I deeply believe that money must remain in the hands of states. I am not comfortable with the idea that a private group creates a competing currency. A private company does not have to seek to gain power in this way.

Tim Cook, CEO of Apple

It would appear from this that Apple is unlikely to be issuing its own Digital Currency anytime soon. Is this a political statement to curry favor with Washington and other governments, as Apple’s tax affairs are challenged and the EU asks for $14 billion of tax?


Commodity-backed Digital Assets announced from one of the world’s major commodity producers.


Nornickel, based in Russia, is one of the world’s biggest commodity producers which smelts nickel and palladium and employs over 93,000 people. Nornickel’s largest shareholders include the Russian oligarchs, Vladimir Potanin and Roman Abramovich. Nornickel, which is quoted on the Moscow and the London Stock Exchanges and has market capitalization of over £32 billion, has just announced that it is launching a Digital Asset, backed by palladium.

Nornickel and the German manufacturer, BSAF, have unveiled plans to build one of the world’s biggest factories making electric car batteries (to meet the growing need for such batteries) as more and more car companies produce electric-powered vehicles. These electric car batteries will require ever increasing amounts of palladium so, by creating a Digital Asset backed by palladium, Nornickel is, in effect, enabling smaller investors as well as institutions to trade this commodity 24/7.

According to Bloomberg, Nornickel’s CEO Vladimir Potanin sees the tokenizing of contracts as a way of helping to make trading more efficient for buyers, such as car manufacturers which use palladium in their catalytic converters (as well as batteries) and producers like Nornickel. So, if someone commits to buying a certain quantity of the metal and finds they don’t need it all, by tokenizing the metal it might be easier to transfer that part of the contract. Currently, it is only gold and silver that are available in a digital format, but It is only logical that there will be many more commodity-backed digital assets in the next year or two.

Accountants and Blockchain

How Blockchain technology could change an accountant’s role.

According to Deloitte, there are several specific use cases where Blockchain technology can prove to be useful for a company’s accounts department. Some of these are listed below:

  1. Budgeting and Forecasting – allowing the transfer of value/cash between departments, as indeed IBM is doing, using the Stellar cryptocurrency. The use of Blockchain also creates better transparency and internal
  2. Inter-company reconciliations – eliminating inter-company entries. Blockchain technology can potentially replace double entry book-keeping systems, as it creates single records for all transactions. The immutable nature and the historical record maintenance enable accurate consolidation of financial reports, enforcing documentation of intercompany transactions.
  3. Financial Audit – all financial records are maintained in real-time, so potentially enabling daily, not monthly, management accounting. As there is one record which does not need to be verified by third parties, costs can be removed (such as audit) whilst also offering greater transparency of a company’s, and potentially a supplier’s, financial
  4. Vendor Management Smart Contracts allow one to create requisitions and manage vendors. Smart Contracts can be created to automatically make and receive payments, thus improving cash flow and eliminate the need for
  5. Shareholder Voting – As reported by the FT, Santander was the first public company to use Blockchain technology to allow its shareholders to vote. Making voting digital using Blockchain technology, enables people to vote via mobile devices, reduces errors from manual-paper based systems and allows real time analysis and updates of whom and how votes have been

It is highly likely we will see even the accounting world increasingly adopt Blockchain technology, replacing the traditional double entry bookkeeping with one ledger of data that does not need reconciliation. However, we have a way to go before we see full-scale adoption, although there will be increasing pressure on organizations to change, given the increasingly digital age we find ourselves in and the desire for information to be provided ever faster and faster. As Accountex recently said, “The challenge for blockchain is not that it isn’t useful – there are many use cases for the technology in financial services and outside of accounting such as ID verification in Estonia – it’s whether accountants are willing to go through another innovation and change in their industry”.

Alongside this, Blockchain technology also provides a platform for other technologies such as Internet of Things (IoT), Machine Learning (ML) and Artificial Intelligence (AI), all of which will enable data to be collected and managed more efficiently than much of the current accounting software, let alone pen and paper records! The Institute of Chartered Accountants in England and Wales (ICAEW), itself, summarized, “Blockchain could help accountants gain clarity over the available resources and obligations of their organizations, and also free up resources to concentrate on planning and valuation, rather than record-keeping”.

Global use of Blockchain and Digital Assets

Both Blockchain technology (and the Digital Assets created by it), not only have the

potential to, but actually are transforming governments, industries, and even people’s behavior globally. While Blockchain technology has been around since the 1970s it was not until 2008, following the financial turbulence that resulted in the collapse of Lehman Brothers and the creating of Bitcoin, that the technology was broadly unknown of (apart from in academic circles). Bitcoin harnessed Blockchain technology, allowing people to do what British Petroleum refers to as being able to carry out “Trusted Interactions Over The Internet”, thus enabling strangers worldwide to buy and sell from each other without using banks, and in an anonymous fashion. Unfortunately, this gave rise to those who were involved in nefarious activities such as money laundering, arms dealing, drug barons, human trafficking, etc. to be among the early adopters and users. Websites such as ‘The Silk Road’ where guns, narcotics and even assassins could be bought, flourished with transactions using untraceable Bitcoins as the currency of choice. This meant that when the FBI finally closed The Silk Road in October 2013, the FBI became one of the largest holders of Bitcoin.

In simplistic terms, Blockchain technology enables:

  • creation of a database – like an Excel spreadsheet, it has military-grade security, with copies of the data held in multiple locations
  • transfer of value – without double counting
  • digital footprint – immutable record of transactions/information
  • transparency – provenance, traceability
  • risk mitigation – programming in compliance and regulations

All over the world these qualities led ‘tech-startups’ to work on projects tackling almost every industry, as well as charitable endeavors – SC Johnson and Plastic Bank’s initiative to recycle 10,000 tons of plastic being an example of helping the unbanked, and even businesses, designed to change people’s behaviour and so improve the environment.

What many of these organizations often needed was capital, subsequently leading to the creation of what become known as, Initial Coin Offerings (ICOs). ICOs were seen as a way to raise money and, in 2014, Mastercoin launched the first ICO. However, it took nearly three years for ICOs to really take off (which has since resulted in over 5,500 tokens being issued), raising over $30 Billion on a global basis.

It was not just startups that launched ICOs. In Germany, a company called Naga ( was the first European-quoted firm to launch an ICO, raising over €40 Million from 63,000 participants. This was particularly interesting as, historically, Germans investors tend to be cautious, and this ICO was based in Belize!

The problem was that ICOs were unregulated by many governments and financial regulators, so leading to a number of questionable operators and outright Ponzi schemes and scams. It has been claimed that up to 80% of all ICOs are scams. This seems rather harsh, but no doubt there were some very questionable ICOs. Unfortunately, many ICOs have struggled to survive.

Financial services industry

It has not all been doom and gloom as, for example, Ripple claims the World Bank calculates there are $1.6 trillion of costs incurred as money is moved from one bank to another globally. This is a market in which a staggering $150 trillion of monies are transferred between banks and Ripple claims it can do this job faster and cheaper than the current SWIFT system that is used. Whilst only Santander Bank is an equity owner in Ripple, over 100 international banks are now doing trials using Ripple, possibly explaining why it rose in value by over 35,000% in just 2017. No wonder ICOs caught investors’ imagination as they sought the next crypto to solve their personal financial woes!

Clearly the impact of Blockchain and Digital Assets on our lives is now just beginning to be understood, so it is no surprise that leading business leaders have made comments such as these:

  • What the internet did for communications, I think blockchain will do for trusted transactions.” – Ginny Romtty, Ex-CEO IBM
  • Bitcoin is a remarkable cryptographic achievement and the ability to create something that is not duplicable in the digital world has enormous value.” – Eric Schmidt, CEO Google
  • Your kids won’t know what (paper) money is.” – Tim Cook, CEO Apple Inc

Blockchain technology being used in the financial services sector to help lower costs and remove some of the third parties currently involved in issuing bonds. The World Bank (in conjunction with Commonwealth Bank of Australia (CBA), Royal Bank of Canada and TD Securities) has, for the second time in a year, used Blockchain technology to issue a bondraising $33m, taking the total amount raised using this method to over $100 million.

According to Thompson Reuters, in 2018 there was over $6.6 trillion of debt issued globally in that year alone! If the costs of issuing bonds could be reduced by just 0.1%, (some firms claim it could a lot more) then potentially the savings could be in the order of $660 million a year! Little wonder there is more and more interest in using Blockchain technology to cut

out layers of costs and intermediaries, not to mention the greater transparency and risk controls that can be implemented. It is not just the cost saving of using Blockchain technology to issue bonds, but also the enablement of smaller tranches of bonds being issued by SMEs, thus offering these organizations access to a new source of capital. In addition, this could lead to smaller bond offerings, thus challenging the Peer2Peer lending markets which have proved to be so successful in the last few years.

Blockchain technology is also being used in the asset management sector via the tokenization of funds, which Deloitte summarized by stating, “Tokenization allows the creation of a new financial system – one that is more democratic, more efficient and vaster than anything we have seen”. Tokenization of an existing fund enables it to be more relevant and suitable for younger fund buyers i.e. generation X and millennials, who are increasingly looking to buy and sell funds digitally on mobile devices without the need for face-to-face financial advice.

Tokenization can create more transparency, from which it is possible to build-in stronger compliance monitoring due to automation-increased efficiency and lower transaction costs. This makes the tokenization of a fund a powerful incentive for asset managers to adopt.

In addition, there are potentially the additional compliance controls using Smart Contracts but these, coupled with greater transparency and traceability to improve KYC and AML checks, make the use of Blockchain technology highly compelling.

Ironically, it was concern over the “dark web” and anonymity of Bitcoin (which uses Blockchain technology) that made regulators suspicious, and initially cautious, of Digital Assets and the Blockchain technology. However, we could now well see the implementation of Blockchain technology being actively encouraged by these very same sceptics.

As The FT stated, “ Could a progressive regulator mandate a wholesale move to blockchain?”

Agriculture embraces Blockchain technology

It is not just in the financial services sector that we are seeing Blockchain technology being embraced. In agriculture, Blockchain-powered platforms are being built to make the tracking and provenance of food easier while improving the efficiency of supply chains for all those involved. In Brazil, coffee farmers will soon have access to a Cryptocurrency called “coffeecoin”. According to a report on Bloomberg, coffeecoin is being launched by one of

Brazil’s biggest arabica-coffee co-operatives, Minasul. The coffeecoin will enable coffee farmers to buy machinery and fertilizer, as well as non-farm products such as cars and food. The use of Blockchain technology in the agriculture and food supply chain sectors is currently estimated to be $61+ million and, according to ReportLinker, is projected to grow by reach $429+ million by 2025. This growth is being driven by customers demanding greater transparency as to where the food they buy is coming from, how sustainable it is and the environmental impacts of what they are consuming. In the USA, big tech firms such as IBM and Microsoft and international retailers and food processors such as Walmart, McCormick & Co. and Dole Food Company are driving the use of Blockchain technology in agriculture.

Changing consumers behavior

Blockchain technology and Digital Assets are not just being used to raise capital but, as part of a firm’s marketing strategy, are being used to engage and reward their existing and prospective customers.

  • according to Bain and Company, a 5% increase in customer retention can increase a company’s profitability by 75%!
  • Gartner Group statistics tell us that 80% of a company’s future revenue will come from just 20% of its existing customers.
  • according to Marketing Metrics it is far easier (about 50% easier) to sell to existing customers than to brand new

Increasingly, organizations are understanding the importance of why they need to look after their existing clients. As the environment in which we live and do business becomes progressively more digital, so companies are adapting and having to engage with us digitally, whether that be by increasing the amount they spend via online media or offering a digital loyalty incentive scheme. Bain and Company have reported that attracting new customers will cost your company 6–7 times more than keeping an existing customer! As the illustration below shows, the importance of existing clients should not be ignored.

Source: Superoffice

An interesting example of a social impact project that is ‘up and running’ is with PlasticBank, in Haiti, which has been rewarding locals to collect plastic and then paying them with tokens. Further examples are illustrated in an article by Breaker Mag, which listed a selection of different organizations using Blockchain technology, and/or issuing tokens as part of ‘social impact for good’ projects.

Nudge economics has also been widely adopted for years to encourage citizens to change their behavior, e.g. putting seat belts in cars or giving you a selection of dustbins to recycle your rubbish, etc. So, offering tokens to change behavior (i.e. retail loyalty schemes or potentially earning Libra coin for spending more time on Facebook) is really nothing new.

We have also seen IoTA paying tokens to drivers of both Jaguar and Land Rovers in order to encourage them to share information about road conditions, traffic congestion, reason for the journey, etc. However, whether using Blockchain technology and tokens to encourage these types of behavior for social good is another story for another time!


The adoption of Blockchain technology and Digital assets was initially being driven ‘Bottom-up’ – that is, Cyberpunks who wanted to by-pass banks, those carrying out ‘dodgy deals’ on the Silk Road and small tech start-up businesses. Increasingly, we are seeing more ‘Top-down’ advocates – governments, multinational corporations (such as Goldman Sachs, Allianz, SC Johnson and Facebook) implementing the technology to solve real business and environmental challenges. There is still a need for better infrastructure in order to trade Digital Assets, and clearer guidance from regulators. Then there is the question of Quantum computers – will they be able to hack into the military-grade security that Blockchain technology currently uses?

However, possibly the two greatest barriers currently holding back the adoption of Blockchain technology and Digital Assets is a lack of understanding and education, coupled with many people simply do not like change and reluctant to embrace these new digital initiatives.



Walmart has announced that it will be using Blockchain technology to track shrimps from India to its stores in USA following its leafy greens tracking programme, introduced earlier in 2018. “We’re committed to doing business in India in a way that helps drive economic opportunity in local communities across the country,” said Paul Dyck, vice president of corporate affairs for Walmart Inc., adding, “Through this pilot we are working with our

partners and leveraging our global strengths to provide access to blockchain’s innovative technology, which will benefit local farmers and producers, help to transform the food system.”

Blockchain technology enables the digitizing of supply chains to improve the traceability, monitoring of produce from farm to fork, and minimizing the various records and documentation required – so making the movement of goods globally much more efficient. It also potentially makes it much easier for a global bemouth, like Walmart, to start to pay

for the goods with its own digital currency, so combining payments with the movement of produce!

Could these types of initiatives start to align the interests of capitalist corporations like Walmart with subsistence farmers in counties like India and so encourage more sustainable and environmentally friendly practices? Walmart’s customers will be able to know where, when, how and who is producing the food on their plate and with this closer identity, hopefully, there will be greater concern for the longevity of farming methods.


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Jonny Fry
Jonny Fry co-founder and CEO of TeamBlockchain Ltd, is a Blockchain, Crypto, Digital Assets and funds specialist, with over 25 years’ experience as CEO of an asset management business which he floated in London with over £1Billion under management. His focus has been on the dynamics of financial innovation, advising on how Blockchain, Digital Assets are being used in the commercial world, he is also a regular speaker on these topics. Jonny writes a weekly analysis that takes over 15 hours to research and write called Digital Bytes, which subscribers then use the content and create their own branded version to send to staff and clients about some of the developments in the Blockchain and Digital Asset sectors. He is Non-Executive Chairman of Gemini Ltd, which is regulated by the FCA, a Co-founder of The British Blockchain Frontier Technology Association (BBFTA) and advisor for a number of companies helping them with their strategic growth and managing corporate and reputational risk.


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