Singapore satellite cities in India

The Indian government launched its Smart Cities Mission in 2015, with the intention of building 100 new smart cities and more than 6,000 projects. Many of these developments will be in the Delhi Mumbai Industrial Corridor, which is a 620-mile (1,000km) stretch between Delhi and Mumbai. Infrastructure worth $11 billion has already been planned across 33 cities, and much of the development will be funded through a public–private model. The project is expected to attract $90 billion in foreign investment, which will be used to create business parks, manufacturing zones and smart cities, all of which will be situated along a delegated rail freight corridor.

These smart cities are being developed as India’s economy industrializes and the population becomes more urbanized. State intervention in the form of centrally planned cities is necessary in order to prevent the existing cities from becoming overcrowded and unlivable. India is particularly vulnerable to climate change because of its immense and impoverished population. Because of this, it’s important that these cities are sustainable and smart. They need low-energy housing materials, intelligent grids, planned transportation, integrated IT systems, e-governance, and innovative water harvesting.

Singapore is a prime example of an intelligently planned city. Despite the high population density, it has excellent infrastructure and a high quality of life. Many of Singapore’s private organizations have the knowledge and resources that are needed to develop India’s smart cities. In collaboration with the Indian government, the private sector would be able to provide the capital, skills, and technology that are necessary for such large plans.

Andhara Pradesh and the Monetary Authority of Singapore have announced a financial technology (fintech) innovation partnership, with a primary focus on blockchain and digital payments. Singapore aims to develop a marketplace for fintech solutions in India.

Singaporean leadership has shown interest in partnering with India to develop a smart city as well as a new capital for Andhra Pradesh, a state in the southeast. It’s setting up committees to analyze the potential for collaboration in India’s plan to build 100 new cities, as well as further developing the infrastructure across 500 existing towns and cities.

India’s minister of urban development has been in talks with both Singapore’s current prime minister and its former prime minister. He has been seeking Singapore’s expertise in smart cities, particularly focusing on intelligent transport systems, enhanced water management, and e-governance. The minister of urban development has also been examining Singapore’s public housing schemes, as well as their private housing regulations. Funding structures for transport infrastructure have been looked at as well.

Indian authorities have also engaged a team of Singaporean experts to assist the development of a satellite town in Himachal Pradesh. The 49-acre (20-hectare) project aims to help decongest Shimla, a town that has had a massive population rise in the past few decades. The Singaporeans will assist in educational, residential, and commercial aspects of the town under development.

Both Singapore and Malaysia have shown interest in investing in another satellite town near Jathia Devi. The Singaporean government is undertaking a study that will assess various options. The state government of Himachal Pradesh is looking at developing five satellite towns near existing cities, using a private–public funding model.

Singapore’s Ascendas-Singbridge launched its eighth IT park in India. The 59-acre (24-hectare) International Tech Park Gurgaon is expected to have its first building completed in the middle of the year. The $400 million project aims to offer 8 million square feet of business space to help accommodate India’s burgeoning IT sector.

China’s big data problem

Blockchain technology is widely being discussed in China as a way to enhance the reliability of big data. People are looking at it as a way to solve the trust issue involved in sharing data between two or more parties that don’t have aligned incentives. Blockchain technology offers many new solutions to track ownership, origin, and authenticity.

Peernova is a promising U.S. company that is tackling big data problems. It previously focused on Bitcoin mining but pivoted into the blockchain space and raised $4 million from Zhejiang Zhongnan Holdings Groups, a construction company from China. Peernova plans to use blockchain technology to query traditional databases and track changes.

The use cases are to verify any changes to subsets of large data stores and use the more efficient and complete cryptographic audits instead of a traditional auditor to provide a reference point for a company. It hopes to help hedge funds calculate the tax liability of their investments by using blockchain to trace the history of money that has been invested over the years.

Dalian Wanda, the biggest real estate developer in China, is also getting into the blockchain game. It has teamed up with big data software company Cloudera to launch a blockchain project called Hercules. It sees the potential to use blockchain technology to make predictions derived from big data actionable for managers as they’re occurring, moving managers from reactive to proactive in situations like modifications to their protocols, as well as monitor user behavior within their systems.

Dalian Wanda and Cloudera aim to keep developing Hercules and integrate their technology into a variety of industries that rely on IT and big data. Project Hercules will act as an open-source suite that supports the needs of businesses. It makes it easier for organizations to deploy and manage blockchain apps on large data clusters.

You might find it odd to see a digital mining company partner with a traditional construction company to tackle auditing issues for hedge funds, or real estate companies working with big data to solve issues for system administrators, but this is the wild west of the blockchain world. The shortage in blockchain talent and the high demand for blockchain projects and investment are fueling this environment.

London’s early foresight

In 2016, the central government of the United Kingdom put out a report called “Distributed Ledger Technology: Beyond Block Chain” (https://goo.gl/asIz6L), which asserted that distributed ledger technology (blockchains) could be used to reduce corruption, errors, and fraud, and make various processes more efficient. They also stated blockchains could change the relationship of citizens with their government by bringing about more transparency and trustworthiness. But London has been very friendly to the technology since at least 2014. Many early blockchain startups incorporated or worked in London because it was the unofficially safest place to build a business. This was a big deal at that time because many cryptocurrency entrepreneurs were being arrested in 2014 and 2015.

Since this report came out, blockchains have been approved for use across government applications in the UK, including Whitehall departments (non-ministerial departments such as Land Registry, Forestry Commission, and Food Standards), local authorities, and delegated governments.

Here are several interesting projects and experiments that are happening in the UK:

• Blockchain-based welfare distribution: The Department of Work and Pensions has partnered with Barclays, RWE, GovCoin, and the University of London in an experiment that will use blockchain technology to distribute welfare with a phone app. The trial was designed to see if payments could be sent and tracked using blockchain technology.
• Government DLT: Credits, a blockchain platform provider, and the UK government are collaborating on a framework that allows UK government agencies to experiment with blockchain technology. (DLT stands for distributed ledger technology.)
• Blockchain-based international payments: Santander Bank has launched a trial of blockchain-based international payments. The staff pilot program involves an app that connects to Apple Pay. Users can use touch ID to transfer payments of between £10 and £10,000.
• Using blockchain technology to trade gold: The Royal Mint has teamed up with CME Group, a market operator, to use blockchain technology to build a gold market in the hopes of making London a more appealing city for gold sales. Blockchain technology is being adopted by the two entities because they see it as an efficient digital mechanism for trading gold.

These are all experiments to see if blockchain technology is the new platform to exchange value. The success or failure of this scheme will define the future course of the UK and the rest of the world.

The regulatory sandbox of Singapore

Singapore, like the UK, has gone out of its way to make working there as easy, friendly, and financially appealing as possible. In 2015, government officials traveled to San Francisco to announce and recruit entrepreneurs to come work in what they coined a “regulatory sandbox” — a play on the term development sandbox, which is a safe environment where developers can build software. Singapore had the same idea in mind for building software companies.

At that time, blockchain companies in the United States and many other places were still in the gray zone. The idea of a safe place to operate and invest money was very appealing to many entrepreneurs, myself included. If you’ve never been to Singapore, you should go! It’s beautiful, clean, and safe.

Singapore is taking steps to explore the technology, and it’s paying off. A Singaporean bank, OCBC, used blockchain technology for cross-border transfers. It sent money to its subsidiaries, OCBC Malaysia and the Bank of Singapore.

R3 has also been active in Singapore. It opened a lab for researching and developing digital ledger technologies alongside Monetary Authority of Singapore. R3 is working on an exchange to support interbank payments. The banks will deposit cash and be issued a digital currency.

Singapore’s central bank also launched a pilot project, along with eight foreign and local banks as well as the stock exchange. This proof-of-concept project aims to use the blockchain technology for its interbank payments. The pilot project also aims to review cross-border foreign currency transactions.

It’s not just blockchain companies that are going to experiment in Singapore. All the biggest players have gotten involved — Bank of America, Merrill Lynch, IBM, Credit Suisse, The Bank of Tokyo-Mitsubishi UFJ Ltd, DBS Bank Ltd, JP Morgan, The Hong Kong and Shanghai Banking Corp Ltd, OCBC Bank, United Overseas Bank, and the Singapore Exchange.

Every bank in the world must know who it’s doing business with. The whole idea of Know Your Customer (KYC) helps combat money laundering and tourist funding.

The next phase will be determining foreign currency transactions and building on Singapore’s KYC efforts. This could lead to the country forging the way in blockchain-based identity. Singapore already has a robust and modern digital identity system that could easily be connected to a blockchain.

The Dubai 2020 initiative

The government of Dubai had an ambitious plan to move all government documents and systems onto the blockchain by 2020. The scheme to go paperless was part of its initiative to become a global leader in blockchain technology and boost efficiency across all sectors.

The Minister of Cabinet Affairs and the Future detailed how the new scheme will enable users to update and verify their credentials through the blockchain. They’ll only have to log in with their credentials once to have access to both government and private entities, such as insurance companies and banks. They also anticipate sharing their technology with other countries to allow simpler border crossings. Instead of passports, travelers could use pre-authenticated digital wallets, as well as pre-approved identification.

The Dubai government has estimated that its blockchain initiative has the potential to save 25.1 million hours in productivity. This boost in efficiency will also help to cut back on carbon emissions.

Dubai’s Global Blockchain Council (GBC) announced seven new public-private collaborations, combining the skills and resources of startups, local businesses, and government departments. They’ll apply blockchain technology to the following:

• Healthcare: The Estonian software company, Guardtime, will collaborate with one of Dubai’s largest telecom operators, Du, to provide the technological expertise for digitizing healthcare records and moving them to the blockchain.
• The diamond trade: A pilot project will use blockchain technology for the authentication and transfer of diamonds. The Dubai Multi Commodities Center will be digitize Kimberly certificates (documents created by the UN to restrict the trade of conflict diamonds).
• Title transfers: Title transfers will be digitized and recorded on a blockchain. A Singaporean blockchain startup known as Dxmarkets has developed a proof-of-concept.
• Business registration: The GBC is trialing the use of blockchain technology for business registration. This is different from the decentralized autonomous organization (DAO) of Ethereum but could streamline identity verification through the Flexi Desk program. It’s currently in the demo stage, with several entities working on a proof-of-concept.
• Tourism: Dubai Points is a pilot program that was launched in collaboration with Loyyal, using blockchain technology to help the tourism industry. It aims to incentivize travel by granting points to travelers who visit certain places. It will use smart contracts to facilitate the rewards. These points may work like a crypto token and be tradable an exchanges.
• Shipping: IBM is working with the GBC to use blockchain technology for improved shipping and logistics. The program aims to help regional players to collaborate on how they exchange goods. Smart contracts will be utilized as solutions for compliance and settlement issues.

Dubai, like Singapore, has put its money and talent into insuring that it will dominate the blockchain space quickly. This is one luxury of small government and central authority.

Bitlicense regulatory framework: New York City

If you’re planning on operating a blockchain startup in New York City, plan for extra fees. In June 2015, the New York State Department of Financial Services (NYDFS) put out the final version of Bitlicense, the regulatory framework for digital currency aimed to give the industry more clarity. In reality, it pushed many blockchain startups out of NYC. The license itself costs $5,000 and can be up to 500 pages. It requires the fingerprints of each company’s leaders and an extensive background check on the applying businesses. The chief complaint is the roughly $100,000 in expenses associated with the application. This estimate includes time allocation, legal, and compliance fees. Bitlicense is in stark contrast to the efforts made by other financial centers such as London, Singapore, and Dubai.

The final Bitlicense was the result of almost two years of research and debate over how the technology should be regulated. It came about after it was deemed that the existing regulations were not suitable for digital currency companies.

On a positive note, NYC blockchain businesses no longer need approval from the NYDFS for new software updates or further rounds of venture capital funding. The framework states that digital currency firms only need approval for changes that are “proposed to an existing product, service, or activity that may cause such product, service, or activity to be materially different from that previously listed on the application for licensing by the superintendent.”

The first company to receive a Bitlicense was Circle, the Bitcoin wallet providers. The license allows them to operate in New York under the regulatory framework. Circle is one of the few companies that can legally do so. Most blockchain startups are avoiding working in New York because the cost and effort of the license outweigh the benefit. Only the highest-funded startups are making an effort.

Ripple has been awarded its second license. This iteration of their license has allowed it to sell and hold XRP, which is the digital asset behind the Ripple Consensus Ledger (RCL). It will enhance Ripple’s ability to deal with business customers who want to use its technology for international funds transfers.

Other U.S. regions have also put up similar bills to regulate digital currency and require licensing. California bill AB 1326, would have done that for the region but failed after the Electronic Frontier Foundation (EFF) was able to oppose it. (The EFF is a group based in San Francisco that defends consumer rights and new technology.)

Although New York City was early to regulate, it has been a difficult and dangerous place for blockchain-based companies to operate. NYC has banned some new financial products that were too competitive for traditional institutions, such as interest-bearing crypto accounts that often averaged 8 percent. It also levied a $100 million fine against BlockFi, a leading custodian of crypto accounts, destroying a once-promising fintech company.

Friendly legal structure of Malta

European Union member country Malta has taken drastic and direct steps to embrace blockchain technology. Moving much more quickly than other nations, Malta saw the potential of blockchain and took steps to secure itself as a hub for innovation. Most blockchain startups have faced a hostile environment, so many — including the mega-exchange Binance — have flocked to Malta to set up business.

After the United Kingdom exits the EU, Malta will be one of the few countries left in the EU that has English as an official language. Malta is also governed by continental law and common law, which makes them more favorable to business. This has positioned Malta well to support international blockchain and cryptocurrency-related companies that want to incorporate and have a legal structure.

Malta is a small island that has seen many different ruling regimes. Each established their own rules and some of them have stuck. Malta has a mixed legal framework now that includes Roman law, French law, British law, and their own laws enacted by the Maltese parliament after the 1964 Independence. But they are mostly known for civil or continental law (which has been codified over the years) and common law (which is established through court rulings).

Malta has passed two groundbreaking acts and one bill that have shifted the conversation around legal standing for blockchain companies, offering legal protection and a framework that more accurately governs distributed technology, blockchains, and all the innovation that has grown out of them. Here’s a summary of these three pieces of legislation:

• Virtual Financial Assets Act: The Virtual Financial Assets Act regulates initial coin offerings (ICOs). The law requires any company raising capital through an ICO to publish a white paper giving a detailed description of the whole project. The ICO must also make the company’s financial history public.
• Malta Digital Innovation Authority Act: The Malta Digital Innovation Authority Act creates regulatory procedures for cryptocurrency and the blockchain companies. It also establishes a regulatory body called the Malta Digital Innovation Authority (MDIA).
• Technology Arrangements and Services Bill: The Technology Arrangements and Services Bill allows blockchain companies and cryptocurrency exchanges to register and be certified by the Malta government.

These new acts and bill have opened Malta to new technology and will possibly be used as an example by other governments that also hope to attract innovation. The greatest benefit is giving companies a safe place to grow and experiment within known parameters.

The Department of Homeland Security and the identity of things

The Department of Homeland Security under the Science and Technology Directorate explored securing IoT devices for the U.S. borders. It has worked with now-defunct Factom, Inc., an Austin, Texas–based blockchain startup to advance the security of digital identity for IoT devices.

Factom created identity logs that capture the ID of a device, who manufactured it, lists of available updates, known security issues, and granted authorities while adding the dimension of time for added security. The goal is to limit would-be hackers’ abilities to corrupt the past records for a device, making it harder to spoof.

Passports of the future

ShoCard (www.shocard.com) is an application development company that is working with the blockchain company Blockcypher. It has built prototypes that allow you to establish your identity within a secure blockchain environment. ShoCard ID lives on an app on your phone and can be used to share all different kinds of credentials securely.

The new feeder document

You may not have heard of Smartrac, but it’s more than likely that you touch a piece of its technology every day. Smartrac is the number-one provider of radio-frequency identification (RFID) tags and other identification chips that live inside of things like passports and ID cards.

One of the largest challenges that countries face while fighting identity fraud is in the authentication of the underlying documents used to build identities. These are things like Social Security cards, birth certificates, and diplomas, which are currently easy and cheap to knock off.

Smartrac has been battling this problem with more and more sophisticated technology. Its latest innovation, dLoc, is a software authentication solution that allows feeder documents to be checked against a blockchain record.

Document data is married to a unique ID of the near-field communication tag (NFC) to create a 32-bit hash value, which is only recognizable by the issuing agency using a private key. The hash value is stored in Smart Cosmos and backed up in a public blockchain. After that has happened, the document with the dLoc sticker can be verified using a desktop reader or a mobile app on an NFC-enabled phone.

What this does is create two amazing things that have never been possible with paper documents:

• An unalterable history of the document, showing its true age and ownership.
• Allowing certificate authorities to sign for the authenticity of a document cryptographically. So, even if the underlying paper used to create documents was stolen, it would not be adequately signed, or if a document was taken after it was issued, it could be marked as a stolen document.