How United Nation and IMF are helping Blockchain flourish?
How United Nation and IMF are helping Blockchain flourish?
The technical advancements in the world have made it a small place to live in! The credit for this goes to the globalization of our economy and wide-spread social media network which has enveloped our world and filled in communication gaps.
The fact that a technology which is just 10 years old and still in a latent phase of development has managed to get so much of attention and has become a hot topic of debates and discussions. The dizzying gyrations of crypto-assets such as Bitcoin have lured even the World Bank to issue the world’s first blockchain bond.
The innovations and use cases of the blockchain seem to be enlarging each day. Image credit: Accenture Research
The moves from governing bodies like the World Bank and IMF are a big boost to widespread acceptance of blockchain.
Image credit: Crunchbase news
When Satoshi Nakamoto invented the Bitcoin blockchain, he wished to eliminate the third party and give power in the hands of people.
The empowering technology presents a grave threat to the existence of controlling bodies like the government and the banks. The irony is one of the world’s biggest boosters of blockchains—shared cryptographic ledgers inspired by the one that underlies Nakamoto’s invention—is the World Bank, which is owned by governments.
Let us look at the series of events and actions taken by the World Bank and IMF which has helped blockchain flourish.
International Monetary Fund
In January 2016, IMF presented a report titled “Virtual Currencies and Beyond: Initial Considerations” at the World Economic Forum during the panel Transformation of Finance. The report states the benefits, innovation, and insights on IMF’s vision of what comes with virtual currencies, crypto assets and blockchain technology.
Read the report here: https://www.imf.org/external/pubs/ft/sdn/2016/sdn1603.pdf
In a recent report presented by IMF F&D magazine in June 2018, titled “The Future of Currency in a Digital World ” talks about how the decline of cash can be neither stopped nor reversed and virtual currencies are going to rule the future.
Read the report here: https://www.imf.org/external/pubs/ft/fandd/2018/06/pdf/fd0618.pdf
Christine Lagarde, Managing Director (MD) and Chairwoman of the International Monetary Fund (IMF), believes that the advent of the blockchain into mainstream society is inevitable and the use of decentralized applications (Dapps) would bring stability and strengthen the present financial system.
In the report, Christine Lagarde says, “even-handed approach” towards Fintech can incentivize positive changes.
She also addresses the dark side of cryptocurrencies as transactions on public blockchain networks, like Bitcoin and Ethereum, are very difficult (almost impossible) to trace. The result, Lagarde says, “is a potentially major new vehicle for money laundering and the financing of terrorism.”
She suggests a solution and writes “The same innovations that power crypto-assets can help us regulate them.” for this she says that when blockchain combines with new technologies like biometrics and AI, this could “help us remove the pollution from the crypto-assets ecosystem.”
In the statement and a video posted on IMF’s official Twitter page stated indirectly how the 3 prominent cryptocurrencies, Bitcoin (BTC), Ripple (XRP), and Ethereum (ETH), could help change the world and give vital solutions to the financial turbulence occurring globally.
Check out the video here: Bitcoin, Ethereum, Ripple… what are these? And why should you care? pic.twitter.com/PG0MLntkhO
— IMF (@IMFNews) June 1, 2018
The World Bank has proved to be a verified blockchain booster and has already employed the blockchain technology to extend help to refugees.
This year the World Bank presented its most concrete blockchain-based application which is the world’s first public bond created and managed using the only blockchain with the help of an Australian bank that uses a private version of Ethereum. The goal of this project was to explore how blockchain technology can make it easier for investors to access the market while also increasing transparency around financing.
So far, the blockchain-based bond has raised around $80 million.
This year itself, the World Bank partnered with Consensys, a company focused on developing applications using Ethereum, to explore how blockchain technology can help improve a pilot-stage educational platform called Evoke.
The World Bank recently launched a Blockchain Technology Lab which experiments in education, financial services, and efforts to trace agricultural and pharmaceutical supply chains.
Prema Shrikrishna, who works in the World Bank’s Technology Innovation Lab, says that the aim of the blockchain lab is to “put power back in the hands of the people.”
Image credit: World Bank blog
In a report released at the end of April, the Economic Commission for Latin America and the Caribbean (ECLAC), stated how blockchain could help improve costs in troubled banking sectors.
The report said, “this technology appears to have the potential to address the problem of de-risking on two fronts,”
“First, an appropriately designed Blockchain-based settlement network would offer tools to improve surveillance of transactions, which would enable the detection of illicit financial transfers and thereby decrease risk and associated compliance costs.”
“Second, a Blockchain-based network would offer Caribbean banks the opportunity to bypass correspondent banks altogether, thereby reducing transaction costs and increasing efficiency.”
In June 2017, the United Nations World Food Programme used the Ethereum Blockchain to transfer vouchers based on cryptocurrencies to refugees in Syria. About 10,000 people were the beneficiaries of cryptocurrency vouchers. The UN used a platform that was created by Parity Technologies.
“Funds that were sent to the refugees were specifically used for buying food. With the success of this project, the World Food Programme (WFP) plans to extend the project even further to cover 100,000 people in Jordan by late 2018.”