Blockchain is the talk of the town. At Visa Europe, we’re watching this technology progress very closely. Jonathan Vaux, our Executive Director for Innovation, has explained very clearly some of the barriers to acceptance and addressed some unanswered questions: how will blockchain be regulated? Will start-ups do away with intermediation by the economy’s established players? In short, is the blockchain revolution for real or just a fantasy?
During our Visa France Innovation conference on March 22, we discussed these issues with experts of the French blockchain ecosystem. These were very instructive conversations and now it’s my pleasure to share with you what I learnt.
Discovered in 2015, explored in 2016, deployed in …?
According to Luca Comparini, Blockchain Leader at IBM France, “2015 was the year of discovery and 2016 will be the year of exploration, but not yet of the technology’s massive deployment.” I can only agree. Just a year ago, I tried to organise a conference on blockchain. But I didn’t succeed: I couldn’t find enough French-speaking contributors. Now I see new gems appear every day, particularly in the Fintech industry. We have living proof in Etienne Tatur, the CTO and co-founder of Moneytis – the Booking.com of money transfers. Transforming euros into blockchain and back into local currencies makes for a cheaper, faster money transfer service. Accelerated by a bank, Moneytis is now a partner of choice for established players, thanks to its technological brick.
Beyond Fintech, blockchain is feeding the creativity of entrepreneurs in all sectors of the economy: notarial services (registries),authentication of titles of property, traceability of digital works, hosting of personal data, etc. These initiatives still have to find their markets, but they already demonstrate the technology’s disruptive potential.
Public or private?
The blockchain ecosystem isn’t yet fully structured. I see two major communities facing off. On the one hand, the supporters of a public blockchain want to create a massive, open community of independent developers, where no prior authorisation is required to participate. “Like with the development of open source, we need to achieve a critical mass of sufficiently independent developers for new ideas to emerge,” says Philippe Rodriguez, founding and managing partner of Avolta partners and President of the Bitcoin France Association.
Others argue for the development of a private blockchain. It would enable companies to integrate the technology into their existing, closed systems – protecting users’ identity – and to insert themselves into the public blockchain. “We need to factor in the regulatory environment we operate in, which calls for better control and traceability of transactions,” argues IBM’s Luca Comparini. IBM’s purpose isn’t to revolutionise a company’s operations but to help it gradually integrate this new technology. In the long run, IBM aims to popularise this hybrid system through a “blockchain-as-a-service” platform, a toolbox available on IBM Cloud.
At this point, it’s hard to say what’s the best approach. We’re still in a budding market. This is why public and private-sector players need to work together to explain what’s at stake – and to create offerings that can be delivered at scale.
French public investment house Caisse des Dépôts et Consignations (CDC) has just launched an unprecedented initiative. “Both as a think tank and a do tank, we bring together financial players to work on a model of decentralised technologies. We need to understand what opportunities and new practices it enables, what transformation of the business model it requires, the interoperability of solutions, etc.,” explains Nadia Filali, the project’s co-founder. The CDC aims to play a unifying role in this emerging ecosystem. It has already succeeded in engaging the main banks and insurance companies.
Though the CDC will remain on the domestic market, other consortiums are taking shape on a global scale. In the US, R3 brings together major banks to establish operating standards for blockchain’s operation in the world of finance – like EMV did for credit cards. There’s also the Hyperledger association, an open source blockchain platform that IBM is part of.
Whether it’s by supporting/accelerating start-ups or structuring the system through CDC, France is integrating the blockchain technology in its economic development. Following our conference, I see three major challenges ahead:
- Stakeholders’ ability to establish new operating standards that integrate blockchain
- The evolution of the regulatory framework in the face of this innovation, the implications of which are not yet well known. In this respect, everyone praises the French government for observing rather than regulating and risking to “put the brakes on blockchain innovation,” Philippe Rodriguez says.
- Blockchain governance: who should control practices? Do we need a public/private entity?
We should see the blockchain technology as a fantastic innovation platform to meet and develop some types of needs (P2P money transfers, data archiving, etc.). But it wouldn’t be wise to be systematically opposed to the existing, proven systems. With card payments, for instance, we’re able to manage simultaneously more than 1,800 transactions per second: a completely different scale from the 1 transaction every 7 seconds of the Bitcoin system.
At Visa Europe, like at the main banks, our approach is to join in and to experiment with new practices – alongside blockchain innovators – relying on our Visa Europe Collab innovation hub to understand the technology and identify new markets.
 The experts of the French blockchain ecosystem invited by Visa Europe France were: Luca Comparini, Blockchain Leader, IBM France, Nadia Filali, Head of Mandate and Offering Development, Groupe Caisse des Dépôts, Etienne Tatur, CTO and co-founder of Moneytis and Philippe Rodriguez, Founder and Managing Partner of Avolta Partners and President of the Bitcoins France association.