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Over coffee at Binary District’s Genesis London conference in February 2018, an intriguing question was posed: Could we solve Brexit using blockchain? Three months later, on 31 May, the collaborative technology community came together to attempt to answer it – or, more specifically, to discuss whether, by embracing blockchain technology, London can reinvent itself as the global digital capital it will need to become after Britain leaves the EU.
Introducing the speakers, compère Martin Bryant remarked: “Being from Manchester, I’ve always observed London from a distance, and it’s seemed to be the city that has it all. But as a digital player, London is relatively new. It developed rapidly to become Europe’s fintech capital – and then Brexit happened. So what’s next?”
Bryant went on to outline the key issues the impressive line-up of speakers would be addressing: how London can benefit from emerging developments in open banking and blockchain; whether GDPR should be viewed as a challenge or an opportunity and how new GDPR-compliant approaches to data can be developed; and whether centralisation of knowledge, data and wealth is a thing of the past and, if so, what this means for cities.
The first speaker was Dave Michels, Technology Law Researcher at Queen Mary University of London, who began by confounding delegates with a trick question: “Who here owns cryptocurrency?” Case law, he explained, shows that this is a grey area – a legal puzzle alongside that of whether blockchain is, or can be made to be, GDPR-compliant.
“GDPR may drive the development of private, closed blockchain and a move away from crypto anarchy,” he said. “Many questions remain unanswered, such as whether ICO tokens should be treated as securities and whether smart contracts are legally binding. We need to find solutions together as problems arise, and ensure that London has a robust legal framework in place to cope with new technologies.”
From leading edge to mainstream
Next to speak was Dolfin CEO Denis Nagy, who put forward our perspective as a provider of custody, asset management and brokerage services on the impact of blockchain on trade finance.
“Our industry is ripe for change,” he said. “It has existed for hundreds of years, based on the idea that parties inherently do not trust one another. At every step in the process are mechanisms to ensure that parties are not being lied to, and this makes transacting both slow and expensive. But technology is driving change, leveraging the transparency of blockchain. Our challenge is to get past proof of concept stage and see real implementation. Scaleable private blockchain solutions will improve efficiencies and competition, so we all lose less time, less money and less opportunity.”
“Technology is driving change.”
Denis Nagy · Dolfin
Nagy believes that blockchain in financial services has now moved past the stage of early adoption to enter a growth phase, which will see new providers and models emerging as deployments go viral across asset classes and incumbent processes and services are discarded. By 2025, he told delegates, adoption is likely to be considered mainstream and integral to the capital markets ecosystem.
Julian Wilson, Head of Mobile Innovation at Barclays, also approached the issues from a financial services standpoint.
“Blockchain offers financial institutions the opportunity to reconsider the foundations of the way they work,” he said. “The building blocks of transactions are well established: identity, trust and responsibility. Currently, we have multiple systems all telling the same story, which is complex and frustrating. Why can we not just send tokens that allow us to transfer value over an open network?”
But, he pointed out, this opportunity poses a real threat to the industry: “In a world where no third party is needed, what role is there for banks?”
One of the biggest names in blockchain technology, Waves platform CEO Sasha Ivanov, offered a glimpse into the future when he introduced Vostok, a private platform currently in the process of launching, which will combine open and closed blockchain systems to offer ready-made solutions for large businesses and government. The private blockchain platform and system integrator will have applications as wide-ranging as electronic voting, supply-chain traceability, identity management, corporate registry systems, real estate transactions and government tenders, Ivanov said.
“It will take time to build secure open blockchain solutions, so closed systems are a viable interim solution.”
Sasha Ivanov · Waves
“Blockchain is ten years old already,” he said. “The technology is not new. But it is a new paradigm, and it is still not mature. It will take time to build secure open blockchain solutions, so closed systems are a viable interim solution. Vostok is breakthrough technology: a private blockchain platform that deals with all applications and combines the best of open blockchain and traditional centralised systems. Our role is to make this the default solution.”
The evening concluded with a panel discussion in which the question was posed: “What are London’s prospects post-Brexit?” After the exciting and groundbreaking ideas the panellists has presented, Binary District’s Editor in Chief and Head of Insight, Margarita Khartanovich, ended on an optimistic note.
“Brexit could be positive for London,” she said. “It gives us the opportunity to ask whether we are a fintech hub or something bigger. Sadiq Khan is a digital mayor and London could be the digital capital of the world, not just of Europe.”