GibFin Forum 2018: Blockchain contribution to Rock’s GDP expected to reach double figures

cebelitarik-bogazinin-ozellikleri-nelerdir

The Gibraltar International Fintech Forum 2018 got underway this morning at the Sunborn Hotel attracting 180 delegates and speakers from around the globe.

Chief Minister Fabian Picardo kicked off the event with a simple and clear message to all those in attendance:

”Gibraltar is open for business.”

Gibraltar Ahead in the Regulatory Space

With jurisdictions around the world trying to figure out how to regulate the blockchain industry, Gibraltar has already put in place a DLT regulatory framework based on best principles and is currently looking to release new accompanying regulations that focus on token sales within the jurisdiction. A bill is expected through the Gibraltar parliament in Q2 this year showing Gibraltar to be world-leading in this space.

The Minister for Commerce, the Hon. Albert Isola, whose Ministry has been driving the fintech and blockchain agenda in Gibraltar also addressed the full conference hall onboard. When talking about the jurisdiction’s continued development, the Minister made it clear that as a government, “we are not scared of innovation.”

He added that the government is looking to continue to operate with consumer protection at the heart of what they do.

With a wide variety of speakers in attendance, the focus was well and truly on regulations for blockchain and ICO, a sector that is booming and hit an astounding $3.7bn during the course of 2017.

Gibraltar Financial Services Commission on ICO Regulations

Sian Jones and William Garcia from the Gibraltar Financial Services Commission (GFSC) also gave a talk and answered questions from the crowd. The same event last year saw the GFSC present their DLT regulatory framework to attendees and the wider world, this year it was their proposed ICO regulations.

Sian Jones emphasised that the regulator would not be regulating individual ICOs but those that brought the token sales to market, adding that “it’s not the role of the regulator to approve any individual token offerings,” rather highlighting how regulations are implemented is as important as the rules themselves.

Sian added: “We as a regulator will not be setting a single code of practice that should be set by the market.”

A lot like the Gibraltar Blockchain Exchange (GBX) with its network of Sponsor Firms, the GFSC sees this emerging market needing the creation of “authority sponsors that are accountable to us [GFSC].” This format would encompass GBX, which already comes under the scope of the DLT regulations, effectively making it an ‘Authorised Sponsor’ which could open up many pathways of opportunity for the exchange.

During the presentations Q&A, the GFSC spoke of their core desire to embed consumer protection at the heart of their work, whilst being supportive of helping grow and develop this innovative industry: “Tokens as a new asset class are isolated from financial advice, but it is right that it should be regulated for consumer protection.”

The DLT Licence Experience

In the morning of the first day, GBX CEO Nick Cowan moderated the panel “The DLT Licence Experience to Date.” Joining Nick was Joey Garcia from Isolas, Anthony Provasoli from Hassan’s and Jay Gomez from Triay & Triay.

Nick prophesied 2018 to be “the year of the regulator,” pointing out that Gibraltar has the unique first mover advantage of having a regulator that truly understands this space, and is so accessible and open to dialogue. Nick began the panel by categorising the ‘DLT licence experience’ into three distinct areas, Government & Regulators, DLT advisors such as Gibraltar’s law firms and the users of DLT licences such as GBX, each with their own distinct experience.

Joey Garcia, who was a part of the working committee regarding the original DLT framework explained the reasons for a best principles approach by stating: “Let’s build a ground-up framework that is evolutional.” Nick complimented Joey’s sentiments by highlighting the collaborative nature of the DLT framework: “There is a trinity of bodies here, government, industry and users, coming together to find a solution”

The panel concluded that although Gibraltar has been successful in locating and nurturing emerging markets, such as e-gaming, it has seen an explosive reaction to its leading role with the DLT regulation.

Anthony Provasoli pointed out “3 years ago nobody knew where Gibraltar was, but that is very different today, especially in the last 12 months.” He also highlighted his experience on the perception of Gibraltar saying: “Clients love the fact they can come and sit down with the regulators and have an open discussion.” The panel’s experience echoed the Chief Ministers opening comment that Gibraltar is open for business.

The panel also touched on the subject of Brexit in relation to Gibraltar, which despite the outcome is making strides in placing itself strategically between Britain and the rest of Europe. Joey Garcia believes that due to the global connection of blockchain and the cryptocurrency market that Brexit would not have a negative impact, by saying: “High level, I don’t think it [Brexit] will affect this space.” It is a testament to that strategic approach of Gibraltar to pioneer itself in this emerging technology and become a forerunner ahead of the Brexit transition.

Challenges in the Current Crypto Exchange Landscape

Nick later participated in a panel entitled “The Crypto Exchange Landscape for 2018” moderated by Joey Garcia with Vitaliy Kedyk of CEX, David Honeyman from Lendo, and David Gyori of Banking Reports alongside Nick. The panel discussed the challenges of AML/KYC with current cryptocurrency exchanges, with Nick detailing how the GBX intends to create a new industry standard of governance and due diligence for token sales within a rules-based system that would gain access to a large pool of KYC cleared participants.

The question of centralised vs decentralised exchanges was debated, with a consensus forming that if blockchain technology is still in its early developments, then decentralised exchanges are far off in that timescale development. With the current challenges that existing exchanges face around AML/KYC, accountability and consumer protection, decentralised exchanges would not contain a solution. Vitaliy emphasised this by saying: “Decentralised exchanges can’t deliver the real user experience” which the panel agreed that if this space is to be adopted by mainstream consumers, the user experience would be of paramount importance.

Nick was invited to close the 1st-day proceedings of the conference. He championed Gibraltar for its bold stance on the global stage as a home for those businesses that are utilising DLT technology. Mirroring the success story of GBX and its successful completion of raising $27M in the RKT token sale, with the way Gibraltar fostered the exponential growth of the e-gaming industry a parallel to what we are witnessing in the blockchain space. Nick finished by telling the packed out audience that Gibraltar is open for business and made a call out to those looking to Gibraltar as a home for the business to “give us a chance”.

Blockchain Innovation in Gibraltar and Beyond

A key moment during the 2nd day of the conference came from Philip Young, the Marketing Director of GBX. Phil gave a presentation on the Blockchain Innovation Centre (BIC) an initiative set up by the Gibraltar Stock Exchange (GSX) to help create a hub of blockchain innovation in both Gibraltar and further afield. Phil gave the three bedrock tenants that would “Educate, Inspire, Connect.” Phil spoke of the BIC’s offer of a network of experts that would help select, fund, advise and guide blockchain-based startups in Gibraltar. Additionally, Phil proposed the idea of the BIC helping to establish educational programs seeking out universities both abroad and in Gibraltar to encourage collaborations.

Despite the heavy wind and rain hammering the Rock of Gibraltar, attendance was still high over the two-day event, with great networking opportunities between the panels and presentations. It was encouraging to see that more than 180 of the 300 attendees had travelled to Gibraltar for the event demonstrating that Gibraltar is quickly establishing itself as a global hub for all things crypto & blockchain.

The Gibraltar International Fintech Forum 2018 at the Sunborn Hotel attracts180 delegates and speakers from around the globe.

 

The importance of decentralization

ea87086c485460123cd2978fd7e46dbe

If you cast your mind back to the early days of the Internet, many of the services were built on open protocols owned by the Internet community. Big platforms like Yahoo, Google and Amazon started during this era, and it meant that centralised platforms, like AOL, gradually lost their influence.

During the Internet’s second growth phase, which largely started in the mid-2000s, the big tech companies like Google, Apple, Facebook and Amazon built software and services that left open protocols trailing behind. The skyrocketing adoption of smartphones helped propel this as mobile apps started to dominate the way we used the Internet. And, even when people did access the open protocol that is the worldwide web, they usually did it through the medium of Google and Facebook etc.

On the one hand, people worldwide benefited from free access to cutting edge technology, but on the downside, startups couldn’t grow their Internet presence without worrying that one of the centralised platforms, like Google, would simply change the game plan and take away any chance of growing an audience and making a profit. This has stifled innovation and in many ways made the Internet less interesting. And, there is a global political aspect to the dominance of centralisation, which we have seen most clearly in the emergence of ‘fake news’ that has turned some social hubs into battlegrounds.

The third age of the Internet

And so we arrive at the third age of the Internet. And as Chris Dixon says in his incisive article on Medium, crypto-economic networks, which in turn owe their existence to the networks developed by Bitcoin and Ethereum, will enable its further evolution. Dixon says: “Cryptonetworks combine the best features of the first two Internet eras: community-governed, decentralized networks with capabilities that will eventually exceed those of the most advanced centralized services.”

The case for decentralisation

First let’s look at the problem with centralised platforms. They have a predictable modus operandi, such as a big drive to recruit users, adding third-party developers and media organisations, and as they grow, so does their power over users. Dixon quite rightly says that when they hit the top of the S curve, “their relationships with network participants change from positive-sum to zero-sum.” And for the third-party platforms, the game has changed from cooperation to competition. So, all the entrepreneurs n the third-party community start to shun the centralised platform.

Now enter the decentralised cryptonetworks. Dixon defines them as:  “networks built on top of the internet that 1) use consensus mechanisms such as blockchains to maintain and update state, 2) use cryptocurrencies (coins/tokens) to incentivize consensus participants (miners/validators) and other network participants.”

Cryptonetworks are also able to maintain a level of neutrality that the centralised platforms can’t offer, and don’t want to either. Plus participants and users are given a voice through the community governance of these decentralised networks. This is available, “both “on chain” (via the protocol) and “off chain” (via the social structures around the protocol). Participants can exit either by leaving the network and selling their coins, or in the extreme case by forking the protocol.”

To sum it up: cryptonetworks align network participants to work together toward a common goal — the growth of the network and the appreciation of the token. That’s why they just can’t keep Bitcoin and Ethereum down, no matter how much they try, because there is a community that believes in it.

 

 

 

 

 

 

FinTech is Growing Up

Wharton, one of the world’s most respected business schools, has recently published an article following a recent conference at the Federal Reserve Bank of Philadelphia on the topic of “Fintech: The Impact on Consumers, Banking, and Regulatory Policy” and it presents some very interesting views on where Fintech is at right now. It’s no longer seen as a fledgling disruptor that is working against the interests of the banking community; now bankers are seeing it as a potential partner when it comes to fintech startups.

Robert Nicholls, president of the American Banking Association said: “We are actively seeking startups to partner with,” and they are busy inviting fintech firms to present to the annual ABA convention. Collaboration is the word on these bankers’ lips and they have even developed a ‘fintech playbook’ for smaller banks. The way they see it is this: banks have trusted relationships, but fintech can enhance the customer experience.

757575

Banks embrace Fintech startups

As a result of this willingness to embrace fintech, banks of all sizes are looking at ways to create innovations with these new partners. For example, Capital One has integrated its services with Amazon’s Alexa. Consumers can ask Alexa for their account balance, request that it track their spending or even make a payment. Bank of America is set to debut its chatbot Erica on the bank’s mobile app to help customers with personal finance decisions.

And, most importantly, numerous U.S. banks are using a fintech platform that allows customers to transfer money in minutes, rather than days. Zelle and Ripple are key players in this sector for the moment.

Another development to come out of a bank in North Carolina is cloud-based technology that streamlines the commercial lending process. And, Eastern Bank in Boston, has adopted Numerated, a startup that enables clients to apply for a small business loan in minutes and get funding within two days. The bank hired fintech entrepreneurs to work with traditional bankers and build an innovation lab that led to the launch of Numerated.

Governments look for cryptocurrency solutions

However, the banks are still quite nervous when you start talking about cryptocurrencies. It is a sector that is risk averse and the volatility in the digital coin market still makes them uneasy. Having said that, bankers at the conference believed that cryptocurrencies will become strong in economies where “people do not have confidence in their own currency or they are avoiding controls on their money,” as William Nelson at The Clearing House told the meeting. He thinks that developed economies with strong currencies will have less use for it, yet Singapore and England are looking at developing their own digital currencies, which means that world economic leaders have not written off Bitcoin and its peers; instead they are looking for solutions and want to be ready.

The blockchain must be trusted

But while there may be some doubts about cryptocurrencies, the blockchain is much more readily accepted. Gurwinder Ahluwalia  of Digital Twin Labs told Wharton attendees that he believed the flexibility and agility of the blockchain gave it more appeal than crypto coins. He said: “You could have warranty programs. You could have provenance of parts to the aircraft industry, provenance of luxury assets. You could have the tracking of transoceanic shipments. You could have the tracking of food for its various associated benefits.” He added that the last hurdle blockchain has to overcome in order to become widely accepted by the traditional financial world is “establishing trust in a decentralized platform and establishing governance.”

This is on the way as banks, governments and other businesses test blockchain technology. Ahluwahlia believes that blockchain will prove itself, because “It provides the trust. It provides the peer-to-peer. It provides the crytography. It provides the database.” It certainly looks like Fintech will show the ‘adults’ that it is grown-up enough to play a role in the world of global finance.

 

 

Economic Predictions And Trends For 2017

Trend watching, especially when it comes to what is happening in the economy is always interesting, sometimes very exciting and occasionally a bit of a let down. In 2017 we’ve been highly focused on political news, and the new trend of what is fake and what is not, and the economies have been in something of a state of flux as a result, but here are some directions that we’ve been going in that may continue into next year.

top

American expansion

The soothsayers predicted that the sustainable expansion seen during the Obama era would suddenly see expansion with the election of Trump. Was that because he is a businessman rather than politician? Perhaps, but Donald’s big boom hasn’t yet happened, although there is some growth.

The Brexit Effect

Many foresaw that the UK leaving the EU would bring uncertainty to the UK economy, and guess what, it has done just that. Every time a statement is made from Downing St. about the state of the exit negotiations, the markets either have a moment of hope, or take a nosedive. Expect to see more of this.

The EU

Euro-sceptics said that the Netherlands, France and Germany would surprise everyone with a vote against membership of the EU. So far, elections in France and the Netherlands have shown strong support for the EU and it is now hard to imagine that Germany will show any inclination to leave.

Chinese stability

China’s economy is looking increasingly stable and its deflation pressures are easing. Lowered interest rates will ease the country’s high debt levels and this helps the global community as well.

Watch Trump

It has been quite a year of watching Trump and what he tweets, and then watching how stock markets and other governments respond. He was very bullish about China and imposing high tariffs on their goods during his election campaign, but so far any anti-trade action has been subdued, perhaps due to the fact he is now more preoccupied with North Korea. But Trump and China is still one to watch.

Interest rates

As predicted in 2017, the USA has hiked interest rates twice this year so far. This is a show of confidence in the U.S. economy thanks to a rise in employment levels. Will this continue? We have yet to see. The UK by contrast has been extremely cautious with its interest rates and a speech by Mark Carney, Governor of the Bank of England on 19th September 2017, suggested that any rises would be “limited and gradual.” This gave sterling a very slight advantage over the dollar during trading following the announcement, and the pound has been bouncing up and down all day and the FTSE 100 went into the red. What will happen with sterling and the dollar by December is the question everyone would like an answer to.

Higher stock prices

In 2017, stock prices have looked extremely solid and have followed an upward trajectory as predicted in 2016. We can expect to see this continue into 2018.