November 2016

PROMOTING BLOCKCHAIN INNOVATION IN AUSTRALIA

In This Edition

- CEO's MESSAGE:
  Happy Birthday Bitcoin.  Now Blockchain is growing up, will Australia lead or         follow?

- AML/CTF Regulation of Digital Currencies targeted for 2017

 

- Focus on Full Profile - Blockchain solutions for AgriBusiness


 

- Blockchain Innovation in China - the view from Shanghai

 



Nick Giurietto


CEO's Message

Happy Birthday Bitcoin.
Now Blockchain is growing up, will Australia lead or follow?

H appy Birthday Blockchain!  October 31st marked 8 years since the publication of Satoshi Nakamoto's whitepaper that led to the launch of Bitcoin and set off the wave of Blockchain innovation that promises to transform our economy and society.

The promise of a peer-to-peer payments system was realised with the launch of Bitcoin in January 2009.  Today, the underlying blockchain technology is being adopted across all sectors of the economy.  The infant technology of 8 years ago is growing up and the pace of change is accelerating.


Australia is well-positioned to be a leader in blockchain innovation.  Both the ASX and SSX are working on world-leading blockchain settlements platforms, our major banks are active blockchain innovators with both CBA and ANZ announcing successful pilots of blockchain projects in recent weeks.  And our entrepreneurial sector has produced some great innovations including uproov.com and Full Profile.

Data61 is leading innovative thinking on blockchain and, very importantly, Standards Australia has won the global mandate to lead the process of developing technical standards for blockchain for the International Standards Organisation.

Finally, Australia's regulators are well respected and are responding flexibly when approached by businesses looking to implement innovative solutions.  Indeed, Treasurer Scott Morrison recently identified "the productivity gains and compliance savings of instantaneous certified compliance" as a key mechanism to improve the competitiveness and efficiency of the economy while promoting innovation and improving consumer protection. There is little doubt that blockchain will be a big part of this RegTech revolution.

ADCCA believes that the Government can boost RegTech innovation - and blockchain innovation more widely - by working with industry to develop a proactive regulatory reform strategy to encourage blockchain based innovation.

Indeed, ADCCA recently convened a workshop involving many of Australia's leading law firms who jointly developed an initial list of areas for regulatory reform that would provide greater certainty to business and encourage further investment in blockchain projects.  Suggested areas of focus included removal of legacy legislative references to specific technologies or entities that are the modern day equivalent of requiring a person with a red flag to walk in front of an automobile to bigger questions of legal recognition of digital identities and smart contracts.

ADCCA was invited to share this list with the Council of Australian Financial Regulators.

An essential next step will be to convene joint working groups between industry and government to review and refine these suggestions for regulatory reform and implement a program that gives a further boost to blockchain innovation and investment in Australia.

It has taken 8 years for the blockchain revolution to really begin to change the world.  By working together Australian industry and government can ensure that blockchain's next birthday sees Australia firmly cemented as a leader of blockchain innovation.

 
Nicholas Giurietto
CEO and Managing Director
ADCCA

   


AML/CTF Review
Regulation of Digital Currencies Targeted for 2017.

T he Attorney-General's Department has released its Draft Project Plan for the Implementation of the AML/CTF Review.

ADCCA welcomes the confirmation that the inclusion of digital currencies within the AML/CTF regime has been identified as one of the initiatives prioritised for completion in 2017.  The plan calls for the development of legislative proposals in the first half of 2017 and sets the ambition of AUSTRAC and industry implementation commencing in the second half of the year.

ADCCA has long advocated for this change and believes that its timely implementation is important for two reasons.  Firstly, known gaps in the current regime should be closed as rapidly as possible.  But secondly, formal regulation of the digital currency sector will provide business certainty to Australia's digital currency businesses. This will remove a growing competitive disadvantage versus international peers as other jurisdictions complete their own AML/CTF updates.

ADCCA welcomes the commitment to co-design of the new regime which will allow the policy goals of the government to be met in a way that takes advantage of the unique attributes of digital currencies and can be implemented by business efficiently and effectively.

ADCCA believes that the principle of co-design should be extended to other stakeholders in the reform including the banks. Joint participation in the design process will allow the banks to be confident that the architecture of the new regime also meets their compliance obligations and should allow them to confidently provide banking services to the digital currency sector. 

Ensuring that, so long as it is compliant with its AML/CTF obligations, a digital currency business has the opportunity to secure stable banking relationships is essential to the growth of this innovative sector in Australia.







FOCUS ON FULL PROFILE - Blockchain Solution for AgriBusiness


In agriculture a "Full Profile"  is a farmer's delight.  It means that the soil is saturated with enough water to ensure a successful harvest without further rain.

New ADCCA member, Full Profile, has set out to make farmer's lives easier in another important way - by removing the risk of buyer default that means that a farmer may not get paid for their hard-won harvest.

Currently, when a farmer makes delivery of their harvest, ownership of the grain passes to the buyer but payment occurs later.  This risk of buyer default is a real one - buyer and trader insolvencies occur every year - and can leave the farmer devastatingly out of pocket.

Full Profile's blockchain solution, which commences its commercial pilot for this year's Australian harvest, does away with buyer default risk.  The harvest quantity and quality is recorded at the point of delivery and associated smart contracts match the delivery to verified offers and ensure payment.

To learn more on how Full Profile's solution will use blockchain to make life easier for farmers, watch their presentation at Finovate here.
   


Blockchain Innovation in China - the view from Shanghai

Ron Tucker
ADCCA Chairman

In September, I attended the Global Blockchain Summit Week conference in Shanghai. This meeting is second only to Consensus in New York as a key international forum for the blockchain industry.

Judging by the energy and purpose on display that order may change next year.

I could see first hand how the China is embracing the use of blockchain across various sectors with key stakeholders in Asia embracing the most important technological revolution in financial services history.  The energy and enthusiasm among the participants from across China and Asia was electric.  The message for me was the significance of not just the Chinese market but also the interest by Chinese companies in active adoption of blockchain.  

There is little doubt that Shanghai -  in the words of Bloomberg  soon to become the next significant financial hub - sees Blockchain as a key part of that strategy.

Over 94% of digital currency trading involved Chinese yuan in this past August, up from about 60% a year earlier, according to data provider Bitcoinity. China's two biggest exchanges collectively account for more than 90% of global trading, with one exchange reaching more than 1 million registered users in the first half of this year, thanks to a user growth rate that was five times greater than a year earlier.

Australian business has an unprecedented opportunity to help lead this revolution. Our strong trading and economic ties to our neighbours, our banking sector's continuous ability to punch above our weight globally and our respected regulatory framework are real strengths.

This brings home to us the priority of looking ahead and not waiting for opportunities to fall in our laps.

NEW ADCCA MEMBERS

APIR

APIR provides the industry standard for identification and coding of financial products and market participants for Australia's Financial Services sector.

APIR is continuing to roll out critical information utilities to support the development of electronic business.



PERPETUAL

Perpetual is an ASX-listed, independent, diversified financial services company.  Perpetual's three business lines provide wealth management, financial advice and corporate trustee services.



ALLENS

Allens is a leading international law firm with offices throughout Australia and Asia.  Allens has ongoing client relationships that stretch back as far as 150 years.  Allens' clients include 55 of the world's top 100 companies and more than 75 of Australia's top 100 companies.



DLA PIPER

DLA Piper is a global law firm with lawyers located in more than 30 countries throughout the Americas, Europe, the Middle East, Africa and Asia Pacific.



FULL PROFILE

Full Profile develops software solutions that bring transparency, efficiency and trust to agri-commodity supply chain management.  With Full Profile, all participants in the ecosystem can act with confidence.



INCENT LOYALTY

Incent Loyalty leverages blockchain technology to develop a new wave loyalty-reward product that changes the loyalty dynamic from the closed, restricted value of conventional schemes to value that is truly open.  Incent comprises a suite of web and mobile applications that allow merchants and consumers to access and transact in a digital currency optimised for loyalty.



BLUE CHIP VISION

Blue Chip Vision is a disruptive financial technologies company.
BCV builds distributed, encrypted processing tools that improve efficiency, security, compliance & settlements.



DIGITAL CURRENCY HEADLINES

SBI to launch first bank-backed digital currency exchange.

CoinDesk, October 2016

A Japanese financial services group, SBI, is establishing a new company, dubbed SBI Virtual Currencies Co Ltd, that will provide exchange services for as-yet-undisclosed digital currencies


 

Webjet moves early with Microsoft to create first blockchain for hotel bookings

Australian Financial Review, July 2016

ASX-l isted online travel firm Webjet has taken the first steps towards making hotel bookings on blockchain technology, in what it claims is a world first in its sector.
The company has completed a six-month project behind closed doors with technology giant Microsoft to create a proof of concept, which it says has the potential to transform the way the travel industry processes and manages online payments for hotel bookings.

 
South Korea plans a national digital currency using a blockchain

Bravenewcoin, October 2016
 
The Chairman of South Korea's Financial Services Commission, Yim Jong-yong,  has announced that his department will "lay the systemic groundwork for the spread of digital currency".


 
ADCCA Membership Inquiries

Please click on here to inquire about becoming a member of the ADCCA
 
Copyright © 2016 | ADCCA | All rights reserved.

Published by the Australian Digital Currency & Commerce Association 
Editor: Nicholas Giurietto
Publisher: Ronald M. Tucker


The ADCCA Industry Newsletter reaches a regular audience of over 1200+ Industry and Government Leaders, domestically and abroad. This reach includes regulators, parliamentarians, enterprise C-Level executives as well as cross-industry stakeholder participants both at the professional association and emerging FinTech business levels. To learn more about ADCCA or enquire as to Membership opportunities, please contact us via the below:

Our mailing address is:
The ADCCA
PO Box 21122 World Square
Sydney NSW 2002
AUSTRALIA



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