Visa V-0.5% is taking robust steps to connect digital currencies to its global electronic payments network in order to prepare for a financial future where digital assets comprise a meaningful amount of a saver’s wealth.
To date, 54 crypto companies have partnered with Visa to enable crypto spending. Much of this progress comes from the issuance of debit cards using Visa’s FastTrack program, which is targeted towards integrating fintech companies with the Visa network. Over the summer, the firm launched two more products, a crypto rewards credit card in partnership with BlockFi and a debit card with major crypto exchange FTX, which just raised a record $900 million at an $18 billion valuation.
Other crypto-friendly card partners include CoinZoom, Coinbase, Zap, Crypto.com, Bitpanda, Fold, Upgrade, Wirex, and ZenGo.
“We saw this opportunity as these crypto platforms grow, as consumers want to gain access to the liquidity that they have held in these assets, issuing a Visa card could become a bridge that unlocks that value and enables it to be spent at any merchant that accepts Visa,” Head of Crypto at Visa, Cuy Sheffield said.
These projects have gained traction — crypto-linked Visa debit cards facilitated over $1 billion worth of transactions across Visa’s 70 million merchants worldwide in the first half of 2021 alone. $1 billion is only a small fraction of the trillion-dollar payments industry, however retail interest in cryptocurrencies is picking up, suggesting the market has room to grow, especially with younger generations. Sheffield says that no single predominant spending category has emerged in crypto-linked card use.
Survey data suggests that younger generations are increasingly diverting wealth into cryptocurrencies and digital assets. This is especially true for the most affluent members of these generations, which are especially prized by financial institutions and card networks.
A Michelmores survey of 501 ‘affluent Millennials’ in the United Kingdom found that one in five have invested in cryptocurrencies and a CNBC survey of 750 investors conducted in April and May of 2021 reports that nearly half of Millennial millionaires have at least 25% of their wealth in cryptocurrencies. Millennial interest in crypto isn’t limited to the Western world — a recent Mastercard MA-0.1%survey found that Middle Eastern and African Millennials surveyed during February and March of 2021 are especially interested in crypto with 67% agreeing they are more open to using crypto now than they were in 2020.
Meanwhile in Asia, India and China each account for 33% of the $9.4 million worth of weekly peer-to-peer payments volume in the region. In both nations, tech savvy millennials with aspirations of wealth are leading the trade. The Covid-19 pandemic only accelerated this trend by simultaneously spurring savings ambitions and interest in cryptocurrencies.
Approximately 70% of burgeoning retail brokerage platform Robinhood’s $80.9 billion assets under custody came from users aged between 18 and 40. $11.5 billion of those assets under custody are cryptocurrencies, according to the firm’s S-1 filing, and for the three months ended March 31, 2021, 17% of its total revenue was derived from transaction-based revenues earned from cryptocurrency transactions. This number is up from 4% for the last three months of 2020. All of this data suggests high interest among retail traders between 18 and 40 in crypto assets.
As retail brokerage accounts boomed, the crypto market was also hitting new heights, adding to the excitement among younger generations. Bitcoin reached its all-time-high price of $64,654 on April 14, 2021, just after the one year anniversary of the start of the pandemic. The market crashed a month later, bottoming out in July at a $1.2 trillion value for all cryptocurrency in circulation. Since then, the crypto economy has started to recover. The market broke past $2 trillion again on Wednesday, August 11, for the first time in nearly three months.
While investors are still mostly thinking long-term, a time will come when they need to generate liquidity from their holdings. Speaking to that effect, Sheffield argues that even if crypto owners intend to HODL (hold on for dear life, a crypto rallying cry), the day will come when they want to spend.
When that happens, Lisa Ellis, partner and senior equity analyst at research firm MoffettNathanson noted that they won’t want to go through the often arduous process of converting that crypto into fiat because of what Visa is doing.
“Brokerages like Fidelity figured out a long time ago that they should — and Merrill Lynch — figured out that they should issue a card against the balance in your brokerage account because that way you can keep your money in the brokerage account and you’re not constantly moving money,” Ellis said. “It’s basically the same. This is just allowing people to keep funds in what’s essentially a brokerage account and keep it in crypto. And then if they need it for spending fine and people like to do that.”
These developments are unlikely to stop with crypto-fiat payments. In pursuit of creating opportunities for seamless crypto transactions, Visa is finding new ways to appeal to crypto platforms who are looking to expand client offerings. Among these upgrades is the ability for crypto firms to settle payments using a dollar-pegged and quickly-growing stablecoin, USDC. As of writing, USDC’s market cap stands at $27.39 billion.
Typically when transactions are carried out with a crypto-linked debit card offered by a company like Crypto.com, that company converts the crypto to fiat and then sends the funds to Visa, who then sends the funds to the merchant’s bank for the appropriate amount and in the correct currency. Through a partnership with the first federally chartered digital asset bank, Anchorage, Visa will now accept USDC, instead of fiat, from card providers like Crypto.com.
“The goal is if we can make it easier for crypto platforms to issue Visa cards and interact with Visa we think many more — and we’re already seeing a ton of demand in crypto companies coming to us — will have a path to creating a Visa card,” Sheffield said. “We are committed to Visa being the preferred network for crypto wallets and so we want to meet them where they are.”
Credit card giant Visa today announced it is connecting its global payments network of 60 million merchants to the U.S. Dollar Coin (USDC) developed by Circle Internet Financial on the ethereum blockchain. The digital currency is now valued at $2.9 billion.
While Visa itself won’t custody the digital currency, effective immediately, the partnership will see Circle working with Visa to help select Visa credit card issuers start integrating the USDC software into their platforms and send and receive USDC payments. Circle itself is also going through the same Fast Track program. In turn, businesses will eventually be able to send international USDC payments to any business supported by Visa, and after those funds are converted to the national currency, spend them anywhere that accepts Visa.
After Circle itself graduates from Visa’s Fast Track program, likely sometime next year, Visa will issue a credit card that lets businesses send and receive USDC payments directly from any business using the card. “This will be the first corporate card that will allow businesses to be able to spend a balance of USDC,” says Visa head of crypto Cuy Sheffield. “And so we think that this will significantly increase the utility that USDC can have for Circle’s business clients.”
The partnership, in conjunction with an earlier $40 million investment Visa led in a cryptocurrency startup for holding similar assets issued on a blockchain, a recent blockchain patent application for minting traditional currency on a blockchain, and an increasing amount of work directly with central banks, is the latest evidence that the credit card giant sees the technology first popularized by bitcoin as a crucial part of the future of money.
“We continue to think of Visa as a network of networks,” says Sheffield, a five-year veteran of Visa, who took over as head of crypto last June. “Blockchain networks and stablecoins, like USDC, are just additional networks. So we think that there’s a significant value that Visa can provide to our clients, enabling them to access them and enabling them to spend at our merchants.”
Leading up to the partnership, Visa had already onboarded 25 cryptocurrency wallet providers as part of its Fast Track program—including Fold and Cred— each of which can now pilot the USDC integration. Going forward, other cryptocurrency wallet providers like BlockFi, which yesterday announced it will launch its bitcoin rewards Visa next year, will be able to use USDC in the first quarter of 2021.
Visa estimates that $120 trillion in payments annually are made using checks and instant wire transfers, costing as much as $50 each, regardless of the size of the transaction. Since USDC settles on the ethereum blockchain, transactions can close in a little a[s] 20 seconds and, importantly, can be done for nearly free, Visa believes its vast array of merchants could choose to use this nearly instant alternative form of payment. “We worked closely with digital currency wallets to issue Visa credentials,” says Sheffield. “And helping them receive USDC payouts can add additional value for them.”
Visa’s entrance into the digital dollars world is the culmination of two years of work at the credit card giant. At the core of Visa’s evolution is a new understanding of itself as a network of networks, according to Sheffield, some of which Visa owns, like Visa Net, and others it doesn’t, such as the Swift interbank payment network, local ACH networks and now USDC.
On the product side, Visa’s cryptocurrency work is largely focused on its Fast Track program for helping companies obtain credentials for issuing Visa credit cards. Most notably, in February 2020, Coinbase became the first cryptocurrency company to be granted principal membership status by Visa, meaning it can in turn issue cards to others. Relatively few of those companies are using crypto-assets like bitcoin, according to Visa’s global head of financial technology, Terry Angelos. While the majority of the crypto-plays consist of “tokenized versions of fiat,” similar to USDC, backed by traditional currency, issued on a blockchain and spendable via the card.
On the research side, Visa’s work in the area is largely focused on investing in startups and filing patents. Last year, Visa made its first public investment in blockchain by coleading a $40 million Series B in digital currency infrastructure provider Anchorage, which builds technology for storing assets issued on a blockchain. Angelos compares the investment to Visa’s 2015 backing of e-commerce infrastructure provider Stripe, which could go public this year at a $36 billion valuation. While Anchorage is a much earlier-stage startup, founded in 2017, the firm has already developed a number of technological breakthroughs, including privacy-preserving technology called Zether, which JPMorgan used in its own cryptocurrency project.
Especially relevant to today’s news, Sheffield describes Anchorage’s cryptocurrency custody technology as a possibly crucial component for central banks looking to issue digital currencies (CBDCs). While stablecoins like USDC are backed by currency issued by a central bank, a CBDC would be issued directly by the central bank and could lead to a reimagining of traditional finance. While former JPMorgan exec Daniel Masters argues CBDCs could make commercial banks unnecessary, Sheffield says they’ll still have a place in the future of currency issued on blockchains. “We are actively working with commercial banks to help them understand and navigate transitions to digital currency based products.”
On a related note in March 2020, Visa’s research team applied for a patent for technology that could be used by central banks to issue any fiat currency, of which dollars, yen and renminbi are an example. At the time, a spokesperson indicated that the technology was as likely to be used for the creation of a new product, as it was to “protect” its existing businesses. Sheffield further clarified: “We are continuously exploring and filing patents for innovative technologies like digital currency and CBDC.”
On their way to today’s announcement, both Visa and Circle have undergone a number of high-profile crypto-pivots. In October 2019, after making a huge bang by being a member of Facebook-founded Libra Association’s consortium of companies building a stablecoin backed by a basket of fiat currencies, Visa left the organization.
That same month, Circle, which has raised $271 million in venture capital, initiated a fire sale on two of its most valuable assets, starting with cryptocurrency exchange Poloniex, followed by Circle Invest in February 2020. Another product, Circle Pay, no longer lets customers buy or sell bitcoin or any other cryptocurrency and its once-vaunted OTC desk is closed.
As all this was happening, the firm, whose full name is, tellingly, Circle Internet Financial, rebranded its home page with a focus exclusively on stablecoins and central bank digital currencies. Circle founder Jeremy Allaire, whose last company, online video site Brightcove, went public in 2012 and is now valued at $659 million, envisioned the company as a payment rail for the internet.
While his focus was initially on bitcoin, then other cryptocurrencies, USDC is built on top of ethereum, meaning tiny amounts of the cryptocurrency ether are used as “gas” to pay for the transactions. While the drastic changes to the business are notable, the underlying mission appears to have remained the same.
USDC was first minted in September 2018. Unlike bitcoin, it is backed 1:1 by U.S. dollars, which are audited by accounting firm Grant Thornton to ensure the actual amount of the asset in circulation is at least equal to the dollars backing the assets. While exchanges and marketplaces that directly accept USDC as payments (without Visa or another card provider) are responsible for their own AML-KYC compliance, reserves are governed by the nonprofit Centre Consortium founded by Visa principal member Coinbase and Circle, with other members forthcoming.
To help manage all this and open up membership to other companies, the consortium yesterday announced its first CEO, David Puth, the former leader of CLS Bank International, a similarly structured foreign exchange settlement consortium owned by 70 financial institutions.
The first use-case for stablecoins was as an on-ramp and off-ramp for bitcoin investors who wanted to enter or exit positions faster than traditional banks could do with dollars. USDC’s market cap, representing the total amount of dollars in circulation, has been rising with the price of bitcoin since March 2020, when bitcoin started an eight-month, 271% ascension to $19,134, according to CoinGecko. Over the same period, USDC has grown 525% to almost $3 billion today. While the first stablecoin, Tether, is still king with a market capitalization of $18 billion, a number of others are now also competing, including DAI at $1 billion and Binance USD at $662 million.
Then, this March, Circle started offering services to let businesses accept USDC as payment, similar to those that run on FedWire, Swift and ACH rails, starting at about $200 a month. But instead of taking up to three days to close, transactions denominated in USDC and other stablecoins close almost instantly. So far about 1,000 businesses including institutional traders, banks, neobanks, on-demand delivery companies and gaming companies have opened accounts. Allaire says he’s in talks with a number of financial institutions exploring USDC as a possible upgrade to their corporate treasuries.
In June 2020 Circle announced it would start issuing USDC on the faster Algorand blockchain, which settles on average in four seconds, as part of what it describes as a “multichain framework.” In rapid-fire succession the firm then announced the Stellar and Solana blockchains would also be used to issue USDC. Algorand and Solana issuances are already live, with Stellar issuances scheduled to be minted in Q1 2021.
While onboarding to crypto trading markets was the first stablecoin-use case, things are evolving. In March 2020 USDC was approved as a form of collateral for loans issued using the MakerDAO protocol, the industry leader of a new financial category called DeFi, or “decentralized finance,” where services typically offered by banks, like lending, are offered via open-source software that allows individuals to directly connect. Of the $14.5 billion now locked in DeFi platforms according to data tracking site DeFi Pulse, nearly 20% are on Maker, with nearly half of that, or about $403 million worth, now in the form of USDC.
Long before DeFi was called DeFi, though, it went by a different, more illuminative name: DAO, short for “Distributed Autonomous Organization.” After some early high-profile failures the concept was rebranded with the focus on finance. Even the name MakerDAO hearkens back to this earlier, if occasionally overshadowed vision for the future of organizations. Allaire describes that future as a world where everything from contractual agreements to the payment of taxes are built into plumbing that directly connects individuals and enterprises in a wide range of new kinds of business relationships.
“Imagine a capital marketplace that is for anyone who needs capital, or anyone who needs to offer capital that has the same efficiency that Amazon has for e-commerce, the same efficiency that YouTube has for content, effectively, capital markets with the efficiency of the internet, which is essentially zero,” says Allaire. “And that will ultimately return trillions of dollars in value back to the economy, it will reduce costs for every business in the world, it will accelerate the way in which individuals can participate in commercial activity and commerce activity, in conducting their labor and interacting with businesses around the world.” Follow me on Twitter or LinkedIn. Send me a secure tip.
I report on how blockchain and cryptocurrencies are being adopted by enterprises and the broader business community. My coverage includes the use of cryptocurrencies and extends to non-cryptocurrency applications of blockchain in finance, supply chain management, digital identity and a number of other use cases. Previously, I was a staff reporter at blockchain news site, CoinDesk, where I covered the increasing willingness of enterprises to explore how blockchain could make their work more efficient and in some cases, unnecessary. I have been covering blockchain since 2011, been published in the New Yorker, and been nationally syndicated by American City Business Journals. My work has been published in Blockchain in Financial Markets and Beyond by Risk Books and I am regularly cited in industry research reports. Since 2009 I’ve run Literary Manhattan, a 501 (c) (3) non-profit organization dedicated to showing Manhattan’s rich literary heritage.
Today In Crypto 03/12 – Visa Partners With Ethereum Digital-Dollar Startup That Raised $271 Million, Rare Indicator Flashes Buy Bitcoin Now With Historical Upside Average Move Of 50X, Paypal Is Outstripping The Supply Of Newly Mined Bitcoins, Insiders Are ‘very optimistic’ About How Fast Eth2 Will Unfold, CEO of $7 Trillion Fund Sees Bitcoin as ‘Global Market’ Asset, Bearish – New Congressional bill says it would be ‘unlawful’ to issue stablecoins, ‘provide any stablecoin-related service’ without federal approval Mega Launch December 2020 $500M Crypto Project Earn Crypto Passively More Details Here http://cryptoaitrading.com/ Learn how you can earn ETH in a decentralized way and how I earned over $1M in ETH with this platform – http://watch.earnethdailysystem.com/ Learn how you can earn TRXin a decentralized way and how I earned over $800K in TRX with this platform – http://watch.earntrxdailysystem.com/ Get free access to Bitcoins Wealth Club system and free course “secrets to grow wealth in Bitcoin” http://bitcoinswealthclub.com Our Facebook Group https://www.facebook.com/groups/bitco…
Perucoin is a project initiated by the company Bits2u, which aims to expand knowledge about cryptocurrencies in Peru. Concrete Objective Bitcoins will be mined in the mining farm and with 30% of the collected revenue will be used to purchase the PeruCoin that are available in the market every month.
Encourage the public to invest in cryptocurrencies. Create one of the most big mining farms in Peru Teach based on guided visits to the mining farm how the mining machines work. PeruCoin’s main objective in the short term is to complete the first phase of our Roadmap which includes the purchasing and acquisition of the factory which will later be converted into a mining farm.
In addition, we aim to enhance and foster the widespread adoption of cryptocurrencies among the Peruvians. Through the Mining farm, we also aim to become the state-of-the-art generation crypto-mining platform leveraging the potentials ofBlockchain technology.
Partnerships with other platforms that accept PeruCoin as a means of payment, such as Opolo, Lkcoin, Converse with physical businesses to accept PeruCoin or Bitcoins.
We intend to bring great financial returns for our investors, PERU token holders, and participating merchants while also delivering amazing value propositions to the Peruvians community.
PeruCoin’s vision is to promote the knowledge about cryptocurrencies to the Peruvian population through guided visits to a factory where they can appreciate the technicalities and operations of the mining machines in action and through conferences.
We plan to achieve this by educating and increasing the awareness of the general Peruvian population on the benefits and safety of blockchain technology and adopting digital currencies. Ideally, we envisage driving the development of a new financial ecosystem in Peru grounded in the interactions between educating the populace and interactions of blockchain technology and assets management
PeruCoin’s vision is to promote the knowledge about cryptocurrencies to the Peruvian population through guided visits to a factory where they can appreciate the technicalities and operations of the mining machines in action and through conferences.
We plan to achieve this by educating and increasing the awareness ofthe general Peruvian population on the benefits and safety of blockchain technology and adopting digital currencies. Ideally, we envisage driving the development of a new financial ecosystem in Peru grounded in the interactions between educating the populace and interactions of blockchain technologyand assets management.
Want to join our community and invest for your future?? We are pleasure to meet your needs respectfully
As the implications of the invention of have become understood, a certain hype has sprung up around blockchain technology.
This is, perhaps, because it is so easy to imagine high-level use cases. But, the technology has also been closely examined: millions of dollars have been spent researching blockchain technology over the past few years, and numerous tests for whether or not blockchain technology is appropriate in various scenarios have been conducted.
Blockchain technology offers new tools for authentication and authorization in the digital world that preclude the need for many centralized administrators. As a result, it enables the creation of new digital relationships.
By formalizing and securing new digital relationships, the blockchain revolution is posed to create the backbone of a layer of the internet for transactions and interactions of value (often called the ‘Internet of Value’, as opposed to the ‘Internet of Information’ which uses the client-server, accounts and master copy databases we’ve been using for over the past 20 years.)
But, with all the talk of building the digital backbone of a new transactional layer to the internet, sometimes blockchains, private cryptographic keys and cryptocurrencies are simply not the right way to go.
Many groups have created flowcharts to help a person or entity decide between a blockchain or master copy, client-server database. The following factors are a distillation of much of what has been previously done:
Is the data dynamic with an auditable history?
Paper can be hard to counterfeit because of the complexity of physical seals or appearances. Like etching something in stone, paper documents have certain permanence.
But, if the data is in constant flux, if it is transactions occurring regularly and frequently, then paper as a medium may not be able to keep up the system of record. Manual data entry also has human limitations.
So, if the data and its history are important to the digital relationships they are helping to establish, then blockchains offer a flexible capacity by enabling many parties to write new entries into a system of record that is also held by many custodians.
Should or can the data be controlled by a central authority?
There remain many reasons why a third party should be in charge of some authentications and authorizations. There are times when third-party control is totally appropriate and desirable. If privacy of the data is the most important consideration, there are ways to secure data by not even connecting it to a network.
But if existing IT infrastructure featuring accounts and log-ins is not sufficient for the security of digital identity, then the problem might be solved by blockchain technology.
As Satoshi Nakamoto wrote in his (or her) seminal work, “Bitcoin: A Peer-to-Peer Electronic Cash System”: “Merchants must be wary of their customers, hassling them for more information than they would otherwise need. A certain percentage of fraud is accepted as unavoidable.”
Private key cryptography enables push transactions, which don’t require centralized systems and the elaborate accounts used to establish digital relationships. If this database requires millions of dollars to secure lightweight financial transactions, then there’s a chance blockchains are the solution.
Is the speed of the transaction the most important consideration?
If high performance, millisecond transactions are what is required, then it’s best to stick with a traditional-model centralized system. Blockchains as databases are slow and there is a cost to storing the data – the processing (or ‘mining’) of every block in a chain. Centralized data systems based on the client-server model are faster and less expensive… for now.
In short, while we still don’t know the full limits and possibilities of blockchains, we can at least say the use cases which have passed inspection have all been about managing and securing digital relationships as part of a system of record.
Authored by Nolan Bauerle; images by Maria Kuznetsov
In 2008, at least 54,000 Chinese babies suffered after ingesting formula that had been contaminated. Demand for safe products has grown year over year, every year, since then. Companies like blockchain-centric Techrock have capitalized on this market by finding unique solutions to the authenticity problem. Techrock uses the blockchain to track every step of a product’s lifecycle and rewards consumers for verifying it through their mobile phones.
Chinese Consumers Increasingly Willing to Pay a Premium for Authentic Imported Food
In China, it is reportedly difficult to get authentic products. Some researchers have found that more than 90% of the food sold in China is faked in one way or another.
For non-food products, this isn’t such a big deal; but there are some markets where it’s life and death – such as baby formula and other food products, which can have deadly side effects. According to Techrock, which spoke to CCN about their recent partnership with Rakuten, the situation has created a market for authentic goods as large as $60 billion per year.
Techrock uses blockchain technology in two aspects of its business. On the one hand, it offers a loyalty program for customers who use the service to purchase authentic products. On the other, it creates a permanent record of a product’s authenticity.
From Supply Chain to Reward Points, Blockchain’s Role
Every product in Techrock’s store has a digital representation on the blockchain. The company has developed a reputation for delivering high-quality, authentic goods, and it’s applying the same process to its Rakuten “zone.”
Their target market is less about authentic shoes or electronics and more about health supplements and other things which people prefer not to risk. The loyalty program helps them retain customers, and using the blockchain for it, the points have no expiration date. A side effect of Techrock’s Tael loyalty program is that it introduces many people to blockchain for the first time.
Techrock recently entered a partnership with Japanese retail giant Rakuten to get authentic Japanese goods to customers. Rakuten has long had an interest in blockchain companies, but it only touches the technology in a tertiary way here.
Rakuten is looking to expand its reach in China, where it is far from the leading retailer. By contrast, Alibaba is the boss in China – but Alibaba’seBay-style product suffers a lot of knock-off problems that the rest of the Chinese market does.
Built on Hyperledger, Techrock’s labeling technology ensures that products are real. The customer can verify this with an app on their phone, and once they do so, they earn their reward points at the same time. The rewards can be used to purchase more goods in the store, which encourages customers to keep using Techrock.
Techrock’s partnership with Rakuten means that Chinese customers don’t have to worry about fakes, and they have streamlined access to authentic, safe products. Techrock Co-Founder Alexander Busarov told CCN:
“We already sell in over 220 or 230 cities where our consumers are located. It’s all sent by the local dealer companies. We think our business will grow as the demand grows.”
China is reportedly the largest market for both food and firms that verify the safety of food. Consumers have been driven online as they continually lose trust in local vendors. Regulations and other issues make it such that local companies, like Techrock, will ultimately supply the demand.
Techrock’s partnership with Rakuten is notable because they’re the third to secure such a partnership – JD.com being one of the first – and they are built entirely on blockchain.
From the embers of World War I emerged a new kind of organization, led by entrepreneurs, committed to ensuring the free flow of goods across the world’s war-ravaged borders.
The International Chamber of Commerce, whose mission is to streamline global business, is one of last vestiges of the League of Nations, founded in 1920 by U.S. President Woodrow Wilson to peacefully settle international disputes. By 1923, following the League’s lead, the ICC had established international courts to arbitrate business disputes, and in the aftermath of WW II, it represented global business interests at the Bretton Woods conference, which established the current monetary order.
“If goods are able to move across borders without the need to be accompanied by troops,” says John Denton, the ICC’s current secretary general, “there is a higher probability of peace and prosperity.” The Paris-based group, which represents 45 million businesses in more than 130 countries and brands itself the world’s largest business organization, is now making its boldest play in a generation.
With global borders hardening once again, this time behind border walls, broken unions and looming trade wars, Denton signed an agreement with the Singapore-based blockchain startup Perlin Net Group to explore how the technology, made popular by bitcoin for its ability to move value without banks, could help the ICC continue its mission to facilitate the free flow of goods.
“We can trace back the ICC interventions that made a big impact on the global economy in the 20th century,” says Denton, who was a fellow at the Australian Institute of International Affairs before being appointed secretary general of the ICC last year. “We think this might be one which we can look back on in 100 years and say the ICC shifted blockchain in a way that enabled the private sector to function more effectively in a sustainable way and actually create more opportunities for people.”
According to the terms of the agreement, part of which was shown to Forbes, the ICC and Perlin will create a new group, the ICC Blockchain/DLT Alliance, a reference to distributed ledger technology similar to the blockchain that powers bitcoin. The companies are exploring how Perlin’s blockchain platform, which has yet to publicly launch, could be used to shine a light on obscure supply chains and simplify cross-border trade finance.
As part of the agreement, the ICC will help Perlin recruit members to its nascent blockchain alliance, specifically by making introductions to the organization’s massive member pool, which in addition to most national chambers of commerce includes direct membership from companies like Amazon, Coca Cola, Fedex, McDonalds and PayPal. Also, as part of the agreement, Perlin will join the ICC as an official technology partner, offering free access to its blockchain platform during the early stages of the project.
Denton shared his plans with the ICC Banking Commission at its annual event in Beijing earlier this week, and the agreement, which was signed on March 20, will be formally announced at an ICC event in Singapore later today.
Unlike some early blockchain consortia, the ICC Blockchain/DLT Alliance already had projects under way when it was announced. According to the agreement, the ICC and Perlin will share the results of their first blockchain proof of concept, a collaboration with the fabric giant Asia Pacific Rayon (APR), in May at the Copenhagen Fashion Summit.
For that project, called “Follow Our Fibre,” APR is logging data in the blockchain at every level of its supply chain, from the trees that are harvested to the chemical treatments that turn them into the silk-like rayon substance through to the massive spools that are later sold to clothing producers.
“Globally, there is a dynamic shift in the textiles and fashion sectors calling for a more traceable and transparent supply chain,” says Cherie Tan, vice president of communications and sustainability at APR. “Follow Our Fibre will enable us to leverage powerful blockchain functionality to drive greater efficiencies.”
Other proofs of concept in the works that stand to benefit from the ICC partnership include a project with Mfused, a cannabis processor in Washington State that is using Perlin’s tech to prove the origin of its plants by recording every level of its supply chain, from when they are planted to when the cannabis is inhaled, in a shared, distributed ledger; a project with an unnamed tuna processor in Latin America; and a developing project in Africa to trace the origin of cobalt, which has a long history of being mined by unethical supply chain participants.
Assuming enough supply chains are unified on the Perlin blockchain, businesses could log digital representations of the commodities, called tokens, on the platform. This will enable the counterparties to trade directly, with bills of lading required to move freight and letters of credit, which are typically handled by banks, all tracked directly on the shared ledger.
“An interesting economic model is we could effectively launch governance around this,” says Denton. “If we’re able to tokenize this we could insert ourselves as the trusted intermediary, and there would probably be an admin charge, but not much.” A 2018 report by the ICC, the World Bank and others found that 90% of the world’s trade finance was being provided by 13 banks, something Denton thinks is evidence of a need to decentralize.
Perlin’s blockchain, like ethereum’s, is being designed to let users track and move all kinds of value and write distributed applications (dapps) that don’t rely on centralized processors. Also like ethereum, Perlin will have a native cryptocurrency, called perls, which are expected to be minted over the coming three months or so, depending on regulatory considerations.
While supply chain management is increasingly seen as ripe for disruption by blockchain, models like Perlin’s, which rely on tokens, have had difficulty gaining traction as regulators clamp down on what is required of such tokens. By contrast, models using permissioned blockchains, such as what IBM is doing with a number of industry-specific consortia, and what R3 and Hyperledger are doing more generally, are seeing broader interest.
Perlin founder Dorjee Sun positions the nascent ICC network as similar to competing consortia but for small and medium-size businesses. “This is a massive democratization effort of DLT, because now any company of the 45 million ICC members can give the benefits of DLT a try,” says Sun. “Not just massive companies that can afford IBM’s services.”
In a statement, 2gether revealed that the card “instantly” converts the cryptocurrency to fiat currency. Users within the 19-member Eurozone economic bloc can utilize the card without paying any fees. The Madrid-based banking startup believes that with its prepaid card it is solving problems associated with making purchases using virtual currencies…..
According to cryptocurrency analyst Alex Ziupsnys, the introduction of the crypto indices of Nasdaq could lead to the approval of a wide range of investment vehicles in the long-term.The analyst said: “NASDAQ to add a bitcoin index on its platform. They are reading the writing on the wall and don’t want to get left behind. There is no stopping this. Adoption happens gradually right in front of you, until you finally pause, look around, and bitcoin is the dominant asset…….
Blockchain analysis firm Chainalysis has disclosed that just two groups benefited from the majority of cryptocurrency hacks that have occurred to date. Per The Wall Street Journal, the two hacking groups could have obtained as much as $1 billion in cryptocurrencies. Since bitcoin came into being, over $1.7 billion worth of cryptocurrencies are estimated to have been stolen. According to Chainalysis’ chief economist, Philip Gradwell, the two hacking groups are most likely still active.