1. The Economist as un-Hype Man
The Economist is back on the blockchain beat with a pair of short articles. The first is a pseudo-cold shower for the enthusiasm within financial services to "put a blockchain on it," lead by a quote from the Blockchain Beard himself. The article ends on a more hopeful note:
Yet it would be wrong to conclude that the blockchain is no more than a fad. It is merely moving through the same hype cycle as other next-big-things have done before it: inflated expectations are followed by disillusionment before a technology eventually finds its place. Although it will take a while for distributed ledgers to rule the world, they are an idea, to paraphrase Victor Hugo, that will be hard to resist.
The second outlines the nascent love affair between central bankers and distributed ledgers: our oft-cited Regtech theme which we will discuss further down the page. The article does end with a nice crypto-libertarian head exploder: "The technology first developed to free money from the grip of central bankers may soon be used to tighten their control."
2. Good News
A warm welcome to SBI Holdings as our newest R3 member institution. It is great to have their team on board, as SBI has been quite active in the ledger space, including their recent JV with Ripple to create SBI Ripple Asia. Another member bank, Unicredit, recently released a white paper discussing the potential applications of blockchain tech to financial services. The authors Matteo and Vittorio have a wealth of hands-on experience to draw from and the paper is well worth a read in full. And a congrats as well to the TradeBlock team for their recent announcement of a successful PoC with ICAP as well as their new sister company Axoni.
3. Regtech and Identity
The US Dept of Homeland Security (DHS) recently announced requests for proposals in two blockchain related areas. One area is not too surprising: “Blockchain Applications for Homeland Security Analytics." But the other one (“Applicability of Blockchain Technology to Privacy Respecting Identity Management”) truly piques my interest, both for their desire to learn more about identity management and in their concern to respect privacy!
Continuing the identity theme, Barclays announced that they are "one [of] a group of nine companies certified by Gov.UK.Verify to supply and manage public IDs for services." The Gov.Verify program has had some ups and downs, but the effort to create a digital identity service, if only for government services, should be commended. Speaking of the UK government, we have yet another article touting their aggressive push towards central bank digital currency as part of the government's fintech hub strategy: "The speed with which the digital-currency agenda has captured the imagination of U.K. officials hints at its potential strategic value for both central banking and the economy."
...and finally, an article that I missed from last week by the always excellent Ben Thompson at Stratechery. The post is nominally about the block size debate, yet it is more a meditation on how a lack of diversity within tech can lead to blind spots in decision making:
Ultimately, I don’t know what will happen to Bitcoin, but I’m skeptical of folks who are attracted to it because it allegedly removes humans from the equation: that is and always has been an idea that only makes sense in the very narrowest view of a single Bitcoin transaction, as we are seeing all too clearly in the community’s inability to address a relatively minor issue.
More broadly, I hope that the fundamental humanity that goes into any decision — product, policy, or otherwise — is appreciated by everyone in tech. Just as products and companies are either growing or dying, so too efforts to make the technology industry more accurately reflect, and thus better serve (and better monetize!) the diversity of the human race, are either explicitly improving the status quo or implicitly embracing it. There are no neutral “rules.”