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Six Global Banks Sign up to Issue Stablecoins on IBM’s Now-Live Blockchain Network

Six global banks will reportedly issue their own stablecoins backed by their national fiat currencies on IBM’s Stellar-powered payments network.

Six international banks have reportedly signed letters of intent to issue their own stablecoins backed by their national fiat currencies on IBM’s now-live blockchain-powered payments network, “World Wire.” The news was jointly announced by IBM and Stellar during a keynote at Money 2020 Asia in Singapore, financial news channel Cheddar reported on March 18.

As previously reported, IBM’s cross-border payment network, Blockchain World Wire (BWW) was launched in collaboration with Stellar (XLM) in September 2018. BWW, which went live today and reportedly has over 44 banks on service, aims to leverage cryptocurrencies to enable near real-time international settlements between banks.

In today’s development, Cheddar reports that six banks have confirmed their intent to issue stablecoins backed by their national fiat currencies on BWW — including Brazil’s Banco Bradesco, South Korea’s Bank Busan and the Philippines’ Rizal Commercial Banking Corporation.

Other as-yet-undisclosed banks will reportedly issue stablecoins backed by the euro and Indonesian rupiah, among others, IBM head of blockchain solutions Jesse Lund revealed.

Ahead of today’s bank-issued stablecoin announcement, IBM had also partnered with Stronghold, a Stellar-based, USD-backed asset, to create the Stellar network’s first stablecoin.

Lund has stated that IBM plans to expand its blockchain-powered settlement network with further assets. He said:

“We let the market drive the expansion and selection of the network incrementally. We are really feeling excited that we are on a roll to build something new and revolutionary that’s really going to change the landscape of cross-border payments.”

As Cheddar reports, BWW currently supports more than 47 currencies for payments across 72 countries. It disintermediates legacy bank settlement systems by introducing the XLM token as an efficient, immutably-tracked settlement instrument for fiat currencies between institutional parties.

IBM does not issue the settlement asset chosen between parties, as Lund had emphasized in an interview earlier this week:

“Our view for stablecoins is really that they should be more broadly accessible and what World Wire seeks to do is to provide fungibility of digital assets across financial institutions.”

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IBM Hints at Stablecoin Cross-Border Payments Solution for Financial Institutions

IBM’s Jesse Lund, has hinted that bank-targeted stablecoins will be a major forthcoming development for IBM’s blockchain-powered cross-border payments solution.

The head of blockchain solutions for IBM, Jesse Lund, has hinted that bank-targeted stablecoins will be a major forthcoming development for the tech giant’s blockchain-powered cross-border payments solution. Lund made his remarks during an interview on financial news channel Cheddar on March 15.

While more details are set to be imminently announced next week, Lund told Cheddar that “market demand” is driving IBM to develop a stablecoin solution for financial institutions.

“More than a few banks around the world […] see tremendous business benefit to issue stablecoins in their native fiat currency,” he said.

When asked how IBM’s solution compares to JPMorgan Chase’s forthcoming in-house, USD-backed “JPM Coin” stablecoin, Lund hinted that IBM’s solution would be “somewhere in between” JPM’s exclusive, closed network asset. He stated:

“It’s not a proprietary coin like JPMorgan’s solution, although I think what they’re doing makes a lot of sense for them. […] What JPM’s doing also adds tremendous validation to what we’re doing. But our view for stablecoins is really that they should be more broadly accessible and what World Wire seeks to do is to provide fungibility of digital assets across financial institutions.”

“World Wire” refers to IBM’s collaboration with Stellar (XLM) and use of the network’s native asset in IBM’s cross-border payment network, Blockchain World Wire (BWW).

Alongside BWW, which aims to leverage cryptocurrencies to enable near real time international settlements between banks, IBM has also partnered with Stronghold, a Stellar-based asset, to create the Stellar network’s first stablecoin.

As Cointelegraph reported in February, Lund recently hinted at IBM’s interest in stablecoins as a vital aspect of innovating the cross-border payments landscape. Proposing that there should be an ecosystem of various digital assets that work as settlement instruments for cross-border payments, he suggested:

“It could be […] XRP […] it could be Bitcoin, but it would also probably include other instruments, like stablecoins, and even eventually soon — hopefully — central bank-issued digital currencies.”

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French Court Clerks to Use IBM Blockchain Platform for Corporate Registry

French clerks of commercial courts will use a blockchain platform developed with IBM to record changes in companies’ legal status.

French commercial court clerks will use a blockchain-based platform to record changes in companies’ legal status within the country. The development was revealed in an official announcement on March 14.

The blockchain network was jointly developed by IBM and the National Council of Clerks (NCC) and will reportedly be deployed starting in 2019 by the clerks operating in commercial courts across France. The blockchain platform is built on the Hyperledger Fabric framework and aims to increase transparency and efficiency in legal transactions associated with the lifecycle of companies in the registry.

Specifically, the solution will be used to record and share data related to “the exchanges of regulatory information related to companies’ difficulties,” as well as “the changes of status of the company registered on the French territory.” That includes such data as change of corporate name, registration court office, establishment of branch offices, and business dissolution.

In a pilot, NCC reportedly managed to shorten the time needed to update the registry from several days to a single day. Vincent Fournier, Senior Manager Blockchain at IBM France, said that “blockchain’s qualities are ideal for this use, improving the Clerks’ business processes and adapting to the ever-changing nature of their missions.”

IBM has released various commercial blockchain products and filed a number of blockchain-related patents. Moreover, IBM reportedly offers the greatest number of blockchain jobs, according to recent research by The Next Web.

This week, IBM partnered with blockchain consortium and credit union service organization CULedger to develop new blockchain-based solutions for the credit union industry. These solutions can reportedly improve services such as digital identity authentication, Know Your Customer compliance, lending and payments services, and other consumer processes that require authentication.

Also this month, IBM revealed two new patents targeting network security using blockchain technology and focusing on database management using the tech.

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IBM Publishes Patent for Resisting Replay Attacks in Permissioned Blockchains

IBM is adding to its arsenal of blockchain patents with an application for improving the security of permissioned blockchain networks.

Multinational computing giant IBM is adding to its arsenal of blockchain patents with an application for improving the security of permissioned blockchain networks. The patent, first filed in October 2016, was published by the United States Patent and Trademark Office on March 12.

The patent is entitled “Resisting replay attacks efficiently in a permissioned and privacy-preserving blockchain network,” and outlines security techniques for withstanding such attacks while maintaining valid user permissions and privacy.

In its most general sense, a replay attack is a valid data transmission that is maliciously or fraudulently repeated or delayed. IBM’s background for its patent explains this threat within the context of blockchains, outlining that:

“In a replay attack the attacker simply ‘replays’ a message that was ‘eavesdropped’ on from the network or that the attacker ‘saw’ on the Blockchain. Such a replay would cause the blockchain validators to include this new transaction in the Blockchain, and thus repeat the result of that transaction without the original creator of the transaction intending this.”

IBM’s invention for resisting this possibility within the context of a permissioned blockchain entails a method of communication and securing the validation of transactions within a network of computer systems:

“In a network of computer systems, a method of communication may comprise at a user computer system, generating a security value that is to be used only once, generating a message signed with a security certificate and including the security value, and transmitting the message over the network of computer systems.”

Various embodiments of IBM’s invention outline how validator permissions for each of the networked systems are to be secured. This involves generating a transaction that is “signed with a security certificate and includes a [unique] security value” (to be used only once), which indicates that a blockchain network of computer systems is eligible to execute a transaction, before it is transmitted onward.

As Cointelegraph has reported, a data survey of blockchain-related patents filed by August 2018 revealed that IBM was virtually neck-and-neck with China’s Alibaba in terms of the highest number of such patents filed by a global entity.

Just last week, the tech giant unveiled two new blockchain patent applications, one targeted at network security and the second focused on using blockchain to streamline database management systems.

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Following Fidelity’s Bitcoin Soft Launch, IBM Delves Into Crypto Custody

New York Firm Launches Crypto Offering

2018 may have seen Bitcoin (BTC) fall by over 70%, but institutions and powerhouses in traditional industries are still actively seeking to get their foot into the crypto door. CoinDesk reports that blockchain-friendly IBM, one of the largest forward-thinking technology companies across the globe, has quietly entered into the cryptocurrency custody space with a little-known partner.

The outlet’s Ian Allison writes that Shuttle Holdings, a New York-headquartered investment group, will be launching custodial services for this newfangled asset class sometime in late-March. Shuttle has purportedly built the offering on IBM’s private cloud service, backed by the Corporate America darling’s encryption technology. It is important to note that Shuttle is offering the tools for cryptocurrency custody, rather than handling the nitty-gritty itself.

Much like other institutional plays in this budding space, Shuttle has started small, offering its solution to a hand-picked list of clients that it believes can handle the cryptocurrency stress. Eventually, however, the company intends to see banks, brokers, custodians, family offices, along with other institutional subsets dabble in the storage of cryptocurrency.

Shuttle and IBM’s venture is not exactly what Bitcoin traditionalists would call cold storage. As hinted at earlier, private keys will be stored not on a device in a vault, but in the cloud (private that is) and secured by a number of layers of industrial-grade encryption. In a presentation at an IBM event, Shuttle’s Brad Chun explained that it sought to harness this method of custody as firms need their cryptocurrency often at a moment’s notice, with a digital system being much more efficient in that regard. He even states that by some measures, Shuttle’s tools will be “just as secure, if not more secure” than regular cold wallets, some of which were proven to have massive security vulnerabilities over recent months. Explaining more about the project, Chun told CoinDesk:

“There are always trade-offs between security and efficiency, but we do not utilize a traditional cold storage system. Instead, we keep keys at rest encrypted in multiple layers as data blobs so that an organization can store these backups using their pre-existing disaster recovery and backup processes and media.”

Interestingly, Chun mentioned that he attempts to push Shuttle’s custody service to eventually service real world asset-backed tokens, like those for real estate (land titles), shares of both private and public standing, among others. As Anthony Pompliano, Jeremy Allaire, among others are pushing for a tokenized world, this may only make sense.

This offering comes after IBM’s blockchain head, Jesse Lund, told reporters that he expects Bitcoin to end the year at $5,000 before skyrocketing to $1 million as time elapses.

Custody: A Growing Trend

This, of course, only underscores the industry trend of custody of digital assets. Per previous reports,  it has been officially confirmed that Fidelity Digital Asset Services (FDAS), the first fully-fledged crypto platform backed by Wall Street, has gone live. In a number of interviews with cryptocurrency outlets this week, Tom Jessop, a former Goldman Sachs executive turned head of FDAS, explained that his brainchild’s offerings are live for a select list of “eligible clients.” Jessop adds that at the moment, the platform only supports Bitcoin, and will be staving off its verdict on Ethereum due to impending blockchain upgrades.

Photo by Annie Spratt on Unsplash

The post Following Fidelity’s Bitcoin Soft Launch, IBM Delves Into Crypto Custody appeared first on Ethereum World News.

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Thirsty California May Be Wary of Blockchain Water Rights

Blockchain water rights may upset California’s status quo.

Last week, Colorado lawmakers filed a bill exploring how blockchain technology could be applied to water rights management.

Now, California is also studying blockchain for use in water rights management, as reported by Cointelegraph. But coming off a severe drought, which saw water restrictions throughout the state, they are facing a far different set of circumstances than Colorado, as water rights in California have always been a highly political issue.

The film “Water & Power: A California Heist” examined how a handful of corporate landowners took advantage of a state-engineered system and gained control of its water, leaving local homeowners with dry wells. Hollywood also has examined the issue with a bit more drama in “Chinatown,” where the California’s water wars and dirty dealing was dealt with by Jack Nicholson and Faye Dunaway.

In a state where agricultural and corporate interests consume much of the available water while restaurants won’t serve a glass for free and residents’ lawns turn brown, blockchain adoption may be looked at warily by special interests and government, all with a vested interest in maintaining a veil over water usage while blaming the little guys for waste.  

Here’s a closer look at how the blockchain might be implemented in California to manage water.

IBM, The Freshwater Trust and SweetSense

In California, researcher the Pacific Institute has a nonprofit called The Freshwater Trust. It has already spearheaded a collaboration on water management with IBM and SweetSense. The project amounts to a blockchain-based system that implements Internet of Things (IoT) sensors across water pumps in a major river.

The state has been plagued by severe water shortages since 2006, and suffered drought in nine of these past thirteen years. That’s actually keeping within historical norms, as in the 20th century, the state had five periods of drought, with one lasting nine years and another eight years.

California receives most of its water from systems called atmospheric rivers. These storms drop most of the water the region receives on a yearly basis. On average, between 30 and 50 percent of annual precipitation in West Coast states happens in about three atmospheric rivers.

When too few happen, California is in a drought.

Scientists and engineers will use blockchain and IoT sensors to track groundwater usage in real-time across the Sacramento San Joaquin River Delta. Their aim is to manage the water supply and ease pressures on the water table.

Covering 1,100 square miles, the northern California delta is one of the largest aquifers considered by many to be at a high risk for ecological destruction. It sources water for the southern and coastal areas of the state and supports dozens of endangered species, including around 75 percent of all salmon found in California. Three quarters of the delta is further used for agriculture, and this is responsible for much of the high water demand.

“California is huge for American agriculture, but it’s heavily groundwater dependent,” said Alex Johnson, fund director for The Freshwater Trust, while speaking to Digital Trends. “There are some basins in the central valley that have been so depleted over the last couple decades that they are 20 feet lower in elevation.”

Aquifers in California have suffered from intensive farming and business use. The water table is not just being lowered, making water more scarce, but rain has not replenished the aquifers fast enough. One, or even two, rainy years are not enough; the ground is already sinking in a phenomenon called subsidence, the sudden sinking or gradual downward settling of the ground’s surface with little or no horizontal motion.

A market for water

IoT sensors track levels of groundwater pulled up from individual pumps before uploading data via satellite to IBM’s blockchain — with no need for internet connectivity — and then water credits can be granted according to usage. A credit grants its owner the right to extract a set amount of groundwater, but if their need is less, they can sell it as a digital asset.

Conversely, those in need of additional water credits are able to buy from others. This is great if, for example, a farmer chooses to rest their land for a season at the same time a winery realizes it needs extra groundwater during a particularly dry spell. A blockchain system coupled with AI could theoretically recognize opportunities for businesses to trade credits for water and notify administrators and businesses. There is no direct negative effect on the aquifer, if the additional water shares can be bought from the farmer.

Such an open market gives an incentive for businesses and farmers to manage their water use due to the fact that using less means they can sell their credits for a profit. Managing the water supply in this way could prove efficient in a region where already too much groundwater has been drawn.

Using blockchain brings transparency to the system because all records and subsequent amendments can be seen by anyone. Being able to observe the amount of groundwater used by various entities is vital: There is no incentive for an individual to regulate water usage if competitors pay no heed to regulations. If the pilot project is successful, blockchain will be set to play an instrumental role in helping prevent a state-wide ecological disaster looming large for California.

So, how can blockchain help more efficiently manage these artificial rivers and the water they bring?  

Beyond water rights database management, water markets and general administration, a blockchain system could make the management of water more efficient while interfacing with automation and AI. For instance, after numerous recent artificial rivers, less than 1 percent of the state is still considered in drought (one year ago, the United States Drought Monitor classified 48 percent of California as being in a drought). Surprisingly, this region is on the Oregon border.

Using trustworthy oracles, an AI-blockchain could theoretically identify changes in conditions ahead of time, suggest contingency plans, and find buyers (in the drought-stricken region) and sellers (in the regions with ample rainfall) for water before the atmospheric storms even arrive. A blockchain logistics system could be implemented as part of a blockchain-based water management system.

The Hyperledger blockchain

IBM, SweetSense and The Freshwater Trust will likely use the Hyperledger blockchain — which is hosted by the Linux Foundation, Ripple, Stellar and Ethereum — for any experiments pertaining to water management. Local and city governments could also partner with R3 on such a critical part of the infrastructure.

There are several reasons why state officials prefer to partner with a blockchain organization focused on enterprise. For instance, Hyperledger, R3 and Ripple have received money from investors and clients, and can afford research and discovery.

Blockchain water banks

Colorado’s Bill 184 says the Pacific Institute should look into water rights database management, the establishment of water “banks” or markets, and general administration with blockchain once it acquires funds.

The experiment is underway in California. And there, the improved management of approximately three to four atmospheric rivers per year is critical — from collection all the way to allocation.

“We will never capture it all, but we need to do a better job of capturing what we can,” Peter Gleick of the Pacific Institute told Fox News.  

“The challenge is: How do we capture more of that water to use it so we can use it during dry parts of the year? And cities in California have not historically done a good job of capturing what we call stormwater,” Mr Gleick added.