LG 189

“
If Luxembourg could build a financial services market
place with ambient accountability provided by the shared
ledger then you introduce a radical transparency
”
are a lot of complexities in business that we
perfect audit database. Having transparent
need to be able to make compatible with
records that banks can show to regulators.
blockchain technology.”
Some of the other benefits might be around
Birch sees the big opportunity from shared
costs,” adds Taylor.
Dave Birch, Director, Consult Hyperion
“That creates barriers to entry, as opposed to
apublic open protocol, so the technology is
ledgers as not in the areas where people
commonly focus such as payments. He believes
the technology that ensures a consistent
worldview and gives an integrity to transac-
Harnessing blockchain technology in
Luxembourg
now being deployed in effect to protect
tions has a much more important impact.
incumbents, and prevent new financial start-
“This technology could introduce a radical
For financial centres like Luxembourg, which
ups from entering into the ecosystem”, he
transparency into financial markets and we
prides itself on regulatory innovation, block-
says. “Additionally, private blockchains have
all know that a lack of transparency has been
chain technology could lead to a new type of
the ability to block, reverse and alter transac-
one of the key problems in the previous
financial business in Luxembourg.
tions, so how is anything created there in the
financial crisis because nobody could unders-
“For countries like Luxembourg there is
name of innovation different to the cartel-
tand what any positions were. The idea that
potential for a jurisdictional competition to
like system that we already have?”, adds
Icould look in this ledger and see that your
achieve better regulation, but at a lower
Matonis. “Just as in the early days of the
bank is solvent because I can see that those
cost, using these new technologies. One of
Internet, companies and consortia launched
assets exceed liabilities, even though I can-
the concepts that is coming around is the
private intranets, but they soon realised that
not read what those assets are, that’s a radi-
idea to create some kind of financial services
the true value of innovation required the
cal new way of doing things.”
passport so that if I come to Luxembourg, I
public Internet for global interoperability”.
go through stringent KYC, AML, CVC and
then I get a digital services passport which I
Blockchain tech takes off
Blockchain will radically alter the
future
can then use to get my accountant, lawyer,
and open a bank account,” says Birch.
“Ambient accountability is a key concept. If
Global analysis of FinTech venture funding
Last year, Coindesk reported that VCs plou-
Luxembourg could build a financial services
by KPMG and CB Insights reveals that VC
ghed a record one billion USD into bitcoin
market place with ambient accountability
investment in bitcoin and blockchain compa-
and blockchain-related start-ups. Banks are
provided by the shared ledger, so the envi-
nies jumped from three million USD in 2011
also investing heavily in-house as well as col-
ronment itself makes it accountable, where
to 474 million USD in 2015. Financial institu-
lectively as they seek to work out how best
you have this kind of a win-win-win because
tions and banks have focused on the pros-
to harness the technology.
the ledger is not just shared between custo-
pect that blockchain might overhaul their
“The big opportunity for me is looking at
mers and the banks but with the regulators
business models, but more research and
where you can have a customer benefit and
as well, then you introduce a radical transpa-
hands-on development is required.
take costs out of the organisation. Customer
rency which means the shared ledger can
“It is still early on, people want it now, but it is
benefits might be reducing the numbers of
create an entirely different category of solu-
probably where the Internet was in the 90s,”
pieces of paper you need to sign or need to
tion,” he says with a twinkle in his eye, “but
points out Taylor. “We need to think about
present to be able to open a bank account,
it might put all the auditors out of business.
things like, if everybody has a copy of everybody’s
data what does that mean for data privacy?
If everybody can see all the transactions
what can that mean for regulations, so there
move your savings or pension,” says Taylor,
named by Next Bank Europe as one of the
40 who´s who in FinTech. “The compliance
and the control benefits might be having the
And that’s a very interesting thought to play
with,” Birch concludes.
GM
Communiqué par Luxembourg for Finance
Photos ©Mike ZENARI
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LG - Juillet/Août 2016