The central Bank of Papua New Guinea is running blockchain trials. Central Bank Governor Loi Bakani described the blockchain trials underway at the Bank of PNG and introduced the PNG Digital Commerce and Cryptocurrency Association for the growing number of Papua New Guinea tech entrepreneurs and businesses interested in blockchain technology.
Banks and central banks around the world are experimenting with blockchain technology. They include Bank of America, HSBC, Credit Suisse, Deutsche Bank, Bank of England, People’s Bank of China, Bank of Canada, the National Bank of Cambodia, and the Central Bank of India.
Beyond partnerships, banks have also invested heavily into internal R&D. In 2016, JP Morgan recently announced that it had earmarked $9 billion to explore technologies like blockchain. Bank of America is looking to gain a first mover advantage by having filed close to 15 blockchain patents, with another 20 in its pipeline.
Capital market applications is another area of interest for the global banks. Deutsche Bank has tested a corporate bond platform that uses smart contracts to issue and redeem bonds while Mitsubishi UFJ is working on a proof of concept for promissory notes.
In general, global banks have the majority of their efforts centred on moving funds and securities quickly and cheaply around their global networks.
Closer to home, DBS, Standard Chartered and the Infocomm Development Authority of Singapore initiated a trade finance collaboration with Ripple to better track invoices and to solve the problem of invoice duplication. A group of Korean banks have also come together to kick off a blockchain remittance project.
One other key application that goes beyond finance is data management. Contrary to the belief that a shared ledger will have inherent privacy issues, R3’s Cooper holds the view that a distributed ledger can serve as a shared platform where client data can be exchanged securely, bound by a specific data privacy legal contract and its use can be made transparent to the respective data provider, for example a regulatory authority.
The most common use cases of blockchain among fintechs are in remittance, payments followed by clearing, settlement and other capital markets applications.
Among these fintechs, some are competing directly with banks, such as P2P lender, BTCJam while others are forming collaborative relationships with banks.