Currently just a flashy idea, the digital dollar is competing with more prosaic but proven 20th-century methods for the job of getting stimulus funds to every U.S. resident.
That’s the takeaway from Thursday’s House Financial Services Committee (FSC) hearing, where witnesses advocated different solutions to the problem.
Making the case for an electronic greenback was J. Christopher Giancarlo, former chairman of the Commodity Futures Trading Commission (CFTC), now a director with the Digital Dollar Project.
As he has in the past, he argued tokenization is a way to future-proof the dollar. Other countries, including China, are working to digitize their currencies, he noted. If the U.S. wants to maintain its leadership role in the global financial system, it too should take on this task, he told lawmakers.
While Giancarlo previously cautioned a digital dollar should not be “cobbled together” during a crisis, he suggested at the hearing that laying the groundwork should be part of the response to the downturn caused by COVID-19.
“Nothing reveals the limits of our accounts-based financial system more strongly than the current COVID-19 pandemic, when tens of millions of Americans are waiting a month or more to receive payments by paperchecks,” he said.
“We need to start exploring the next level of technology side by side with the existing accounts-based technology, if for nothing else to build greater redundancies in the system but also greater optionality and more tools in our toolbox to use in crises like this,” he added.
But other witnesses kept the focus on the urgency of making stimulus payments quickly to those in need. One round of paper checks has gone out to individuals who filed taxes in the last two years, but many are still waiting for their stimulus dollars.
“The point I just wanted to drive home [is] we are still in the midst of a crisis and [as] others on the panel said really eloquently, people are suffering today,” said Jodie Kelley, CEO of the Electronic Transactions Association.
“So I wanted to make sure that we recognize the only way to do that is with the tools that we have now,” she said.
The success of prepaid debit cards and peer-to-peer applications like PayPal and Venmo show they can be used to quickly distribute stimulus dollars to those in need, argued Kelley, whose member companies process more than $8.5 trillion in payments annually.
“The prepaid debit cards in particular are a preferred way to make payments to lower-income people. They are simple to use and don’t require a mobile phone,” she told CoinDesk after the hearing.
As for using blockchain, Mehrsa Baradaran, a Professor of Law at the University of California Irvine School of Law, said the discussion of that technology is premature.
“How do we get people to meet people where they’re at and make sure our solutions match the problem?” she asked lawmakers. “The problem here is the banking deserts, it’s the unbanked and underbanked, and we have technology to meet those people and I think that’s critical at this juncture.”
Baradaran advocated a different, more feasible strategy (at least technologically, if not politically): using the U.S. Postal Service to create local bank branches in partnership with the Federal Reserve.
“We need to close this cash-digital divide first,” Baradaran said.
Non-tokenized digital dollars could also be easily set up, said Morgan Ricks, a Professor of Law at Vanderbilt University School of Law. Ricks has long touted the concept of a FedAccount, a bank account essentially offered by the Federal Reserve for consumers to have direct access.
Setting up FedAccounts should be fairly straightforward and easy to accomplish, he told lawmakers: The Fed already offers these services to banks, large financial institutions and government entities.
“The Fed itself has been processing real-time instant payments for many many decades through the FedWire system,” he said. “The Fed has been opening accounts on its own books since its inception … retail operations are a different matter.”
The Fed could even contract out certain tasks until it has built up its own internal infrastructure, he said.
‘Starting a journey’
A large portion of the hearing focused on the tokenized dollar concept, with Rep. Patrick McHenry (R-NC) asking Giancarlo to walk him through how it might aid financial inclusion and subsidy distribution.
In the former regulator’s view, a tokenized dollar could be a way to provide banking services to those who lack them. Here, broadband access is the largest issue that would need to be addressed, he said.
A lack of banking access is “not insurmountable,” if residents of areas underserved by financial institutions have broadband access, Giancarlo said.
The digital dollar “is about on-ramps into the financial system, and making them as simple and accessible as possible,” he said. While he acknowledged that access to mobile devices might be another barrier, he said solving this would make the question of financial inclusion much easier.
Focusing on providing mobile access and a tokenized dollar rather than an expansion of existing banking services, might attract more individuals to the new system, he said.
“There are populations…with folks that are just outside the banking system but are comfortable with bearer instruments,” he said.
Prior to the hearing, Digital Dollar Project director and Accenture manager David Treat told CoinDesk he was encouraged the conversation was happening at all.
He said he expected some stakeholders might only be comfortable with incremental changes to the financial system right now.
“I think we’re at an inflection point now where we’re starting on a journey of modernizing money for our digital world and I think we will all benefit if we collectively recognize that [the] journey will have multiple waves of innovation,” Treat said.
The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.
Top 10 Blockchain-as-a-Service (BaaS) Providers
BaaS or Blockchain-as-a-Service is a paid blockchain-based cloud service that blockchain companies provide to customers. BaaS provides customers with the ability to build, host, and use their own blockchain apps, smart contracts, and any other digital services on a distributed network.
It is important to clarify that the BaaS concept is derived from the concept of SaaS (Software as a service) and works similarly to it.
How does BaaS work?
According to the BaaS concept, blockchain companies install, manage, and maintain, blockchain-based cloud platforms in addition to providing the tools necessary to build blockchain applications to customers in return for a fee.
The future of the BaaS industry
Currently, the global revenue from blockchain services is estimated at $ 2.5 billion and by 2025 this number is expected to rise to $ 19.9 billion.
Overall, the business value of blockchain solutions will increase to more than $ 360 billion by 2026, with estimates of this number reaching $ 3 trillion by 2030.
The previous figures clearly show the future of the industry as well as explain the huge and successive investments in the blockchain business in general.
Advantages of using the BaaS model
The BaaS model provides its users with many advantages, most notably high data security, efficiency, scalability, unlimited customization potential, as well as it is compatible with current cloud services.
In addition to the above, the adoption of the BaaS model reduces administrative burdens and provides better management and recruitment of resources.
Moreover, the BaaS model is easy to use and affordable, given the value it offers.
BaaS vs owning a blockchain-based cloud platform
The BaaS model is a better solution for business than having a blockchain-based cloud platform in all aspects. Owning a blockchain-based cloud platform is hugely costly due to start-up costs (infrastructure, personnel, software, licensing, hardware, consulting, and more), retirement costs (decommissioning of server racks), and operational costs (monitoring, cost per transactions, bandwidth expenses).
In addition to the above, owning a blockchain model means fully assuming administrative responsibilities.
While in the BaaS model, the cost is significantly lower because you only pay for the service you get. The service price in the BaaS model is subject to several factors, including the transaction rate, the maximum number of concurrent transactions, the payload size on transactions, and so on.
Also, in the BaaS model, all administrative burdens are borne by the provider.
How to choose the right BaaS provider?
There are a number of points to consider when selecting a BaaS provider. For instance, the provider’s experience and reputation, the security of the platform, the technical support as well as the ease of use and pricing.
In addition, it must be ensured that the platform integrates with the existing operating systems and software.
It should also ensure that the platform supports smart contract integration and deployment, identity access management (IAM) system, different runtimes, and frameworks.
Top 10 Blockchain-as-a-Service (BaaS) Providers
Blockwell is one of the world’s leading providers of blockchain solutions to governments, enterprises, and end-consumers. Founded in 2018 by experts who have contributed for 20 years in developing emerging technologies for some of the largest companies in the world.
Blockwell aims to assist organizations in adopting blockchain solutions by providing consulting and a cloud blockchain platform in addition to a distinct and diverse set of tools and programs.
Blockwell aims to help everyone generate profits by allowing them to build and expand blockchain tools, services, and products.
Currently, content creators rely on existing toolkits developed by Blockwell, set their own commission structures, and earn percentages as they sell and promote their tools around the world.
During the past two years, Blockwell has developed blockchain solutions for cryptocurrency businesses around the world.
In addition, Blockwell has vetted dozens of token contracts for some of the most popular exchanges in the world, prevented and stopped hacks saving individuals millions of dollars, built successful token-swaps tools, and analytics tools.
Blockwell’s previous work includes the names of many well-known businesses such as JPMorgan Chase Bank, Wells Fargo, Disney, GoPro, Paramount, Mattel, Universal, Lucas Arts, Suzuki, Epson, Time Warner Cable, Guitar Center, Beachbody, Marriott, Jaiyen Eco-Resort and more.
Blockwell has an impressive list of tools and applications. Notable among them are Blockwell Wallet, Pride Token, Fire Tokens, EgoCoins, iBlockwell, Blockwell Book, Sheets-n-Blocks – Blockchain, Contract Tool, VoteBlock, API Miner, Smart License Creator, Blockwell Prime, Listener, Token Swapper, Blockwell Daico, Blockwell Telescope, Blockwell Spyglass, Blockwell Velvet, Blockwell KYC Form Builder, Non-Fungible Token Creator, BW, and Dumbapps.
In addition to apps and tools, Blockwell has launched a store for DApps named “Well Spring” that has 16 working apps so far.
Blockwell backed tokens are valued at over $ 80M.
Regarding the future, Blockwell is seeking to expand by investing $ 10M. The company plans to obtain it by selling 100MM tokens to investors.
Amazon introduced its BAAS service called “Amazon Managed Blockchain” in 2018 through its cloud arm, Amazon Web Services (AWS). Amazon Managed Blockchain is a managed service that makes it easy to create and manage scalable blockchain networks using open source frameworks including Ethereum and Hyperledger Fabric.
Moreover, Amazon allows customers who want to manage their own network to go ahead, but it is an option that needs experience in dealing with AWS Blockchain Templates.
Amazon also enables companies to integrate their blockchain-based networks and business processes to improve IT infrastructure, business processes, human resources, financial transactions, and supply chains.
In addition to the above, Amazon provides AWS Key Management Service to secure Hyperledger Fabric’s CA (Certificate Authority) and Amazon QLDB technology to manage augmented ordering service.
The BAAS offer from Amazon is characterized by flexibility in identifying resources to suit companies’ needs.
Amazon customers’ list includes star names like Nestlé, BMW, Accenture, Sony Music Japan, and the Singapore Exchange.
IBM is one of the world’s most important BaaS service providers. Forbes selected it among the top 50 blockchain companies, thanks to its blockchain platform “IBM Blockchain“, which it launched in 2017.
IBM Blockchain is a fully-integrated distributed ledger technology platform that enables businesses to “’develop, govern, and operate a blockchain ecosystem quickly and cost-effectively on a flexible, cloud-based platform by using Kubernetes.
Partnerships have been vital to IBM’s continuous BaaS expansion. it created the Trust Your Supplier platform alongside blockchain firm Chainyard and also pioneered the Contingent Labor platform in conjunction with IT People.
As well as IBM Blockchain has joined The Linux Foundation’s Hyperledger Project to evolve and improve upon earlier forms of blockchain. Instead of having a blockchain that is reliant on the exchange of cryptocurrencies with anonymous users on a public network (e.g. Bitcoin), a blockchain for business provides a licensed network, with known identities, without the need for cryptocurrencies.
IBM Blockchain Platform has been used widely in industries such as food supply, media, advertising, and trade finance.
Microsoft is one of the oldest BaaS service providers as it has been in the market since 2015 when it launched Azure Blockchain Service.
Microsoft aims through its BaaS service to enable users to build public, private, and consortium blockchain environments with industry-grade frameworks and bring their blockchain apps to market.
Microsoft provides three products to customers: Azure Blockchain Service, Azure Blockchain Workbench, and Azure Blockchain Development Kit.
Azure is compatible with other Microsoft products such as Logic Apps and Flow, making it a great choice for organizations looking to harness blockchain such as General Electric and T-Mobile.
Microsoft Azure’s most prominent features are the support of several Blockchain frameworks, including Quorum, Corda, Hyperledger Fabric, and Ethereum. Plus, ease of deployment using Azure CLI, Azure Portal, or Visual Studio Code with the Azure Blockchain extension. Azure also supports full monitoring and logging.
The above helped Microsoft to forge important partnerships with prominent entities such as its partnerships with Ripple and BitPay.
Alibaba is one of the leading blockchain solutions providers around the world. The well-known Chinese company introduced its BaaS service in 2018 through its cloud platform.
Alibaba has an active research team and has registered many patents on blockchain during the past period.
Utilizing Quorum, Hyperledger Fabric, and the Ant Blockchain, the platform integrates Alibaba Cloud’s Internet of Things (IoT) and anti-counterfeiting technologies to create blockchain solutions for product traceability.
Alibaba’s BaaS offering provides diverse solutions to meet user needs including encompasses enterprise-level BaaS services, an agile BaaS platform that supports private deployment, and specific blockchain solutions for container services.
Software giant Oracle unveiled its BaaS service in 2017. The service, called “Oracle Blockchain Cloud Service”, aims to provide an enterprise-grade distributed ledger platform that can help businesses to “increase trust and provide agility in transactions across their business networks.”
Oracle enables its service users to provide permissioned blockchain networks for private or consortia models, enroll member organizations, and run smart contracts to update and query the ledger in addition to many other benefits.
Also, Oracle enables its service users to use its other solutions such as Oracle Supply Chain Management (SCM) Cloud, Oracle Enterprise Resource Planning (ERP) Cloud, and other Oracle cloud solutions.
R3 launched its BaaS service called “Corda” to enable companies to transact directly and privately using smart contracts.
Corda is an open-source blockchain platform that works on minimizes blockchain nodes’ deployment time by a few minutes, allowing enterprises to host the Corda network in a few clicks.
Interoperability, security, and privacy are the foundations of the finance-focused Corda.
Royal Dutch Airlines (KLM) recently hired Corda service to streamline financial processes and enhance settlements
Corda provides users with the following benefits: Easy cloud-based deployment and quick setup of nodes with Docker, a Built-in blockchain application firewall to provide additional security, as well as R3’s Interoperability feature that allows developers to work with more than one application at the same time.
It is worth noting that R3 has developed solutions for more than 300 clients in addition that it has partnerships with many prestigious institutions such as Barclays, Credit Suisse, Goldman Sachs, J.P. Morgan, and Royal Bank of Scotland, Bank of America and Wells Fargo, and more.
SAP launched its BaaS service “Leonardo” in 2017. Through its service, SAP aims to help companies transition into the digital age through the use of distributed ledger technology.
Leonardo is a Hyperledger based service and resides in the SAP Cloud service, meaning it can be accessed from any device.
The platform provides plug-and-play blockchain solutions and allows for the easy setup and hosting of blockchain nodes.
SAP Leonardo functions as a blockchain cloud service, machine learning service, and supports the Internet of Things (IoT) in a single ecosystem.
SAP Leonardo provides its users with several benefits such as cloud deployment, monitoring of blockchain data in real-time, and more.
Well-known Chinese smartphone manufacturer Huawei launched its BaaS service in 2018. The service, called “BCS“, is based on Linux Foundation’s Hyperledger Fabric, a blockchain framework that allows components, such as consensus and membership services, to be plug-and-play.
With its BaaS service, Huawei aims to enable companies to develop smart contracts on top of a blockchain network for several use-case scenarios.
Huawei also works with enterprise customers to promote the deployment of blockchain solutions and applications and to build reliable, public infrastructure, and an ecosystem-based on blockchain and shared success.
According to Huawei, BCS enables enterprises to deploy blockchain technology within five minutes. It concentrates on nine application scenarios, including data assets, Internet of Things (IoT), operation, identity verification, data certification, data transactions, new energy, philanthropic donations, and inclusive finance.
Huawei has many and varied partnerships inside and outside the Chinese market, but the most prominent name remains the famous car manufacturer Honda.
Factom launched its BaaS service in 2017. The service, called “Factom Harmony“, aims to allow enterprises and software vendors to quickly add blockchain capabilities to any application or workflow using simple API calls.
Harmony also aims to enable users to create portable, archivable cryptographic proofs to use as trusted inputs for internal and external audits.
What sets Factom Harmony apart is that it reduces the time and resource requirements to perform audits and meet compliance objectives.
Author: Husayn Hashim
Bio: Husayn Hashim works as an author and programmer. He has been writing about blockchain technology and cryptocurrencies for si years. He’s interested in programming, technology, finance, and business. He loves writing and loves to share his knowledge with others.
U.S. crypto exchanges have a plan for the travel rule. Now they just have to get along
- A working group of 25 U.S.-based exchanges released a white paper this week outlining their platform to comply with FATF’s travel rule.
- The group includes some of the most prominent exchanges stateside, suggesting that the plan has legs.
- Now, the group has to develop a governance structure.
Exploring the current state of cryptocurrency taxation in the European Union
- By now, guidelines for taxation of cryptocurrency activities exist in most EU member countries. However, grey areas remain.
- Highly favorable tax treatments in some, and lack of taxation in other EU member countries enables regulatory arbitrage.
Top 10 Blockchain-as-a-Service (BaaS) Providers
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