Blockchain-Based Exchange Set to List First Company in June

SprinkleXchange, a blockchain-based stock exchange, is aiming to list its first company next month, according to a Bloomberg report.

The Bahrain-based trading platform is developed on Ethereum’s blockchain platform and uses its smart contracts feature for trade settlements.

According to the report, the exchange claims its blockchain-focused approach offers time and cost savings in comparison to traditional stock exchanges given that the exchange operates within a regulatory sandbox created by the Bahrain’s central bank and uses a decentralized clearing and settlement system that uses automation.

Currently, the exchange has been given permission to list a maximum of 10 companies. In addition to that, prices will be set using the Dutch auction method, with the exchange taking a 1% fee.

Apart from listing stocks from companies, the blockchain-based exchange will also offer trading options with digital currencies and, similar to other crypto exchanges, will operate around the clock for both stocks and digital assets. The exchange plans to add exchange-traded funds (ETFs) in the future.

The CEO has revealed as well that the platform is only approaching small-cap companies with a market cap between $20 million to $200 million across all sectors.

CEO Alexander Wallin, has revealed that the exchange is aiming to bring around 35 companies within the next 12 months and expecting to list 1,000 companies over the next 3 to 4 years. Wallin further added that:

We have the luxury of being first with this, but we’re aware that it will become a crowded market. It’s like moving from VHS to streaming; Netflix did it nicely and was first, but now there are lots of streaming sites.”

A number of traditional stock exchanges are currently moving to integrate blockchain tech in their platforms. For instance, Switzerland’s top stock exchange, SIX, is also planning to launch a blockchain-powered exchange platform later this year, which will be powered by blockchain consortium R3’s Corda Enterprise platform.

Meanwhile the Gibraltar Stock Exchange has recently started allowing the listing of tokenized securities. The Australian Securities Exchange is notably rebuilding its ageing CHESS settlement platform using blockchain tech provided by Digital Asset. Other stock exchanges, including in Jamaica, Thailand and Spain, have announced as well initiatives involving blockchain technology and crypto assets.

A Group of Banks Working on Digital Cash System Based on Blockchain

A slew of banks, including some of the largest in the world, are working together to develop a digital cash system that relies on blockchain technology to settle transactions. The total investment in the project is said to be close to $50 million.

According to a report from Reuters, citing “people familiar with the plans,” a list of unspecified banks is involved in the project.

The participating banks will be setting up a new entity called Fnality for the project, which could launch as early as 2020. Clearmatics seems to have filed a trademark application for the word “Fnality,” according to information from trademark service Justia Trademarks.

Previously known as the Utility Settlement Coin (USC), it was first proposed by Swiss bank UBS Group and technology startup Clearmatics in 2015. The aim of the project was to implement a more effective system for clearing and settlement in financial markets.

The utility settlement coin, which would likely be known as Fnality is one of the most ambitious projects, with investments of up to $50 from participating banks.

The coin would be a digital cash equivalent of central bank-backed currencies like the dollar or euro that would run on blockchain-based technology. Spending the digital coin would be the same as spending the fiat currency it is paired with.

According to the Reuters report, Bank of New York Mellon Corp, State Street Corp, Credit Suisse Group, Barclays, HSBC Holdings and Deutsche Bank are among the partners working on the project. The group of banks has previously said it had been in discussion with central banks and regulators to ensure the project’s structure was compliant.

A Barclays spokeswoman told Reuters:

“We are a member of the USC Project and can confirm that the Research & Development phase is coming to an end.”

The news comes soon after investment banking giant JPMorgan revealed its own cryptocurrency, dubbed JPM Coin, to settle some of its transactions between clients of its wholesale payments business in real time.

Blockstream Launches Security Token Platform

Blockchain infrastructure firm Blockstream has announced the launch of its security token platform – called Liquid Securities. The news was announced in a press release at CoinDesk’s Consensus conference 2019 on May 15th.

According to the release, the new Liquid Securities platform is presented as a solution for businesses to issue security tokens on the Liquid Network. It is the first product Blockstream has launched alongside with its Liquid Network sidechain.

Launched in October 2018, the Liquid sidechain is an auxiliary network built on Bitcoin, with the goal to enable low-fee, low-latency transfers between exchanges as well as offer better built-in privacy.  The announcement explains that the Liquid Network is a settlement network connecting cryptocurrency exchanges, market makers, brokers, and other financial institutions.

Blockstream has always promoted the potential for digital asset issuance on the sidechain, a possibility which has been now granted as Liquid Securities is joined by multi-blockchain issuance platform TokenSoft, investment platform BnkToTheFuture, United States-based bank Zenus Bank and game development studio Pixelmatic in a collaboration.

Blockstream Chief Security Officer Samson Mow has stated at the press conference that whilst businesses are willing to issue tokenized securities, he strongly believes that platforms such as Ethereum are not the right choice due to their scalability, privacy and reliability limitations. He further claimed that Blockstream’s platform would be better suited for such uses:

Now, with the launch of Liquid Securities, businesses can quickly issue Liquid-based security tokens with the click of a button, and establish sophisticated rulesets to conform to their regulatory requirements with no engineering experience required.”

The Liquid Securities platform will provide users with a graphical user interface where they can set the legislative criteria that their tokens must comply. This information is then integrated into smart contracts on the Liquid Network. In other words, token issuers don’t necessarily need any technical or programming know-how to issue a security token on Liquid Securities.

The platform comes with a variety of issuer controls for tailoring a token to each user’s specific use case. They can, for instance, choose to manage tokens through Liquid Securities’ API or outsource this job to one of Liquid’s partners if it’s too difficult.

This is big for Liquid, to move from something that is used by exchanges toward a more advanced financial network,” Allan Piscitello – director of product management at Blockstream – stated in an interview.

Piscitello further added that one of the benefits of Liquid Securities includes having an asset that is both verifiable and auditable but also private. When issuing a token on Liquid, a company can keep specific details (like supply, allocation, etc.) private whilst allowing a trusted third party to audit operations. This means that enterprises don’t have to trade off privacy for transparency to stay compliant with regulations, all while leveraging “one of the most secure blockchain networks in the world,” according to Piscitello.

HTC Will Release Mobile Device Capable of Running a Bitcoin Node

Taiwanese electronics company, HTC, has revealed recently that it will be releasing a new smartphone – The EXODUS 1s – that will include advanced blockchain capabilities. In addition to built-in key storage and wallets, the new smartphone will include a full Bitcoin node, allowing users to directly interact with the largest blockchain network just by using their phones.

Following this news, HTC marks the biggest step yet seeking to integrate mobile technology with blockchain technology and cryptocurrency.

According to the press release, Phil Chen – HTC’s first Decentralized Chief Officer – has explained that the full node capabilities integrated within the new phone will allow app developers new opportunities to connect directly to decentralized networks, which are more resistant to censorship and capable of giving users more control and privacy over their money and their identity.

Chen has stated that the new phone had been designed with the goal “empower the user.” Respectively, the EXODUS 1s will be the first smartphone to ever to have full node capabilities. He further noted:

 “We gave users the ability to own their own keys, and now we’ve gone one step further to allow users to run their own full node. We are democratizing access to the technology for a free world. Full nodes are the most important ingredient in the resilience of the Bitcoin network and we have lowered the barrier to entry for any person to run a node.

Running a full node is the only way Bitcoin (BTC) can be used in a trustless way. This way one can know for sure that all the rules of BTC are being followed; for instance, that no BTC are spent not belonging to the owner, that no coins were spent twice etc. Full nodes are currently the most private way to use BTC as well as the most secure as they do not suffer from many attacks that affect lightweight wallets.

At the moment, there are only about 9,000 active bitcoin full nodes verifying blockchain transactions. According to Chen, each node includes the entire bitcoin history going back to the first transaction and requires as much as 200 gigabytes of storage, increasing at a rate of about 60 gigabytes a year. The new device will support a lighter version of the full node that requires just 10 gigabytes of storage, however each phone will be equipped with an extra SD card designed to support complete full-node services. Notably, the full nodes do not enable bitcoin mining, however the company said it may happen in the future.

Similarly to the Exodus 1, the new phone comes with a built-in hardware wallet, known as the Zion Vault, which stores cryptocurrency keys in a trusted execution environment, thereby allowing users to easily own and spend cryptocurrencies without exposing them to malicious content.

In contrast to the original Exodus, the new version of the phone will enable developers to build a wide range of decentralized applications on top of Zion, which supports Bitcoin, Ether and Litecoin, using the newly open-sourced developer kit.

In addition to that, the 1s will include Qwant – an internet search engine that doesn’t track searches or filter results, and like its predecessor, it will offer a social key-recovery system that doesn’t rely on a bank or other central authority.

The new device is expected to launch by third quarter, and whilst it has yet to be confirmed, the price will range between $250- $300. Customers can purchase the phone with Bitcoin, Ether, Litecoin or other supported currencies.

Malta’s Registry of Companies to Use Blockchain-Based System

According to local news reported on May 8th, Malta’s Registry of Companies is going to operate on a blockchain-powered system from now.

The Registry of Companies is a public registry holding official information and documentation pertaining to new and existing companies. At the end of last year, the agency established itself as an independent from the Malta Financial Services Authority’s (MFSA).

Now, the registry is seeking out a new method of organizing and documenting their information, as they plan to use a blockchain-based system. The act of demerging from the MFSA and becoming an independent establishment will lead to strengthening the internal management structure of the data.

Silvio Schembri – Secretary of the Parliamentary Secretary for Financial Services, Digital Economy, and Innovation – stated that the use of blockchain technology will provide greater efficiency, while “lessen[ing] unnecessary bureaucratic procedures.”

He further added that the agency will operate on a new system, which will handle all of the processes executed by the Registry of Companies. He noted that with the new system in place, new services will be provided, which was not possible before as this is the first agency in the world to be run on a blockchain based system.

In addition to that, Silvio Schembri has noted that the new premises will form an integral part of Malta’s technological and innovative activity.

“While previous administration disregarded the South of Malta, this administration sought to exploit the potential of this area by bringing commercial activity to the part for the benefit of all,” said the Parliamentary Secretary.

The Registry of Companies will be located in Zejtun together with the International Taxation Unit, Tech.MT Foundation, Finance Malta and Gaming Malta.

Last December, Malta together with seven other southern European Union member states, released a declaration encouraging the use of Distributed Ledger Technology’s (DLT) within the region. The declaration outlines several industries such as education, transport, mobility, shipping, Land Registry, customs, company registry, and healthcare, which can benefit and improve from implementing blockchain technology.

Meanwhile, the International Monetary Fund (IMF) stated that the growth of blockchain in Malta had created significant risks of money laundering and terrorism financing in the island’s economy. Subsequently, the IMF had issued several recommendations to the authorities such as applying more sanctions and gaining a better understanding of possible risks and regulatory breaches that come with blockchain technology.

Despite that, the Prime Minister of Malta has voiced a positive stance regarding the fintech and has argued that there is a potential for corporate, political, and civic systems to benefit from blockchains implementation, adding that it could ultimately solve “decades-old problems.” He further claimed that this potential is what drove the country to “launch itself as a Blockchain Island,” stating that the island became “the first jurisdiction worldwide to regulate [the] technology.”