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Blockchain, Crypto

Blockchain updates: Initiatives and warnings

With new blockchain initiatives being frequently announced, for example this one reported on FT.com in agricultural commodities, or even this UN backed initiative to “help fight climate change” reported here on Coindesk, there is much to discuss since last week’s post here.

This article on Forbes looks at the extension of the BTL initiative from gas trade confirmations to settlement, with new participants joining (press release here). The initiative uses the Interbit platform to expand the part of the trade life-cycle covered, and thus increase its usefulness, especially when considering the application of smart contracts. It will be interesting to see if and how the initiative can support simpler regulatory reporting. Recently, Applied Blockchain has announced an investment from Shell (see here). Elring and WePower have also announced an initiative to support peer to peer green energy trading in Estonia (see the press release here).

Legal aspects of smart contracts, and issues which may prevent them from being legally binding are discussed in this post on LinkedIn by Matthew Gore of HFW. It discusses the application of blockchain in the supply chain around the shipping of commodities, and refers to efforts in the US to make them legally enforceable.

On the crypto currency side of things, worries about market manipulation persist, with this article on CBS New reporting on the manipulation of the Bitcoin price that took place several years ago on the Mt Gox exchange, as well as more recent concerns about the launch of bitcoin futures on CME and CBOE. In Europe, ESMA has initiated a call for evidence for a possible product intervention under MiFID II for CFDs offered to retail investors with crypto currencies as underlying, as part of a wider call relating to binary options and others. The issue is explained further here on FT.com. The CFTC has also issued this “Backgrounder on Oversight of and Approach to Virtual Currency Futures Markets”. It explains the current regulatory tools available for oversight of crypto currencies in the US, and also explains how the “self certification” process used for contracts on Designated Contract Markets such as CME and CBOE offer benefit, as well as the “heightened review” process recently initiated.

The huge number of initiatives, and their regulatory implications, will likely keep us very busy over the coming months.

About avivhandler

Aviv is the Managing Director of ETR Advisory, a niche consultancy focused on the regulation of the commodity, energy and financial markets. He has more than 23 years of experience in the financial, energy and commodity markets, covering regulatory compliance, credit, risk and financial technology. Prior to founding ETR, he was Partner at SunGard Global Services, where he built a Centre of Excellence in European Energy and Commodity Regulation. Before that, he founded Coherence, a consulting firm specializing in credit risk in commodity and energy trading as well as software product management. The credit practice ultimately became part of Sirius Solutions, where he was the Managing Director of Europe. He has also held management roles at KWI and Iris Financial, among other organizations. Mr. Handler holds a degree in computer science from Imperial College, University of London.

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