certification information. With Nexledger they will be able to deal with a large number of transactions in real time and utilize a smart contract function that bolsters security and convenience, its developers said.

In Germany, the Federal Financial Supervisory Authority, Bafin, has authorized the first hybrid fund that will deal with both cryptocurrency and real estate. The Munich-based BITREAL Capital GmbH will operate the BITREAL Real Estate Blockchain Opportunities Fund 1. BREBCO 1 will invest in blockchain technologies through established cryptos and tokens, and also in commercial real estate in the leading regions of Germany. Its operations will be partly financed by bank loans in order to minimize crypto-related investment risks while providing high returns.

Do you think blockchain technologies have a future separate from the cryptocurrencies they were invented for? Share your thoughts in the comments section below.


Images courtesy of Shutterstock, Johannes Gees.


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ICBC’s First Blockchain Patent Is Now Public

ICBC’s First Blockchain Patent Is Now Public

The Industrial and Commercial Bank of China (ICBC), one of the country’s four largest state-owned commercial banks, is exploring a way to authenticate digital certificates and store data in a sharable blockchain.

According a patent application filed with China’s State Intellectual Property Office (SIPO), the bank aims to use a blockchain system to improve the efficiency of certificate issuance and save users from repetitively filing the same document to multiple entities.

The technology, based on the patent, touts a system where a certificate issuer will first match a user’s credential with a particular certificate digitally. After it’s approved, the data will be encrypted and moved onto a blockchain which will update the distributed ledger held by different entities that could potential require this certificate.

By further decrypting the data with users’ specific credentials, the system will allow entities to view an authenticated document digitally to streamline its operation flow.

The patent, currently the first blockchain-related one filed by the bank with the SIPO, was first submitted in November 2017 and released on Friday.

It explained that the technological exploration stems from the current pain point where consumers are constantly being required to submit the same certificate – such as for birth, marriage or eduction – by different entities they are dealing with.

“Traditionally users have to obtain a certificate from an authority that issues it, which does that manually. And then they present it to entities that require the certificate. This process is inefficient and poses the counterfeit issue,” the bank wrote in the document.

The patent application marks another effort taken by a Chinese state-owned commercial bank to utilize blockchain technology in data storage and sharing.

Recently, Bank of China has also detailed in a patent application its move to develop a technology that it claims to be better able to enhance blockchain’s data storage and process capacity.

See the full patent application below:

ICBC image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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PR: How Ubex Uses Blockchain to Disrupt the Advertising Market

PR: How Ubex Uses Blockchain to Disrupt the Advertising Market

Ubex Uses Blockchain to Disrupt the Advertising Market

This is a paid press release, which contains forward looking statements, and should be treated as advertising or promotional material. Bitcoin.com does not endorse nor support this product/service. Bitcoin.com is not responsible for or liable for any content, accuracy or quality within the press release.

Cupertino, CA – Ubex is looking to drastically change the digital marketing global industry which earned $229 billion in 2017 and will reach a stunning $335 billion in 2020. They will do so using a innovate new technology called blockchain. In recent years the digital marketing industry turned its eye to blockchain technology that can potentially alleviate or solve many of the issues present in the space today.

The blockchain is currently taking the financial sector by storm. 14% of financial market institutions plan to implement blockchain-based services, and these rates are expected to reach 65% by 2020. Digital marketing will follow the financial sector, and Ubex, who utilizes unique blockchain technology and artificial intelligence to provide innovative solutions for advertisers, publishers, and consumers will be at the forefront of the revolution.

Ubex solves many of the problems in the digital marketing space today. One of these issues is targeting. The Ubex platform utilizes a programmatic approach to user data to improve targeting. Behavioral and socio-demographic data of users is analyzed to conduct a transaction. This allows for improvement of targeting, and will let advertisers buy slots for demographics instead of website locations.

The potential of programmatic algorithms is immense. At the same time, this potential cannot be realized fully without the introduction of blockchain technologies and neural networks. Therefore, the emergence of Ubex will be a catalyst for the growth of the software market and digital-advertising in general

With blockchain technology developed by Ubex, consumer data will be better protected because of the added security incorporated into blockchain technology. Blockchain allows different parties to enter into a transaction without confiding in one another by using a consensus mechanism. As each block is added to the next an irreversible chain is created, showing each action from beginning to end transparently and securely.

Additionally, this technology allows for smart contracts to be executed by the Ubex blockchain technology. For instance, it could prohibit disclosure of geographic information about the user without authorization if it is stipulated by the system. Moreover, customers may sell their personal information to interested companies. This can address the privacy issues brought up in the Facebook trials.

The blockchain can help effectively switch to a model of payment for targeted actions. Blockchain allows the implementation of: (1) tracking of target actions and their saving in a database transparent for all participants, (2) creating a trusted reputation rating (3) creating mechanisms for guaranteeing mutual settlements, (4) tokenization of ad slots for publishers and factoring centers for advertisers, (5) distributed data mining for consumer-related information.

Click fraud is a type of fraud which is widely spread in pay-per-click (PPC) online advertising. The publishers that post the ads are paid based on how many visitors to the sites click on the ads. Fraud occurs when a fake user imitates a real visitor by clicking on an ad just to increase the click through rate. Advertising networks are the ultimate beneficiaries of this type of fraud.

Ubex solves the fraud problem by applying blockchain technology and pay-per-action model to track down different actions starting from a website user registration, leaving contact information and finishing with purchasing products.

Under the cost per action model, advertisers do not pay publishers for any activities other than those required by the smart contract. The publisher is not motivated to participate in fraud schemes.

Ubex tracks all user actions on the publisher’s and advertiser’s site and saves all data on the blockchain. Ubex’s blockchain model is transparent and encrypted. Companies can easily identify if the people viewing their ads are members of their targeted audience.

Blockchain technology marks a new era in digital marketing that will bring efficiency, less risk and more trust among players. Those players who are incorporating Ubex blockchain solutions in their digital marketing supply chain will outperform their competitors by a mile. Through tokenization and AI, Ubex is one of the most exciting new projects in the blockchain ecosystem.

Contact Email Address
[email protected]
Supporting Link
ubex.com

This is a paid press release. Readers should do their own due diligence before taking any actions related to the promoted company or any of its affiliates or services. Bitcoin.com is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in the press release.

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Mastercard Seeks ‘Fast Track’ Way to Sync Blockchain Data

Mastercard Seeks ‘Fast Track’ Way to Sync Blockchain Data

Payments giant Mastercard wants to patent a way to quickly add new nodes to a blockchain network, new filings reveal.

In a patent application published Thursday by the U.S. Patent and Trademark Office, the company outlines a method by which nodes can connect with and verify the contents of a particular blockchain. Per Mastercard, the idea is to boost the speed at which the nodes – which store a copy of that network’s transaction history – can get up to date.

Mastercard first filed the application back in October 2016. And as the application explains, “a blockchain may store thousands, millions, or even billions of transaction records over time in a vast number of different blocks.”

While this is part of its immutable nature, this also means the blockchain could “contain thousands, millions, or billions of blocks, each of which must be verified by the new node prior to the generation and addition of new blocks to the blockchain.”

The payments firm goes on to say:

“The verification of such a large number of blocks may take a significant amount of time, during which new blocks may be added to the blockchain, further delaying the ability for the new node to participate … Thus, there is a need for a technical solution to increase the speed at which a blockchain may be navigated for verification thereof, which can thereby reduce the time required for a new node to begin participating in the blockchain.”

In order to do this, the proposed system would include so-called “fast track flags” included in block headers. Nodes, per Mastercard, would be able to use those flags to scan over the blockchain’s contents more quickly.

Notably, the filing also discusses using a specially configured blockchain, which would act as the software counterpart to the nodes and help enable further efficiencies.

Image Credit: Africa Studio / Shutterstock.com

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Bitcoin Cash Adoption Continues: Crypto Cafebar, Gold Vendor, Concealed-Carry Clothing

Bitcoin Cash Adoption Continues: Crypto Cafebar, Gold Vendor, Concealed-Carry Clothing

Bitcoin Cash Adoption Roundup: Crypto Cafebar, Gold Vendor, Concealed-Carry Clothing



Services

An increasing number of stores have started accepting bitcoin cash (BCH) and a few other cryptocurrencies. This bitcoin cash adoption roundup features five vendors that recently started accepting the digital currency including a brand new cafebar dedicated to 15 cryptocurrencies.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

Coins Crypto Cafebar

Japan is a leader when it comes to the number of merchants accepting cryptocurrencies since its Payment Services Act, which went into effect in April of last year, legalizes cryptocurrency as a means of payment.

Bitcoin Cash Adoption Roundup: Crypto Cafebar, Gold Vendor, Concealed-Carry Clothing

Bitcoin Cash Adoption Roundup: Crypto Cafebar, Gold Vendor, Concealed-Carry ClothingA new cafebar inspired by cryptocurrencies is gearing up to open in Osaka, Japan. Coins cryptocurrency cafe and bar announced earlier this week that its grand opening will be on May 12. There will also be pre-opening events prior to that date.

The address of the establishment is Osaka prefecture Osaka-shi Naniwa-ku Nihonbashi 4-7-26 Wonder 3 Building 3F.

The cafebar has 23 seats, giving it a spacious feel “where many people can talk face to face,” the company described. “We have a large selection of foods and original goods” based on “15 kinds of [crypto]currencies, and all of the staff have names of virtual currencies,” Coins elaborated, adding that:

It is a space where you can use virtual currencies in real life.

In addition to fiat and credit cards, the cafebar currently lists the following payment options on its website: “BTC (bitcoin), BCH (bitcoin cash), ETH (ether), MONA (monacoin), LSK (lisk), XEM (nem), [and] LTC (litecoin).”

Bitcoin Cash Adoption Roundup: Crypto Cafebar, Gold Vendor, Concealed-Carry Clothing

Bitcoin Cash Adoption Roundup: Crypto Cafebar, Gold Vendor, Concealed-Carry Clothing
Coins cryptocurrency cafebar’s uniform.

Safecast

Safecast is an international, volunteer-centered organization devoted to open citizen science for the environment. Co-founder and Director of Global Operations, Sean Bonner, shared with news.Bitcoin.com:

We design hardware and software for specific environmental monitoring…we design the hardware and make the designs open, and then our partner distributors build the kits and sell them. Kithub is our primary global distributor.

Bitcoin Cash Adoption Roundup: Crypto Cafebar, Gold Vendor, Concealed-Carry Clothing

On the organization’s website, there are links to products, such as the Safecast environmental monitoring devices including the Bgeigie nano geiger counter kit and the Safecast air quality monitoring kit, that are hosted on Kithub’s website. Kithub accepts BCH and BTC through Bitpay.

Undertech

Undertech sells concealed-carry clothing such as shirts, shorts, jackets, vests, legging, purses, holsters, safes, belly bands, and other concealment items.

Bitcoin Cash Adoption Roundup: Crypto Cafebar, Gold Vendor, Concealed-Carry Clothing

The company recently integrated Coinbase Commerce as a checkout option on the Undertechundercover website, allowing customers to pay with BCH, BTC, ETH, and LTC.

Goldsilver

Goldsilver is a website that sells precious metals, founded by Mike Maloney, a precious metals advisor and author. The site sells gold bars, gold coins, gold jewelry, silver bars, and silver coins. The company recently started accepting BCH and BTC via Bitpay.

Bitcoin Cash Adoption Roundup: Crypto Cafebar, Gold Vendor, Concealed-Carry Clothing

Furthermore, “Bitcoin and bitcoin cash orders receive a 3% cash discount on all purchases,” the company detailed.

Rebecca Z

Japanese Jewelry site Rebecca Z, which sells “everyday jewelry for working women”, is now accepting BCH and BTC via Bitpay.

Bitcoin Cash Adoption Roundup: Crypto Cafebar, Gold Vendor, Concealed-Carry Clothing

“We decided to introduce bitcoin payments to simplify payment procedures,” the company explained, adding that this method will allow them to cope with the need to exchange different currencies on e-commerce sites.

What do you think of the adoption rate of BCH and other cryptocurrencies? Let us know in the comments section below.


Images courtesy of Shutterstock, Coins cafebar, Safecast, Undertech, Goldsilver, and Rebecca Z.


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Banking Giant ING Is Quietly Becoming a Serious Blockchain Innovator

Banking Giant ING Is Quietly Becoming a Serious Blockchain Innovator

ING is out to prove that startups aren’t the only ones that can advance blockchain cryptography.

Rather than waiting on the sidelines for innovation to arrive, the Netherlands-based bank is diving headlong into a problem that it turns out worries financial institutions as much as average cryptocurrency users. In fact, the bank first made a splash in November of last year by modifying an area of cryptography known as zero-knowledge proofs.

Simply put, the code allows someone to prove that they have knowledge of a secret without revealing the secret itself.

On their own, zero-knowledge proofs were a promising tool for financial institutions that were intrigued by the benefits of shared ledgers but wary of revealing too much data to their competitors. The technique, previously applied in the cryptocurrency world by zcash, offered banks a way to transfer assets on these networks without tipping their hands or compromising client confidentiality.

But ING has came up with a modified version called “zero-knowledge range proofs,” which can prove that a number is within a certain range without revealing exactly what that number is. This was an improvement in part because it uses less computational power and therefore runs faster on a blockchain.

For example, zero-knowledge range proofs (which the bank open-sourced last year) can be used to prove that someone has a salary within the range needed to attain a mortgage without revealing the actual figure, said Mariana Gomez de la Villa, global head of ING’s blockchain program.

“It can be used to protect the denomination of a transaction, but still allowing validation that there’s enough money in the participant account to settle the transaction,” she said.

Now, building on its past work, ING is adding yet another wrinkle to enterprise blockchain privacy, leveraging a type of proof known as “zero-knowledge set membership.”

Revealed exclusively to CoinDesk, ING plans to take the zero-knowledge concept beyond numbers to include other types of data.  

Set membership allows the prover to demonstrate that a secret belongs to a generic set, which can be composed of any kind of information, like names, addresses and locations.

The potential applications of set membership are wide-ranging, Gomez de la Villa said. Not restricted to numbers belonging to an interval, it can be used to validate that any sort of data is correctly formed.

“Set membership is more powerful than range proofs,” Gomez de la Villa told CoinDesk, adding:

“For example, imagine that you could validate that someone lives in a country that belongs to the European Union, without revealing which one.”

Benefits of openness

But you don’t have to just take ING’s word for it. Since being open-sourced, the body of cryptographic work that ING is building on has been subjected to academic to peer review at the highest levels.

MIT math whiz and one of the co-founders of zcash, Madars Virza, revealed a vulnerability in last year’s zero-knowledge range proofs paper. Virza showed that, in theory, it was possible to reduce the range interval and so glean knowledge about a hidden number.

ING said it has since fixed this vulnerability, and Gomez de la Villa pointed out that this is the type of contribution expected from the ecosystem where the very purpose of open-sourcing is allowing users to fix bugs and improve functions.

“By making the source code available, improving our zero-knowledge range proof solution has become a collaborative effort,” she said.  

She also framed the incident as an example of a mutually beneficial relationship between academic cryptographers and enterprises like ING.

“They are working on the theory; we are working on the practice,” Gomez de la Villa said, adding:

“They can keep thinking about their crazy stuff and then we can say, ‘OK, how can we use it in order to make it available to the rest so it can actually work?'”

Jack Gavigan, chief operating officer at Zerocoin Electric Coin Company, the company that develops the zcash network, said this type of open-source collaboration is contributing to a body of knowledge that all can draw upon, thus driving progress in the zero-knolwedge proof space at a rapid click. And those benefits will be returned in full.

“When a disruptive technology like blockchain comes along, it can shake things up, and companies that are best-positioned to embrace and exploit that technology are likely to end up at the top of the pile when things have settled down,” said Gavigan.

He continued:

“I think that’s why you see companies like ING delving into this space, getting hands-on with the technology, and joining the broader community – because when this technology matures and is ready for prime time, they’ll be ready and able to hit the ground running.”

Picking up from JPM

In other ways, the blockchain-savvy move is already paying off.

ING has been invited to the table with the world’s top cryptographers and will participate in an invite-only workshop in Boston seeking to standardize zero knowledge proofs, alongside the likes of MIT’s Shafi Goldwasser.  

In this way, ING is now part of a wide community of experts extending the scope of zero-knowledge proofs.

At the start of this year, University College of London’s Jonathan Bootle and Stanford’s Benedikt Bunz released “Bulletproofs,” which dramatically improves proof performance and allows proving a much wider class of statements than just range proofs. Many startups have jumped on this and it’s being taken into the enterprise space by the likes of Silicon Valley startup Chain.

Among banks, though, the best known implementation of zero-knowledge proofs is in JPMorgan Chase’s Quorum, which was showcased to a rapturous reception on the blockchain circuit last year.

Taking the Quorum model a step further, ING designed its range proofs to be computationally less onerous than previous zero knowledge deployments and so faster to run on distributed ledgers.

“Zk-SNARKs, used in JPM Quorum, are known to be less efficient than the construction of zero knowledge proofs for a specific purpose, as is the case of zero-knowledge range proofs. Indeed, range proofs are at least an order of magnitude faster,” said Gomez de la Villa.

At JPMorgan, the Quorum team was led by Amber Baldet, who has since left to join a yet-to-be named startup. Now the word on the street is that JPMorgan is considering spinning out Quorum so it’s not longer under the direct purview of the Wall Street giant, in a possible bid to gain more of a network effect from other banks.

In that context, Gomez de la Villa assured CoinDesk the work her blockchain team is doing has the full blessing of ING’s top brass.   

“I recently had a meeting with [ING CEO] Ralph Hamers together with the full board, and it was really nice to see that they are interested in hearing what the blockchain team is doing, and how we are doing it,” she said, concluding:

“I think we are way more comfortable and way more supported internally by the organization.”

ING Bank branch image via Shutterstock.

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Venezuela Certifies 16 Cryptocurrency Exchanges

Venezuela Certifies 16 Cryptocurrency Exchanges

Venezuela Certifies 16 Cryptocurrency Exchanges



Finance

The president of Venezuela, Nicolas Maduro, has announced the end of the pre-sale for the Petro, the country’s “cryptocurrency”. He claims it has raised the equivalent of over 3 billion dollars. Maduro has also certified 16 crypto exchanges he hopes will start listing his country’s new currency.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

16 Crypto Exchanges Certified

According to Venezuelan newspaper with government backing Correo del Orinoco, Maduro has “authorized the certification of 16 exchange houses for cryptocurrencies,” which will facilitate Petro transactions in the international market. Maduro was quoted saying during the inauguration of Venezuela Power Expo 2018 in Caracas:

The certification of these 16 exchanges is a demonstration of confidence in the system of the Petro, as a cryptocurrency, and will allow liquidity and solid transactional volume.

The news follows the announcement of Venezuela’s major crackdown on crypto exchanges and remittance businesses dubbed Operation Paper Hands.

Venezuela Certifies 16 Cryptocurrency Exchanges
Maduro talking at Venezuela Power Expo 2018.

The certified 16 exchanges are “Criptoexchainge, Criptocapital, Asesoría Financiaera CA, Italcambio, Amberes Coin, Cave Blockchainge, Valoratta Casa de Bolsa, Coinsecure.ve, Critiaechainge, Criptolago, Criptoventraige CA, Criptoactivo Menets CA, Criptoactivo Bancar CA, Criptomundo Casa de Intercambio CA, Inversiones Financieras 1444 CA, [and] Criptoactivo Criptoes,” the publication detailed. However, there is no confirmation that any of them have agreed to list the Petro at the time of this writing.

Coinsecure’s Comments

Venezuela Certifies 16 Cryptocurrency ExchangesIndia’s Coinsecure is on the list of exchanges certified by Venezuela. CEO Mohit Kalra said that “Venezuela wanted to add Petro as a cryptocurrency on Coinseure, so they can trade Petro against bitcoin and the rupee,” Business Standard reported on Saturday.

Venezuela has reportedly offered India a 30% discount on crude oil purchases if India uses the Petro, the news outlet added and quoted Kalra saying:

The offer that they have given to the Indian government is: you buy Petro and we will give you a 30 percent discount.

Maduro Claims $3.3 Billion Raised So Far

Maduro announced on Thursday the official closing of the Petro presale. He claimed that “To date, the pre-sale of El Petro has obtained 3,338 million dollars,” elaborating:

I have to report on the closing of El Petro’s first pre-sale. We closed with an amount of $3,338 million. An economic miracle. Boot The Petro!

During his speech, Maduro held up a presentation showing that the Petro has raised the equivalent of 2.744 billion euros, 208.337 billion rubles, and 21.118 billion yuan. He also announced that he will deliver inject $1 billion into the economy obtained from the Petro.

Venezuela Certifies 16 Cryptocurrency Exchanges

Furthermore, the president promised that he will continue promoting the new currency. In addition to announcing that fuel will be sold to all national and international airlines for Petro, he declared that he has signed the paperwork “to create an Industrial and Economic Investment Fund in Petro and I have already contributed, for now 8.5 million Petro equivalent of $510 million for credit loans.”

What do you think of Maduro’s strategy for the Petro? Do you think the exchanges will list the Petro? Let us know in the comments section below.


Images courtesy of Shutterstock, Coinsecure, and the Venezuelan government.


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ASX Exchange Targets 2020 for DLT Settlement System

ASX Exchange Targets 2020 for DLT Settlement System

The Australian Securities Exchange (ASX) is moving closer to replacing its CHESS clearing and settlement system with a distributed ledger-based alternative.

Details about the system’s progression toward production launch were included in an 87-page consultation paper published Friday, which included a timeline for when the switch will be made as well as descriptions of the types of functions it will and won’t support.

ASX is targeting a rollout date sometime in the quarter of 2020 or the first quarter of 2021. But before then, ASX – by way of the consultation paper – is seeking early feedback on its plans as they exist today.

“Depending on the extent of consultation feedback received, ASX expects to provide a final functional scope and implementation roadmap in late July 2018,” the firm explained in the opening of the report.

ASX has been exploring the use of distributed ledger technology (DLT) since 2015. It announced in December that it would become the first major stock exchange in the world to use DLT for post-trade settlement, using technology developed in partnership with Digital Asset, a blockchain startup led by former JPMorgan Chase executive Blythe Masters. ASX also owns a stake in Digital Asset.

ASX’s embrace of DLT is a notable one, coming at the end of a years-long research period. Speaking at the Synchronize conference in New York City earlier this month, CLS Group CEO David Puth said ASX’s move is “going to establish standards by itself” by providing an example for enterprise blockchain implementations across the sector.

ASX deputy CEO Peter Hiom, who was on stage with Puth, suggested that the decision to launch a DLT-based system would help demystify the technology for others in the industry:

“You’re not entering the fourth dimension,” he remarked.

You can read the ASX’s full consultation paper below:

Chess Replacement New Scope and Implementation Plan by CoinDesk on Scribd

Image Credit: Adwo / Shutterstock.com

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Japan’s SBI Unveils New Plans to Start an Exchange for Major Cryptocurrencies

Japan’s SBI Unveils New Plans to Start an Exchange for Major Cryptocurrencies

Japan's SBI Unveils New Plans to Start Exchange For Major Cryptocurrencies



Exchanges

Japan’s SBI Holdings has reportedly unveiled new plans for its cryptocurrency exchange. The company has set a target launch date and is preparing to list major cryptocurrencies. The group’s CEO expects the new exchange to “be number one in the blink of an eye.”

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

Revised Launch Date

Japan's SBI Unveils New Plans to Start Exchange For Major CryptocurrenciesSBI Holdings has updated its plans to fully launch a cryptocurrency exchange. The company had planned for SBI Virtual Currencies to launch “in the autumn of 2017 and at the latest the beginning of 2018,” Minkabu publication recalled.

However, the plan was postponed following Coincheck’s hack and the trouble with its capital and business alliance agreement with China’s Huobi Group. These circumstances led the company to refrain from fully launching the exchange even though it had already received a license from the Japanese Financial Services Agency (FSA) in September of last year.

Japan's SBI Unveils New Plans to Start Exchange For Major Cryptocurrencies
Yoshitaka Kitao.

President and CEO Yoshitaka Kitao said at a press conference this week that the company is planning to officially start the crypto exchange business in the summer, the news outlet conveyed, adding that the exchange “is not a white label of other exchanges but a self-developed” one. SBI Virtual Currencies has, however, been offering a limited service to a few customers since January 30, according to Business Insider Japan.

As for which cryptocurrencies will be supported when the full launch comes, Kitao said that “it is assumed to be major virtual currencies, [including] bitcoin (BTC), bitcoin cash (BCH), ethereum (ETH), [and] ripple (XRP),” the news outlet detailed.

Expecting to Rise to the Top

The company has been carefully considering the timing of its exchange’s full launch based on the hack of Coincheck and the subsequent change in the business environment. The publication quoted Kitao exclaiming:

When we do it, it will be number one in the blink of an eye so quickly, so even if a tremendous number of customers come, we can build a system that can bear [the workload].

One factor that will differentiate SBI’s exchange from others is that “We set the spread to the industry minimum,” he described. The CEO is confident that this will propel his exchange to be the industry leader. “Given that the SBIFX trading spread of the group’s FX company is at the industry’s narrowest level, this is to be expected,” Minkabu commented.

Japan's SBI Unveils New Plans to Start Exchange For Major Cryptocurrencies

SBI already owns one of the largest security brokerages in Japan. “There are a total of 8.5 million accounts of financial affiliates such as SBI Securities Co. Ltd.,” the publication pointed out.

Kitao also emphasized the importance of building trust in the crypto community. To that effect, he recently assumed office as a director of the new self-regulating organization, the Japan Virtual Currency Exchange Association, which was recently established by 16 fully-licensed exchanges.

Do you think SBI’s crypto exchange will quickly become the number one exchange in Japan? Let us know in the comments section below.


Images courtesy of Shutterstock and SBI Holdings.


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