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New WEF study reveals issues facing blockchain and crypto standards

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A study conducted by the World Economic Forum and Global Blockchain Business Council reveals the reasons why the blockchain industry still lacks well-defined standards on the global level.

Dubbed the Global Standards Mapping Initiative, the study notes that the gaps, divergence and overlap in the standard-setting landscape of the blockchain industry are the biggest challenges the industry needs to surmount.

Most organizations involved in setting standards for the industry have shown immense interest in some specific areas while completely neglecting the others. This creates an overlap in some sections of the blockchain industry while leaving a gap in the standardization of the other parts. 

The interest and volume of activity around setting standards have also varied with the hype around the technology. Many organizations that set out to establish standards during the peak of the blockchain hype have either shut operations or are yet to produce any reasonable outputs.

According to the report, the five most common spheres that experience an overlap of interest include security, Internet of Things, identity, DLT requirements and DLT terminology.

Even though there’s huge interest in setting the standards for DLT terminology, the study points out that the blockchain terminology across the globe remains uncertain. Consistent definitions and terminologies for the blockchain industry are key to growing the industry, the report notes.

The study suggests that the blockchain industry still lacks the standards that may formally define the suitability of blockchain technology for specific processes. Setting global standards for the same may help more players assess the potential of the technology for their business and know the benefits and possible risks associated with it.

There are also no formal standards that define the procedure to test blockchain platforms. Most of the innovation in the industry has so far happened through industry players and technical evolution, rather than through formalization and standardization, the report states.

As a way forward, the report suggests that regulators should educate themselves on the technology before setting national or global standards. The report mentions that “the effectiveness of standards will ultimately come down to how well the technology is understood.”

Organizations and regulatory bodies running siloed operations to set blockchain standards have also resulted in much of the confusion. The study emphasizes that it is crucial to break through these siloed organizations and geographical barriers will “facilitate more functional frameworks.”



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In China, most blockchain R&D funds are going toward this segment

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A report published by Securities Daily explained how China’s publicly-listed companies spend the millions they have allocated toward blockchain R&D. The study surveyed 23 companies in China who began working with blockchain back in 2016. Figures suggest that companies allocate an average 20% of their annual revenues toward such purposes. The majority of these funds are spent to further government-related solutions.

The report highlighted that Yuanguang Software, an enterprise software provider, have increased their related research spending by around $24.3 million since 2016. Other companies, such as Xinchen Technology, have actively spent funds on blockchain-related government research projects in an effort to strengthen the nation’s financial sector.

Chen Xiaohua, the chairman of the China Mobile Communications Federation’s Blockchain Professional Committee, commented on how blockchain interest has grown amongst publicly-listed Chinese companies:

“Listed companies can use blockchain technology to improve their products on the one hand. Awareness and brand promotion, on the other hand, use blockchain technology to improve its own technological level, break the structural constraints of the traditional Internet model, and an in-depth layout of the digital economy.”

According to a report titled “2020 Blockchain Industry Development”, Chinese companies have applied for 4,435 blockchain patents — over half of all global blockchain patents. This surge in interest followed Chinese president Xi Jinping’s endorsement of the industry.



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An encryption study revealed a surprising fact about blockchain adoption in Mexico

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A report called “Encryption Trends in Mexico 2020/2021” surveyed a total of 353 representatives from companies throughout Mexico.

The study, published by privacy research center the Ponemon Institute, indicated that 40% of the Mexican companies surveyed were looking to adopt blockchain and cryptocurrencies in some form. Out of this segment, 71% were focused specifically on crypto usage.

The figures also showed that 51% of these companies were intent on implementing blockchain for asset management and transaction handling purposes, while 37% expressed an interest in the implementation of smart contracts. Many of these companies could ultimately use blockchain to improve their security systems and guarantee proper encryption processes, the study said.

Though Mexico is not often viewed as a major blockchain player on a global scale, the country has played an active and ongoing role in terms of adoption. In September, Mexico announced plans to enable a blockchain-based electronic voting system for certain citizens residing abroad. The county aims to make this available in time for its 2021 election cycle.

Cointelegraph Spanish reported in August that Mexican companies had raised over $1.3 billion in the fintech sector. Part of these funds went toward blockchain technology development within the country.



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With job listing, Canada’s central bank takes additional steps towards a CBDC

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The Bank of Canada is looking to hire an economist who has a deep knowledge of financial technology and digital currencies, potentially signaling the latest in a series of steps towards a Canadian Central Bank Digital Currency (CBDC). 

According to the bank’s official page, the economist’s duties will be to monitor and analyze the latest developments related to electronic funds and payments, implement research projects, prepare analytical notes, and work on the “potential development of a CBDC.”

The Bank has defined a set of requirements that the applicant must meet, among which are an in-depth knowledge of Bitcoin, Ethereum, and other major cryptocurrency platforms, as well as familiarity with traditional payments systems like card networks, merchant acquirers, and point of sale technologies. 

The applicant must also have experience in handling and analyzing public blockchain data and analyzing consumer survey data.

Oct. 25th, 2020 is the deadline for receiving applications.

The Deputy Governor of the Central Bank of Canada, Timothy Lane, has recently called on central banks worldwide to issue their own digital currencies, highlighting their importance for the economy in light of the Covid-19 pandemic. At the Central Bank Payments Conference Lane also said that Canada’s CBDC development was progressing at “a good pace.”

In laying the foundation for a CBDC, the Bank joins the Bank of England, the U.S. Federal Reserve and the Bank of Japan, among others, who have also begun conducting research into the viability of CBDCs. 



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