Have there been any notable success stories or failures of applications of these technologies in your jurisdiction?


Australia Small Flag Australia

There has been general acknowledgement in the Australian blockchain industry that there is significant potential opportunity for the use of blockchain however part of the associated risk has been the high start-up failure rate with reports noting that only 44% of blockchain start-ups survive 120 days beyond funding via an ICO. However, there have many notable applications of blockchain in Australia, generally being pilots and not yet commercialised for mainstream use. Such blockchain implementations are likely to influence the growth and adoption of blockchain in Australia.

  • Clearing and settling: One of the most prominent is the highly anticipated replacement of the ASX’s clearing and settlement process with a blockchain-based system. The ASX is currently in a consultation and development phase and is targeting a March-April 2021 go-live window. 
  • Bond issuance: On 24 August 2018, the International Bank for Reconstruction and Development (an arm of the World Bank) selected the Commonwealth Bank of Australia (CBA) to arrange for the issue of A$110 million worth of bonds on blockchain, with each bond coined a blockchain operated new debt instrument (BOND-i). The bonds are governed by New South Wales law and are the first bonds to be created, allocated, transferred and managed using blockchain.
  • Private sector projects: There have been a number of private sector projects that have used blockchain to deliver services to consumers.
    • Three of Australia’s four major banks have partnered with IBM and Scentre Group to run an eight week trial managing bank guarantees for retail property leases on blockchain, reducing the issuance period for a bank guarantee from up to a month to approximately the same day.
    • The Tide Foundation launched a blockchain-based protocol that will facilitate the personal data economy by enabling organisations to monetise information stored in their databases while also addressing compliance with current and expected privacy regulation.

AgriDigital, a cloud-based commodity management platform, has been building a digital asset protocol for global agri-commodity supply chains following successful sales of wheat on a blockchain and a pilot in food traceability and supply chain provenance, real-time payments, digital escrows and supply chain finance.

France Small Flag France

Major projects launched in France include Tezos, “the future French cryptocurrency champion” according to the French Minister of Economy and Finance, which has the ambition to challenge Ethereum and which is rated among the 20 first cryptocurrencies worldwide by market capitalization.

Another landmark project is the SACEM project, launched by the “Society of Authors, Composers and Publishers of Music”, to create and co-manage a global copyright management platform for online music.

In the legal sector, key applications are being implemented, notably around the timestamping of “non-registered” IP rights – although the “blockchain proof of such rights” has yet to be recognised by the Courts.

Germany Small Flag Germany

In 2016, Deutsche Bundesbank and Deutsche Börse jointly presented a functional prototype for the Blockchain technology-based settlement of securities. While Berthold Kracke, CEO of Clearstream Banking AG of Deutsche Börse Group said, that “the tests showed, that the Blockchain technology is a proper base for applications in the field of securities settlement and other financial market infrastructures the President of the Bundesbank, Jens Weidmann, stated in an interview, that the Blockchain was slower and more costly, compared to the traditional way of handling operations. Weidmann said, that compared to the traditional way of handling operations, the process took a bit longer and resulted in higher computational costs. Besides, similar experiences had been made elsewhere in the financial sector. Despite numerous tests of Blockchain-based prototypes, a real breakthrough in application is missing so far, according to Weidmann.

Ireland Small Flag Ireland

As mentioned in question 1, there are several notable applications of blockchain technology in Ireland which are being used to drive efficiency and transparency including:

  • Moyee Coffee: Moyee is working with KrypC and FairChain ambassadors 'to build a movement around blockchain traceable coffee'. Moyee offers customers access to a shared ledger that tracks each stage of its production process providing full visibility of the supply chain to the parties providing an unprecedented level of transparency around origin and quality; and
  • Ornua: In September 2016, Ornua, Ireland's largest exporter of Irish dairy products, was involved in the first ever blockchain based trade finance transaction in the world.

On a wider scale, a discussion paper on Virtual Currencies and Blockchain Technology (the Discussion Paper), published in March 2018 by the Department of Finance (the DOF), noted that 6.3% of the total venture capital invested in Ireland between 2012 and 2016 was channelled to Irish based blockchain businesses representing the highest percentage of any northern European country.

Italy Small Flag Italy

In 2018, ABI Lab, the centre for research and innovation banks promoted by ABI (the Italian Banking Association representing all Italian banks), coordinated the development and implementation of a distributed ledger technologies (DLTs)-based system for the interbank reconciliation process. The process consists of a series of activities to reconcile the flows and transactions that generate entries in the mutual accounts, including managing pending transactions. The new system allows the interbank reconciliation process to be simplified and standardised across Italy thanks to DLT. A 10-month trial of the system concluded in October 2018, with the participating banks processing a total of 1.9 million transactions. It was then decided that the agreement regulating relationships between banks was to be amended, and as of 1 March 2020 the traditional reconciliation process will be gradually replaced by the DLT-based system.

Japan Small Flag Japan

Being the first country to establish a regulatory framework for crypto assets, and having emerged as one of the largest crypto asset markets globally , Japan has generated some examples of the successful application of blockchain technologies. For instance, in 2017, QUOINE Corporation (now known as Liquid by Quoine; “QUOINE”) became the first in the world to launch an initial exchange offering (“IEO”), which went on to raise over JPY 10 billion.

Following that, however, the Financial Services Agency of Japan (“FSA”) stated that an initial coin offering (“ICO”) to Japan residents should constitute a crypto asset exchange service (“Exchange Service”). As a result, virtually none of the ICOs conducted in Japan after QUOINE’s IEO has been conducted.

As a result, the recent spate in blockchain technology-related businesses are businesses that have not been established under financial regulation related to Crypto Assets (i.e., the PSA or the FIEA), such as Blockchain Games (as defined below) and similar businesses.

Liechtenstein Small Flag Liechtenstein

In terms of successes, the first security token offering in the country took place in August of 2018, which, to our knowledge, was the first ever security token offering conducted within the EU/EEA securities prospectus framework – raising over CHF 25 Mio.

Furthermore, as mentioned above, Aeternity presents a case study of a successful blockchain company within the Principality, due not only to their valuation, but also their development of an international aeternity blockchain community which hosts events around the world.

The Netherlands Small Flag The Netherlands

While it may still be too early to point out specific blockchain application success stories, a good example of PPPs is the Dutch Blockchain Coalition, which is renowned internationally for its work.

Russia Small Flag Russia

In 2017 Russian airline company “S7” and Alfa-Bank organized together the world’s first air tickets sales via blockchain. The system was based on the Ethereum Protocol, which provides interaction of counterparties through smart contracts. According to the latest statistics the amount of payments via this blockchain platform exceeded $1 million and now S7 is developing its own blockchain platform.

Another example is Masterchain, the Russian blockchain-based platform, created as well on the basis of the world-famous platform Ethereum. The creation of Masterchain was launched in 2016 and supported by the Central Bank of Russia as well as some other major players of the banking sector (Sberbank, Alfa-Bank, Raiffeisen Bank, etc.). This platform was used for the sandbox ICO, launched by Sberbank in 2018 (see more specifically in Q.10). Nevertheless, the attitude towards Masterchain in the professional community is not so positive. Some experts believe that the platform has some substantial weak points. For example, it is sometimes criticized for the lack of security and effectiveness, as well as for being too centralized and rather slow. The representatives of the project already announced that the Masterchain source code would become public and some substantial technical amelioration would be done.

South Korea Small Flag South Korea

KT Corporation, Korea’s largest telecom company, launched the first blockchain-based 5G network in April 2019, allowing companies to conduct transactions without an intermediary. KT’s GiGA Stealth technology, a blockchain-based IoT security solution, essentially hides the IP addresses of the connected devices from hackers while KT’s GiGA Chain network enables various blockchain-based features such as smart contracts. KT’s blockchain-based network is currently running a city-wide payment platform in Gimpo city and will be expanded to other cities including Ulsan.

In the energy sector, Korea Electric Power Corporation (“KEPCO”), Korea’s sole provider of retail power, has signed a contract with two domestic power generators to establish a blockchain-powered system for Renewable Energy Certificate (“REC”) transactions. The collaborative agreement, currently in the pilot stage, aims to improve the transparency and efficiency of REC trading in Korea. Upon completion of the pilot program, KEPCO and the generators will follow up with a commercial project.

Mainstream financial institutions have already launched major projects to implement blockchain technology and proprietary cryptocurrency. Shinhan Bank is adopting blockchain technology for its loan application process. By verifying items of proof, such as certification documents and various qualifications, through a blockchain-powered platform, Shinhan Bank is expected to cut down on the time spent on the verification process and operating costs. Shinhan Bank has already successfully adopted blockchain technology to verify its customers’ membership status with a Korean doctors’ association. With blockchain technology, Shinhan Bank reduced the membership verification time from two to three days to almost immediately.

Another major Korean bank, KEB Hana Bank, plans to use blockchain technology via its Global Loyalty Network platform in Taiwan to enable transactions with digital cash across multiple countries through partnerships with third-party companies. KEB Hana Bank has upcoming plans to expand its presence outside of Korea through partnerships with non-banking companies. The integration of blockchain platforms is likely to increase in the future as the bank expands its blockchain-based services both regionally and globally.

Sweden Small Flag Sweden

The Swedish Mapping, Cadastral and Land Registration Authority together with Landshypotek Bank, SBAB, Telia Company, ChromaWay, and Kairos Future first started testing blockchain technology in 2016, completing their second stage of trials in March 2017. By July 2017, the Swedish land registry was using blockchain technology to register land and properties on the Swedish blockchain startup ChromaWay’s private blockchain network, albeit on a “small scale”. In June 2018 the authority conducted its first blockchain property transaction, when ownership of a small property on the Swedish island of Gotland shifted hands using blockchain.

The institute for the accountancy profession in Sweden (FAR), are working on a project together with the Swedish Tax Agency, Kairos Future, Visma, SEB, Fortnox, and FAR members Deloitte, PwC, Grant Thornton, and KPMG, where blockchain technology is proposed to perform a key role in modernizing accounting, auditing and tax matters.

SEB, one of the major banks in Sweden, has initiated a project together with Nasdaq, the stock exchange operator, called “Nordic Fund Ledger”, which is aiming to improve mutual fund trading by applying blockchain.

Switzerland Small Flag Switzerland

The greater area around the cities of Zug and Zurich has been highly successful in attracting blockchain business and fostering the development of a significant ecosystem of start-ups and more mature companies focusing on the topic (dubbed the Swiss "Crypto Valley"). In an initial phase, the Crypto Valley became known as an attractive base for companies wishing to conduct initial coin offerings (ICOs). These projects drew the interest of a broad range of investors and, in some cases, significant amounts in funding were collected (see also question 10). As of 2018, however, the enthusiasm in the ICO market cooled down considerably. Part of this development may be attributed to the general decrease in crypto currency values, but it must also be seen as a sign of the growing awareness regarding the legal and regulatory framework that applies to ICOs and other types of token or coin offerings, and the challenges and limitations associated with conducting such fundraisings in a compliant manner. The market value of the 50 largest blockchain companies domiciled in Switzerland apparently dropped from USD 44bn to USD 20bn in 2018 (www.swissinfo.ch, Blockchain start-up growth bucks Swiss trend, 24 January 2019) with some recovery in the course of 2019. More recently, the focus of attention has shifted towards the nascent market of security token offerings (STO).

The next phase of blockchain business in Switzerland appears to be defined by more mature projects, many of which are backed or launched by established financial institutions and technology companies. The new wave of blockchain start-ups in the financial sector more readily accepts and embraces regulation, with several projects aiming to become licensed and supervised by the Swiss Financial Market Supervisory Authority FINMA. In 2018, FINMA granted the first licence for an asset manager of collective investment schemes to Crypto Fund AG, a company focusing on investment management in the area of crypto assets. Further, in August 2019, two Swiss start-up companies, SEBA Bank AG and Sygnum Bank AG, were granted full Swiss banking and securities dealer licenses by FINMA.

FINMA generally displays a positive attitude towards projects in the blockchain sector, while at the same time being committed to ensuring and enforcing compliance with existing Swiss financial regulation. Publicised enforcement cases include e.g. the matter of envion AG, which was found by FINMA to have unlawfully accepted deposits amounting to over CHF 90 million from at least 37,000 investors in an ICO without the required licence, seriously violating supervisory law (FINMA media release, 27 March 2019), as well as the shutdown of providers of a "fake" crypto currency in late 2017 (FINMA media release, 19 September 2017) (see also question 18). In its 2018 Enforcement Report, FINMA notes that it has seen a sharp increase in the number of investigations into institutions suspected of operating without a licence and that it has been reviewing the regulatory classification of blockchain-based business models in particular (FINMA Enforcement Report 2018, p. 2; see also question 18).

Uganda Small Flag Uganda

As noted above, most projects are either in their development stage or under due consideration. The most success has been with trading exchanges, notably Binance Uganda and Binusu. Binance has deep liquidity, given that they are a subsidiary of the world’s largest cryptocurrency exchange at the moment. Binusu has the best order matching engine in Uganda after Binance. Although Binusu is an older exchange, Binance had the advantage of economies of scale and has grown much faster.

Earlier in the year, blockchain technology was successfully used in the provision of aid relief to the victims of landslides in Eastern Uganda. The project was a collaboration between the Binance Charity Foundation and CryptoSavannah Foundation. Binance Charity Foundation continues to use blockchain to provide aid towards feeding children in Ugandan schools.

United Kingdom Small Flag United Kingdom

The majority of projects utilising blockchain in the UK remain in their infancy, although many appear promising. In the financial services sphere, a good number of firms have passed through the Financial Conduct Authority’s (“FCA”) Regulatory Sandbox (discussed in further detail at question 5 below), to test how DLTs might improve existing processes such as the issuance of short-term debt instruments. In fact, DLT is the most popular technology tested in the Regulatory Sandbox, with more than one third of the 89 firms in the Sandbox using DLT and/or cryptoassets (as at October 2018).

A number of large-scale international blockchain projects involving global financial institutions also have a UK nexus. A key example is Fnality International (previously known as Utility Settlement Coin), a UK-based project which is backed by a consortium of financial institutions led by UBS. Fnality is developing tokenised versions of five major fiat currencies, and reportedly raised £50 million in June 2019 from 14 shareholder banks. UK-based banks have also invested in blockchain technologies. For instance, Lloyds Bank recently announced that it is developing the use of blockchain in trade finance operations with the aim of digitising the entire commodity trade finance process, while also making it possible for businesses to exchange data and other documents (including letters of credit) faster.

Encouraging progress has also been made in other sectors. Established industry players have been exploring how they might use blockchain to their advantage, such as UK energy supplier Centrica which has been investigating how peer-to-peer energy trading on a blockchain platform could reduce customer bills. The UK has also proven fertile ground for a number of successful start-ups, including: Provenance, a digital platform which seeks to provide businesses with greater transparency by tracking products along their supply chains; Everledger, a tech enterprise which tracks the provenance of high-value assets on a global digital ledger, including diamonds; and Medicalchain, a decentralised platform that enables the secure, fast and transparent exchange and use of medical data.

The UK Government and various regulators have themselves also trialled the integration of blockchain technologies into their own processes (discussed further at question 4 below).

As yet, there have been no heavily publicised failures of blockchain technologies in this jurisdiction. This is likely a by-product of the nascent nature of blockchain-related applications here in the UK.

United States Small Flag United States

The DAO hack is an iconic illustration in the US of both technical and regulatory shortcomings possibly attached with a blockchain application. The DAO, a digital decentralized autonomous organization, created a form of investor-directed venture capital fund, which allowed for the purchase of digital tokens during initial coin offerings (“ICOs”) as well as secondary trading. Due to vulnerabilities in the DAO smart contract, in June 2016, a DOA vulnerability was exploited by hackers, which almost led to the loss of 3.6 million Ether, which was valued around $50 million USD (approximating one-third of the fund). This was avoided by implementing a “hard fork”, overwriting the Ethereum blockchain network to restore stolen ethers. In addition, the US Securities and Exchange Commission (“SEC”) intervened, confirming that an unregistered, non-exempted ICO could constitute a securities offering in violation of federal securities laws. The fund ultimately shut down but illustrates both legal and technical difficulties tied to blockchain technologies.

Despite the “risks” attached with blockchain, the US’s appetite for such technologies remains strong. In 2019, Deloitte’s survey reported a 61% positive response that blockchain technology is broadly scalable and will eventually achieve mainstream adoption. The market is still interested and optimistic as shown recently with the attempt of a crypto-dividend for Overstock. However, it is still too early to fully measure the impact of the current application attempts.

Singapore Small Flag Singapore

Developed by governmental institutions in Singapore, the NTP, utilising distributed ledger technology, connects players across the trade value chain in a single platform, enabling the reuse of data to cut costs and streamline processes. It also links users of NTP to trade platforms in other countries. The Monetary Authority of Singapore, Singapore’s central bank and integrated financial regulator (“MAS”) had also initiated a collaborative project, called “Project Ubin” “with the financial services industry to explore the use of blockchain for clearing and settlement of payments and securities”. Alongside this project, the Bank of Canada and the MAS conducted a successful experiment on cross-border and cross-currency payments using digital currencies. By using hashed time-locked contracts, they were able to allow for Payment versus Payment settlement without a trusted third party intermediary.

In the education sector, “OpenCerts” was jointly developed by governmental organisations in Singapore with Ngee Ann Polytechnic to enable educational institutions to issue digital certificates. The platform uses blockchain technology to allow employers and educational institutions to issue and validate tamper-resistant certificates. These digital certificates have already been issued by local institutions in Singapore. In the private sector, Singapore Airlines’ “KrisFlyer” frequent-flyer programme has also launched a blockchain-based airline loyalty digital wallet called “KrisPay” which allows members to pay for their purchases with partner merchants, either partially or in full in using Singapore Airlines frequent flyer miles.

Hong Kong Small Flag Hong Kong

In December 2017, China Merchants Bank and CMB Wing Lung Bank launched a blockchain-based solution to facilitate cross-border RMB remittance. This was followed in 2018 with the launch by Alipay and GCash, supported by Standard Chartered Bank, of a cross-border real-time remittance service between Hong Kong and the Philippines.

On 31 October 2018, the HKMA announced the official launch of eTradeConnect, a blockchain-based trade finance platform developed by a consortium of twelve major banks in Hong Kong. Formerly known as the Hong Kong Trade Finance Platform, eTradeConnect aims to improve trade efficiency, build better trust among trade participants, reduce risks and facilitate trade counterparties to obtain financing by digitising trade documents, automating trade finance processes and leveraging the features of blockchain technology. In order to facilitate cross-border trades, the HKMA has been proactively looking for opportunities to connect eTradeConnect with trade platforms in other regions. On 31 October 2018, eTradeConnect announced the signing of a Memorandum of Understanding with we.trade to conduct a Proof-of-Concept (“PoC”) trial on connecting the two platforms. we.trade, the first blockchain-based trade finance platform in Europe, based on the IBM Blockchain Platform, is a joint venture between 12 European banks that was launched in June 2018 and currently provides client coverage across 14 European countries.

February 2019 saw the launch of PropTech, the first blockchain platform for home buyers. PropTech is a collaboration between New World Development Company Limited (“NWD”) and the Hong Kong Applied Science and Technology Research Institute (“ASTRI”), with Bank of China (Hong Kong) Limited becoming the first bank user. NWD highlighted five key advantages of combining PropTech and blockchain technology: (i) 24/7 streamlined service with no restrictions on time or location; (ii) saving 6 hours in mortgage application procedures; (iii) instant intelligence for buyers (including status updates and procedural notification reminders of important dates); (iv) quick digital verification of buyer’s information; and (v) environmentally friendly and paperless procedures.

In March 2019, Hong Kong’s sole physical gold and silver exchange, the Chinese Gold & Silver Exchange (CGSE), launched a new digital gold certificate trading platform, GoldZip, backed by physical gold reserves. The platform is powered by blockchain technology and allows investors to trade in amounts smaller than the current minimum trade on the exchange.

Whilst there have been no widely publicised major failures of the application of blockchain technology in Hong Kong, the SFC has issued a number of statements and circulars concerning cryptocurrencies and other virtual assets, the primary focus of which has been to warn investors of the risks inherent in investing in such assets and of participating in initial coin offerings (“ICOs”) and securities token offerings (“STOs”). These are discussed in further detail in the responses to questions 8-15 below.

Despite the above, the implementation of blockchain technology is more at PoC stage rather than being widely implemented.

Updated: November 20, 2019