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All fintech companies will use blockchain within 10 years: Aussie government report

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The Australian government’s Senate Select Committee on Financial Technology and Regulatory Technology has released a draft report citing blockchain technology more than 50 times.

The report is in response to Australia’s first recession in 30 years as a result of COVID-19, which was confirmed in the June quarter’s negative growth announced on September 2.

The document makes numerous recommendations about how the nation can “embrace technology and become globally competitive” said committee head Senator Andrew Bragg. He added:

It is my hope this interim report can be seen as a series of quick wins: new jobs and more choices.

There are dozens of references to blockchain and distributed ledger technology and the report cites submissions to the committee that blockchain’s potential is “estimated at $175 billion annually within five years and $3 trillion by 2030”. It quoted Piper Alderman partner Michael Bacina as saying blockchain’s use cases would grow exponentially across the financial and regulatory sectors:

Most fintech and regtech projects will either be built predominantly on distributed ledger technology or blockchain or heavily using that within the next 10 years.

The tax treatment of Initial Coin Offerings (ICOs) was addressed specifically with the recommendation that the regulatory framework around ICOs be developed to encourage blockchain development rather than inhibit it.

Power Ledger’s co-founder and Executive Chairman Dr Jemma Green highlighted that more than $26 billion had been raised through ICOs, however Australia has captured less than one percent of this value. She explained that by implementing new tax regulations the country could capitalise on the opportunity, “to capture a bigger piece of that $26 billion pie” which would result in employment for “employ tens of thousands of people”.

Other use-cases for the technology cited include blockchain as a reporting and management tool for property data and investments, and within the credentialing sector.

The technology will also play an integral part in Australia’s farming success through agricultural advancements, a sector set to grow to $100 billion by 2030 according to the National Farmers Federation. Senator Bragg said “innovative technology is the only future for the farming sector”.

The Committee will submit the final report in April 2021.



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How DeFi will kill the retail bank

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The world runs on consumer spending and consumer saving. It is everyday people who actually power the most important parts of the global economy and the global financial system. 

For consumers, this system runs through their retail bank. It is where most people save, spend and pay their taxes. This is the battleground for the coming fight: the battle for global consumer deposits.

Make no mistake, this will be the fight of the century. It will change the shape of the world more fundamentally than the internet has already. The internet was about information. DeFi is about capital — and as we all know, money is power.

Today, most people either hate or are indifferent to their bank. That is probably because they fine you for tiny mistakes, keep you on the phone for hours, give you the worst interest rates imaginable, and provide you with a user experience that borders on hostile.

That is not always the fault of the bank. Consumer regulation and controls have been mounting to the point that compliance is often one of the biggest cost centers for all retail banks. Such institutions cannot innovate because they are built to resist change, not to embrace it.

An irresistible opportunity

Decentralized finance has flipped the model on its head, delivering a new world of financial products, built using smart contracts that allow consumers to switch between providers in a matter of seconds, all at the click of a mouse.

Related: DeFi will bring global revolution to the traditional finance space

It is not that the DeFi model is just better — it’s simply fundamentally different. In the old world of retail banking, we had to trust the people that run banks. This trust is expensive. In the new world of decentralized finance, we trust the code that provides our financial services.

Protocols such as Aave, Uniswap and MakerDAO have the ability to directly control assets like USD Coin (USDC), Ether (ETH) and Wrapped Bitcoin (wBTC), enabling the rise of financial products that can operate 24/7, 365 days a year, with 100% uptime and no staff. It removes the cost of checks and balances. It takes handcrafted financial processes and turns them into automated programs.

Decentralized finance gives entrepreneurs an irresistible opportunity to truly compete in the world of global finance — a place that was once the exclusive realm of multinational corporations with eight-figure legal teams on retainer. Not only this, DeFi lowers the switching costs for a consumer to almost zero: I can move my capital from Aave to Compound to Uniswap in a matter of minutes, with precisely zero paperwork.

Related: DeFi-ing the odds: Why DeFi could rebuild trust in financial services

On DeFi, capital can flow almost instantly to the best value opportunities, and it provides the thing that global finance truly needs: real competition and real innovation. This competition is why DeFi will kill the retail bank. If I can get 15% APR in my favorite DeFi savings decentralized application, why would I ever keep my money in a bank?

With opportunities come threats

But right now, all is not well in DeFi. To date, DeFi on Ethereum has seen over $285 million in hacks, rewards are unfairly shared, and Ethereum continues to be congested and expensive to use.

The trust model of DeFi is code, not humans. The community is essential to the success of any ecosystem. To win, a platform must never get congested — no matter how many people are using it.

Related: Smart contract exploits are more ethical than hacking… or not?

We need a decentralized network where developers can build quickly without the constant threat of exploits and hacks, where every improvement will get rewarded, and where scale will never be a bottleneck. Because only then can the retail banks be slain and we get to see what great consumer finance truly looks like.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Piers Ridyard is the CEO of Radix DLT, a secure decentralized network. Piers also founded and exited Surematics, a YCombinator company, and was mining on the genesis block of Ethereum in July 2015. Piers graduated from the University of Manchester and the University of Law and has a CFA level 1.



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Colombian capital supports blockchain and emerging tech with $2.3M fund

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Colombia’s capital of Bogotá is funding blockchain development as part of the city’s broader investment in innovative technologies.

According to a Monday announcement on the city of Bogotá’s official website, the municipal government will provide 8.8 billion Colombian pesos ($2.3 million) to local companies as part of four new programs in the city’s Innovation, Technology and Creative Industries Fund, or FITIC.

The new funding includes a contribution of of 2.8 billion pesos, ($739,000) to the development of local blockchain startups through a program called “Hub Blockchain Bogotá.” The project aims to support 100 blockchain-focused companies in order to boost their competitiveness on the global market and provide tech advice for implementing blockchain within participating companies.

The new innovation funding campaign is organized with support from the Superior Mayor of Bogotá, the District Secretariat for Economic Development, Jorge Tadeo Lozano University, state entrepreneurship body Innpulsa, and Singapore-based blockchain accelerator Tribe Accelerator.

Related: Colombia’s oldest commercial bank pilots crypto services

Bogotá Mayor Claudia Lopez took to Twitter on Monday to invite local businesses to apply for the program starting on June 25. “Each company will be able to receive from the FITIC from 10 to 50 million pesos in capital to be able to take their idea forward,” the mayor said.

Colombia has been actively exploring blockchain technology. Last August, the Colombian Ministry of Information Technology and Communications called on the public sector to adopt blockchain technology in payments, land registration, voting, data management, supply chain and others areas. Previously, Bogotá launched a series of free online courses on a broad spectrum of new technologies including blockchain.