Where finance meets technology, interesting things continue to happen.
Recent fintech news stories have shown us that organisations across the world are giving more attention to cryptocurrencies and blockchain – from HMRC to the World Economic Forum to the Monetary Authority of Singapore – and to their impact, not just for businesses but socially. For people with an interest (or a stake) in the crypto world, there is an interesting year – not to mention decade – to look forward to.
Sweden: cash and caution
At the start of 2020, a fascinating law was introduced in Sweden to ensure institutions continue to provide cash services. The adoption of alternative payment methods in this particularly tech-savvy country has certainly been fast.
The new law is designed to protect those suffering mental disabilities, the elderly, and people who live in rural areas. All of these are more reliant on cash to survive.
As contactless and mobile payments become ever more prevalent in the UK, these are issues we may face in the not too distant future.
Unfortunately, rough sleepers are an all too familiar sight for many of us, especially those of us who live or work in London. The vulnerable situation that they are in would certainly be made worse by cash disappearing. More work needs to be done here to tackle this before it gets worse.
World Economic Forum, blockchain and social impact
We are pleased to see the World Economic Forum (WEF) committed to blockchain projects that have a social good. In this article from their Annual Meeting, the WEF considers blockchain opportunities that lie ahead in 2020.
Giving makes us feel good, and the feeling is heightened when we can see the impact of that gift. Therefore when giving to large charities that are somewhat like corporates, it is harder to see how our individual donation can actually make a difference.
Blockchain technology would allow the tracking of a donation to see exactly how it was spent. The real difference each donation makes could then be seen.
We’ve also been wondering to what extent the same principle could apply to tax payments. If an individual could see how their payment had funded the NHS, schools, police force, pensions etc then that would be a powerful thing, and perhaps encourage governments not to be dishonest!
HMRC and cryptoasset tracking
It looks like HMRC is now exploring blockchain analysis options to allow it to trace suspicious transactions and potential tax evasion, judging by this contract procurement page for ‘provision of a tool that will support intelligence gathering methods to identify and cluster cryptoasset transactions into linked transactions and identify those linked to cryptoasset service providers.’
This is surely another step towards a central bank issuing a currency on blockchain, which would have so many advantages.
It’s not all about monitoring and capturing tax, however. There would be live accurate data on how sectors are performing and contracting, as well as who is lending, borrowing, investing etc.
That would be incredibly valuable when assessing the health of an industry or the economy as a whole. The information would facilitate better policy decision-making and assessment of any impact of policy changes.
Cryptocurrency regulation in Singapore
Singapore has introduced the Payment Services Act, giving global cryptocurrency businesses the opportunity to apply for operating licenses in the country for the first time.
From our experience of cryptocurrency and blockchain businesses, it’s our opinion that regulation would encourage adoption and innovation in the crypto world.
Institutions are looking for clarity and parameters within which to work, whilst consumers need protection. Only then will crypto be able to truly break through in the payments sector.
For us, this is excellently summed up by Sherry Goh, general manager at crypto firm Luno, which operates in Singapore already:
“[The Payment Services Act] provides regulatory certainty to industry players but, more importantly, it provides consumers with a clear sense of the players they can trust.”
It will be interesting to see how the larger and more well known exchanges, such as Binance, react to this new legislation.
For more on how we can help fintech businesses, take a look at our fintech page or contact us using our enquiry form.
You can also read our previous fintech news roundup here.
