BLOCKCHAIN & Digital Financial Services 29/11/17 · • Permissioned blockchain e.g. Corda,...
Transcript of BLOCKCHAIN & Digital Financial Services 29/11/17 · • Permissioned blockchain e.g. Corda,...
Shiva Bissessar, BSc (Hons), MBA, MSc
Managing & Technical Director
@PinakaTT
www.pinaka.co.tt
BLOCKCHAIN & Digital Financial Services29/11/17
https://ripple.com/insights/kosta-perics-mission-to-reach-the-unreachable/
Digital Financial Services (DFS)
• Financial Inclusion
• Economic Development
• but its not just for the poor
• Expected attributes of any payment system
• Security & Privacy
• Speed & Efficiency
• Scalability
• Digital Identity
Digital Currency, Blockchain & DLT • Decentralized digital currency e.g. Bitcoin (BTC)
Litecoin (LTC)
• Centralized Central Bank issued digital currency(CBDC) & Digital Fiat Currency (DFC)
• The underlying technology of digital currency i.e.Blockchain• Public blockchain e.g. Ethereum (ETH).
• Permissioned blockchain e.g. Corda, Hyperledger
• Distributed Ledger Technology (DLT)
Exploring Digital Financial Services (DFS)
• Authorities would like to increaseparticipation in the digital economy &entrepreneurs bemoan lack ofpayments mechanisms to participatein global marketplace
• In 2016 and 2017 the ITU heldworkshops for the benefit of policymakers and other stakeholders,introducing new concepts of DFS
• 2016 UN ECLAC digital currency study uncovered
longstanding payments system deficiencies in
certain territories
Wire Transfer
Electronic Money
Via external payment providers e.g. Paypal
ATM, P2P, Remittance
Mobile Money(i) Complementary
(ii) Collaborative
Airtime /Credit
P2 P transfer (purchases, international remittance etc.) via MNO & MFIe.g. M-PESA
Utility payment
Remittance e.g. BitPesa
P2P via SMS
Bank Exchange Agent
E-CommercePayment card
Mobile MoneyAlternate Infrastructure
USE
CA
SES,
EX
AM
PLE
SSE
RV
ICES
MED
IUM
CONVERSION POINTS
Enable SMEs to receive payments via payment processors
Digital Currency
E-Commerce
FAMILIAR NOVEL
Money
Via local merchant account + internat’lpayment gateway
P2P transfer e.g. Paym
NFC payments e.g. ApplePay
http
://repo
sitorio
.cepal.o
rg/han
dle/1
13
62
/39
860
Caribbean Digital Currency Adoption
• Caribbean authorities remain focused on weaknesses and this poses a threat to development of digital currency industry in Caribbean
http
://repo
sitorio
.cepal.o
rg/han
dle/1
13
62
/39
860
UK Approach to Digital Currency
• Address weakness: AML controls & BSI consumer protection• Stimulate innovation: £10M for research into innovation of digital currency
http
://repo
sitorio
.cepal.o
rg/han
dle/1
13
62
/39
860
DFS landscape in Caribbean at present
• Some authorities have limited view on mobilemoney
• Some have been more open in working withindustry to develop regulatory classes to allow foroperations
• Potential digital currency exchange services andoffering to do a CBDC / DFC pilot.• Some CBs are only now examining digital currency and
blockchain
• Limited expertise and academic research invarious DFS areas
Opportunities for development of DFS
• Cash in & cash out
• Pay utility bills
• P2P
• G2P
• Merchant payment
• Remittances; domestic & international
• Financing and credit
• Bridge the gap between policy makersand market entrants
• Promote responsible adoption ofblockchain and DLT based systems,advising public institutions and privateindustry on policy, compliance, andtechnology
Objectives
• Industry Building
• KnowledgeBrokering
• Global Engagement
• Increased participation in the DigitalEconomy
• Correspondent bank de-risking challenge
• Central Bank Digital Currency (CBDC) &Digital Fiat Currency (DFC)
• Intra-regional settlement networks
Focus Areas
Exploration of Caribbean DFS• Collaborative approach required
• Financial regulators, policy-makers,
• Innovation and entrepreneurship
• Service provider driven & independentresearch
• Exploration cannot be one-sided
• Alignment with international workstreams
• Capacity building
Ransomware
• Ease of receiving value over the Internet comeswith the cost of uptick in ransomware
• Ransomware takes advantage of systemvulnerabilities and/or social engineering
• Back-up are useful, but not the answer
• Tools exist which can detect suspicious activity onyour device & thwart attempts to encrypt you datae.g. BicDroid, CryptoDrop
Anonymity
• The pseudo-anonymous nature of Bitcoin isoften confused for true anonymity.
• Other protocols now exist with offer greaterlevels of anonymity.
• Tracing transactions is an active field ofresearch.
• Training for authorities, law enforcementshould be given some emphasis e.g.UNODC, Inerpol,
Opportunities for cybersecurity
• Caribbean has proposed/enactedcybercrime & data protection legislation anddigital ID systems
• There is opportunity to develop Caribbeancybersecurity ecosystems
• Examination of blockchain could be withinremit of such ecosystem
The $10,000 question
• Governance remains an issue with discordbetween developers and miners
• Behind the price appreciation is acorresponding decrease in utility asmeans of facilitating payments
• Payments and remittance providers havecited fees, speed and efficiency asrationale in switching to other digitalcurrencies for transactions.
The future…
• Caribbean institutions need to examineeconomic development opportunities inDFS, blockchain & cybersecurity
• A complimentary service provider &independent research approach is advised
• The monetary evolution will take place withCentral Banks at the helm issuing CBDC orDFC
Shiva Bissessar, BSc (Hons), MBA, MSc
Managing & Technical Director
@PinakaTT
www.pinaka.co.tt
BLOCKCHAIN & Digital Financial Services29/11/17