There is absolutely no doubt that U.S is the biggest crypto market of the World, but the continued confusion of the regulatory authorities on how to deal with Cryptocurrencies & blockchain based businesses, has pushed the innovation spirit to seek friendlier jurisdictions to blossom. Places like island of Malta & Singapore have become a safe haven for these businesses, however, some recent developments have shown that major countries are finally coming around as well. The passing of a comprehensive regulatory framework by the French authorities is one such step in that direction. I think they are realizing the fact that is you can’t stop the propagation of the emerging tech… might as well join it!
While U.S struggles on how to solve the regulatory puzzle around Cryptocurrencies, up north in my country, Canada, it is a different story. According to Don Tapscott, noted Canadian blockchain thought leader, Canada’s economic progress is being fueled by the blockchain technology. His report on The Blockchain Corridor: Building an Innovation Economy in the 2nd Era of the Internet – highlights the fact that internet of value has been created by the advent of DLT technology. The report also suggests that Canada is emerging as the major global tech hub. The availability of the right pool of diverse talent, top-notch education & research facilities, high-speed Internet access & a permissive government has positioned Canada as one of the leaders in the emerging blockchain economy. Vitalik Buterin (Co-Founder Ethereum) & Changpeng Zhao (CEO Binance) are two of the most glaring examples of the home-grown talent that Canada has produced.
Working on the same lines Don & his son Alex Tapscott created The Blockchain Research Institute – whose main goal is to provide public-private collaborative platform by pooling in resources & finding the best possible route towards blockchain-based ecosystems. BRI has garnered significant support & funding from the Canadian federal government, Provincial Ontario government & the City of Toronto. Since the creation of BRI, Canada has made significant strides in assimilating the technology in the domestic ecosystems. Canada has the 10th largest Crypto trading population in the world while hosting the second highest number of Crypto ATMs. But what makes it stand out is the progressive attitude that it was shown towards embracing & adopting the DLT and the associated Cryptocurrencies. Let’s see how things have progressed so far.
Cross border settlement system
Project Jasper is a Public-Private initiative to understand how the DLT system works & how its potential could be utilized in real life payment settlement scenarios. The Project which is a collaborative research initiative between the Bank of Canada (BoC), Payments Canada, TMX Group & Accenture started was conceived back in 2016 to study & eventually implement the DLT to transform the wholesale payment settlement system. Project Ubin which was initiated by The Monetary Authority of Singapore (MAS) in collaboration with R3 blockchain consortium & JP Morgan, with similar goals to Jasper has just completed their first collaborative cross border digital payment transfer. The transaction was made possible by linking both the DLT systems as MAS sent digital money to BoC without the interaction of any third-party. Finally, we are beginning to see projects roll out from the theoretical stage to something more tangible. Various other blockchain-based payment systems are in different stages of development around the globe & should see the light of day sooner than later.
Digital Identity system
As reported recently by Bloomberg, Canada has just taken a big leap in the identity verification of consumers by employing blockchain technology. Five major banks of the Canadian Financial system namely – Royal Bank of Canada, Toronto-Dominion Bank, Bank of Nova Scotia, Canadian Imperial Bank of Commerce and Desjardins Group have signed up the services of SecureKey – a leading identity and authentication provider, which simplifies the process of user identification with its privacy enhanced Verified.Me digital identity system. The first ever digital identity network in Canada is built on the IBM blockchain with Linux Foundation’s open source Hyperledger Fabric platform. More importantly, this move marks a major move towards open banking systems where customers can willingly share their data with other companies. Data in the hands of the owners is now becoming a reality.
Coinsqaure — Canada’s premiere Cryptocurrency exchange which was formed in 2014 has announced the creation of Canadian dollar pegged stable coin dubbed as eCAD. As per the announcement, eCAD will provide the Canadian and global markets the stability of the Canadian dollar with the benefits of a digital currency. And as with any fiat-pegged stable coin investors can swap eCAD with CAD dollar on a 1:1 basis. While the Central bank of Canada is still weighing the merits of issuing a digital currency, Coinsquare is promising to offer a reliable digital asset to global investors who are looking to invest in the Canadian market. The new stable coin would act as a store & transfer of value while acting as an alternative to plethora of U.S backed stable coins. On the side note, TrustToken, the developer of the TrueUSD stable coin has announced the creation of TrueCAD after recently rolling out TrueGBP. All the stable coins will be backed by their respective fiat currencies.
Relatively cheap & reliable electricity is the number one priority for Bitcoin miners, with preferred colder climate – Well, Canada provides both, which makes it a popular destination for digital miners. Toronto’s Hut Eight proclaiming itself to be Canada’s largest miner; operates one such facility in Drumheller of Alberta Province. Similar facilities have cropped up around the country in other Canadian Provinces of Quebec, Manitoba & British Columbia. Vancouver based DMG Blockchain solutions distinguishes itself by providing MaaS (Mining-as-a-Service), HyperBlock & HIVE are examples of some of the other big players based out of Canada in the digital mining business. Crypto mining has taken a hit lately with the extended bear market, but things are looking up again with the sustained bounce in the market price of the digital coins.
Local digital currency
This is not exactly a Crypto/blockchain-based product but has been certainly inspired by the DLT movement. I wrote about this back in Dec. 2018 about how localized Digital Calgary Dollar was created. The new digital currency is a successor to the “Calgary Dollar“ which has been in existence since 1996 and being used alongside the Federally controlled Canadian Dollar to create a value chain for the local economy that stays within the domestic ecosystem. The re-branded digital version of the original local currency works via a smartphone App which is available for both iPhones & Android devices. The App lists shops, restaurants & all business outlets where you are able to transact with your Calgary digital dollars.
Research & Innovation
I also wrote in March about how a small town community of Innisfil, Ontario has not only entered into a partnership the ride-hailing company Uber to create an alternative to the traditional Public transit system, but more recently decided to accept cryptocurrency payments (starting with bitcoin) for property taxes via the Toronto-based digital assets platform Coinberry Pay. However, more important innovation news came from the University of Waterloo researchers, when they revealed that they have been able to increase the scalability of Hyperledger Fabric – one of the most popular enterprise blockchain platforms with more than 500 applications at various stages of development. The announcement detailed that the current processing of 2000-3000 TPS of the platform can be bumped up to you 20,000 TPS. Several architectural optimizations recommended to achieve this don’t hamper the API (Application Programming Interface) or the functioning of the Hyperledger platform, while making it a more practical solution for fast-paced sectors like e-commerce. The researchers have proposed further optimizations in future which can accelerate Hyperledger Fabric to 50,000 transactions per second.
The only weakness in all of these encouraging developments remains the lack of regulatory infrastructure. But the authorities are moving towards resolving this issue as well. Last month, The Canadian Securities Administrators (CSA) and the Investment Industry Regulatory Organization of Canada (IIROC) published a consultation paper seeking feedback from the fintech community & the public on how best to deal with the regulation of the cryptocurrency platforms. This is an important step if Canada wants to become a home base for this rapidly transitioning ecosystem.