Estonian Metastate Experience for Puerto Rico and Other Territories
The Estonian government is looking for a new way to offer a token-based crowdfunding solution.
More than a year ago, in October 2016, I was at the World Bank headquarters by invitation from the IFC — one of the most interesting and exciting presentations there was a speech by Estonia about the e-Residency project from Kaspar Korjus. It was so inspiring to think that a country considered: why is Estonia just a piece of land on the map, and the Estonians themselves? Why isn’t Estonia a set of values, business conditions, views on the future — and why in this context can’t anyone who shares their values become “Estonian”, wherever they are? It was very cool...
Two extremely visionary and smart guys did it. Taavi Kotka spent four years as Estonia’s chief information officer and was one of the leading public faces of a project known as e-Estonia. At that event Kaspar Korjus from e-Residency project then described the following problems: 1, getting residency and opening a company was easy, but opening a bank account — very difficult. (Most banks in Estonia are not Estonian, and they did not want to change the onboarding rules, even for a state project. Initially, Holvi supported it, but when it was bought out, it almost immediately refused as well.) 2, political pressure on the project began to grow — the local population started to express dissatisfaction with “why so many gifts, privileges, and easements” for non-Estonians, if they are not even planning to move to Estonia and have never been there? Politicians understood that this was foolish — but they needed to win elections, and the anger of the voters… (it is just my own opinion, not a quote)
A BORDERLESS COUNTRY
Taavi Kotka, who spent four years as Estonia’s chief information officer, is one of the leading public faces of a project known as e-Estonia: a coördinated governmental effort to transform the country from a state into a digital society. E-Estonia is the most ambitious project in technological statecraft today, for it includes all members of the government, and alters citizens’ daily lives. The normal services that government is involved with — legislation, voting, education, justice, health care, banking, taxes, policing, and so on — have been digitally linked across one platform, wiring up the nation.
Today, citizens can vote from their laptops and challenge parking tickets from home. They do so through the “once only” policy, which dictates that no single piece of information should be entered twice. Instead of having to “prepare” a loan application, applicants have their data — income, debt, savings — pulled from elsewhere in the system. There’s nothing to fill out in doctors’ waiting rooms, because physicians can access their patients’ medical histories. Estonia’s system is keyed to a chip-I.D. card that reduces typically onerous, integrative processes — such as doing taxes — to quick work.
Estonia is a Baltic country of 1.3 million people and four million hectares, half of which is forest. Its government presents this digitization as a cost-saving efficiency and an equalizing force. Digitizing processes reportedly saves the state two per cent of its G.D.P. a year in salaries and expenses. Since that’s the same amount it pays to meet the nato threshold for protection.
Other benefits have followed. “If everything is digital, and location-independent, you can run a borderless country,” Kotka said. In 2014, the government launched a digital “residency” program, which allows logged-in foreigners to partake of some Estonian services, such as banking, as if they were living in the country. Other measures encourage international startups to put down virtual roots; Estonia has the lowest business-tax rates in the European Union, and has become known for liberal regulations around tech research.
Cointelegraph: Initial Country Offering
“It makes it so that, if one country is not performing as well as another country, people are going to the one that is performing better — competitive governance is what I’m calling it,” Tim Draper, a venture capitalist at the Silicon Valley firm Draper Fisher Jurvetson and one of Estonia’s leading tech boosters, says. “We’re about to go into a very interesting time where a lot of governments can become virtual.”
“This pin code just starts the whole decryption process,” Piperal explained. “I’ll start with my personal data from the population registry.” She gestured toward a box on the screen. “It has my document numbers, my phone number, my e-mail account. Then there’s real estate, the land registry.” Elsewhere, a box included all of her employment information; another contained her traffic records and her car insurance. She pointed at the tax box. “I have no tax debts; otherwise, that would be there. And I’m finishing a master’s at the Tallinn University of Technology, so here” — she pointed to the education box — “I have my student information. If I buy a ticket, the system can verify, automatically, that I’m a student.” She clicked into the education box, and a detailed view came up, listing her previous degrees. “My cat is in the pet registry,” Piperal said proudly, pointing again. “We are done with the vaccines.”
Data aren’t centrally held, thus reducing the chance of Equifax-level breaches. Instead, the government’s data platform, X-Road, links individual servers through end-to-end encrypted pathways, letting information live locally. Your dentist’s practice holds its own data; so does your high school and your bank. When a user requests a piece of information, it is delivered like a boat crossing a canal via locks.
X-Road is appealing due to its rigorous filtering: Piperal’s teachers can enter her grades, but they can’t access her financial history, and even a file that’s accessible to medical specialists can be sealed off from other doctors if Piperal doesn’t want it seen. “I’ll show you a digital health record,” she said, to explain. “A doctor from here” — a file from one clinic — “can see the research that this doctor” — she pointed to another — “does.” She’d locked a third record, from a female-medicine practice, so that no other doctor would be able to see it. A tenet of the Estonian system is that an individual owns all information recorded about him or her. Every time a doctor (or a border guard, a police officer, a banker, or a minister) glances at any of Piperal’s secure data online, that look is recorded and reported. Peeping at another person’s secure data for no reason is a criminal offense.
For doctors, a remote model has been of even greater use. E-ambulance is keyed onto X-Road, and allows paramedics to access patients’ medical records, meaning that the team that arrives for your chest pains will have access to your latest cardiology report and E.C.G. Since 2011, the hospital has also run a telemedicine system — doctoring at a distance — originally for three islands off its coast. There were few medical experts on the islands, so the E.M.S. accepted volunteer paramedics. At a command center at the hospital in Tallinn, a doctor reads data remotely.
The blockchain makes every footprint immediately noticeable, regardless of the source. To guard secrets, K.S.I. is also able to protect information without “seeing” the information itself. But, to deal with a full-scale cyberattack, other safeguards now exist. Earlier this year, the Estonian government created a server closet in Luxembourg, with a backup of its systems. A “data embassy” like this one is built on the same body of international law as a physical embassy, so that the servers and their data are Estonian “soil.” If Tallinn is compromised, whether digitally or physically, Estonia’s locus of control will shift to such mirror sites abroad.
Business and land-registry information is considered public, so Piperal used the system to access the profile of an Estonian politician. “Let’s see his land registry,” she said, pulling up a list of properties. “You can see there are three land plots he has, and this one is located” — she clicked, and a satellite photograph of a sprawling beach house appeared — “on the sea.”
The openness is startling. Finding the business interests of the rich and powerful — a hefty field of journalism in the United States — takes a moment’s research, because every business connection or investment captured in any record in Estonia becomes searchable public information. (An online tool even lets citizens map webs of connection, follow-the-money style.) Traffic stops are illegal in the absence of a moving violation, because officers acquire records from a license-plate scan. Polling-place intimidation is a non-issue if people can vote — and then change their votes, up to the deadline — at home, online. And heat is taken off immigration because, in a borderless society, a resident need not even have visited Estonia in order to work and pay taxes under its dominion.
“Countries are like enterprises,” Taavi Kotka said. “They want to increase the wealth of their own people.” “If countries are competing not only on physical talent moving to their country but also on how to get the best virtual talent connected to their country, it becomes a disruption like the one we have seen in the music industry,” he said. “And it’s basically a zero-cost project, because we already have this infrastructure for our own people.”
The program that resulted is called e-residency, and it permits citizens of another country to become residents of Estonia without ever visiting the place. An e-resident has no leg up at the customs desk, but the program allows individuals to tap into Estonia’s digital services from afar. Tim Draper, who became Estonia’s second e-resident, told: “I thought, Wow! Governments are going to have to compete with each other for us”. So far, twenty-eight thousand people have applied for e-residency, mostly from neighboring countries: Finland and Russia. But Italy and Ukraine follow, and U.K. applications spiked during Brexit. (Many applicants are footloose entrepreneurs or solo venders who want to be based in the E.U.) Because eighty-eight per cent of applicants are men, the United Nations has begun seeking applications for female entrepreneurs in India.
You want to open a business, say; once you have your card, you can go online from wherever you are on the planet, log on to the government portal with your card and PIN, and use it to form your Estonian company, then register with an Estonian bank and start trading. Because the Estonian tax office is digitally linked to Estonian banks, filing your taxes is radically simple — remember the five-minute average from a few paragraphs back? So too is any bureaucracy involved in keeping the company going. After all, these are Estonian digital services we’re talking about: it’s across the web, secured with your ID card.
And that’s the opportunity, because Estonia is working on linking its tax office with its counterparts in other regions of the world. The Estonians want to offer the option for, say, UK citizens to run their UK companies through the Estonian system, which would in turn, in the background, with no extra work for the user, make sure that the UK tax office receives all the money it is legally due. A UK-based entrepreneur, they hope, will decide to open her business in Estonia, use an Estonian bank and pay for some Estonian services, even if the company was only going to be trading in the UK, because she would find Estonia’s national infrastructure far easier to deal with than the UK’s. In other words, a nation is now competing with its neighbours on the basis of the quality of its user interface. Just as you might switch your bank to one with a better mobile app, the Estonians hope you’ll switch your business to a country with an infrastructure that is easier to use.
To be clear, this doesn’t involve actually becoming Estonian, or even physically being in Estonia. There may be only 1.3 million Estonians, but they’re perfectly happy with the arrival of non-nationals. Instead, they’re hoping to spread the ideas of their powerful internet-based services and promote their national brand, in order to coax others to use them from afar. And perhaps also to spread the idea to other countries that such a thing is possible. “We don’t really like to speak to each other in person, so we went and created Skype and all these things,” says Siret Schutting of the government project e-Estonia. “Stuff like this has to be a social right.”
Meanwhile, parliament is designed to be paperless: laws are even signed into effect with a digital signature on the president’s tablet. And every draft law is available to the public to read online, at every stage of the legislative process; a complete breakdown of the substance and authorship of every change offers significant transparency over lobbying and potential corruption. They can be run from anywhere. In the old days, a government in exile would quickly lose legitimacy. Sheltering in another country, it would lack the infrastructure to do its work. But today an Estonian government in exile could just carry on. Fittingly, for a country that founded Skype, the judiciary could fly to the Caribbean, and it would mean nothing more than a series of particularly relaxed case hearings. They could be there today, if they wanted.
It helps to clarify the differences between a nation, a state and a geographical country. These things are already a bit fuzzy, but in general, a nation is a group of people within an area who perceive themselves as being the same type of person; a country is that geographical area itself; and a state is the set of political organisations that those people agree to adhere to. By disconnecting the silicon-based functions of the state from the actual soil-based country, Estonians are protecting their nation from fates that might befall their country.
But it’s more than that. This is all software, and software can be easily, and perfectly, copied. So if the Estonians are successful in their efforts and they can build a digital state infrastructure that can be hosted anywhere, then there’s nothing to say they can’t release the code and let another nation upload a new flag gif, change some of the names in the config file and boot themselves up their own version. It doesn’t have to be an officially recognised state, either: fully realised, this brings down the barrier to entry to effective statehood for the more agile, more entrepreneurial separatist movements, budding caliphates or secessionist offshoots. After all, if we can deterritorialise a state, could we perhaps state-ify a nation?
In 1996, one of the founders of the Electronic Frontier Foundation, John Perry Barlow, wrote a “A Declaration of the Independence of Cyberspace”. A seminal text for its time, it says: “Cyberspace consists of transactions, relationships, and thought itself, arrayed like a standing wave in the web of our communications. Ours is a world that is both everywhere and nowhere, but it is not where bodies live.” When that declaration was made, it seemed outlandish because independence only went to actual nations which had all of the tools of a state. You had to have a parliament building before you could have a parliament. A state needed stuff to be of substance.
But today the Estonians are about to prove the opposite: that a state can go into hibernation. It could be backed up and turned off, reduced to a suitcase full of hard drives, only to boot back up again when the time is right.
To that end, the Estonian government is looking for a new way to offer a token-based crowdfunding solution. This will happen through a state-sponsored initiative known as TokenEST ICO. Although the project has been rumored in the past, it now appears the government will go ahead with it. The TokenEST ICO is designed to raise at least US$30 millio, although it remains to be seen if that is even feasible.
The first question coming to mind is why such an ICO is needed in the first place. A platform of this magnitude could easily be built with state-issued funds, considering it is a state-sponsored effort. At the same time, it goes to show Estonia is willing to think outside the box.
Behind the scenes, we will see the creation of two new organizations: the nonprofit TokenEST SA, and the commercial arm known as TokenEST OU. It is the latter company which will handle all agency operations, whereas the nonprofit will work on strategy, guidelines, and adhering to all rules. It is a pretty interesting project with a proper corporate structure, although it remains to be seen if there will be any interest in the ICO itself when it launches next year.
INITIAL COUNTRY OFFERING
In August, Estonia revealed it was considering the creation of the world’s first national cryptocurrency. Dubbed the estcoin, the digital currency would be part of an ongoing program in Estonia called e-Residency. The goal of that program is to give virtually anyone with access to the internet the ability to establish a business in Estonia without even setting foot in the Baltic state.
In a blog post published on December 18, Estonia’s e-Residency program managing director Kaspar Korjus explained that the e-Residency program is a government startup, and like most of today’s startups, it could be funded through an initial coin offering (ICO). He also outlined three potential use cases for the estcoins the ICO would sell.
The first use case for the estcoin would be as a “community” token. “The community estcoin would be structured to support the objective of growing our new digital nation by incentivizing more people around the world to apply for and make greater use of e-Residency,” wrote Korjus. “This includes encouraging investors and entrepreneurs to use e-Residency as their platform for trusted ICO activity.”
The second use case would be an “identity estcoin.” In this case, the cryptocurrency would allow members of the e-Residency society to do such things as digitally sign documents or log into services safely and securely. These tokens could not be sold or traded — they would be inextricably linked to their owners.
The third use case is the most controversial. The “euro estcoin” would have a value linked to that of the euro, the fiat currency used in Estonia. Korjus claims this estcoin wouldn’t be an alternative to the euro, the creation of which is currently prohibited for any nation within the euro zone, but would instead be a token that combines cryptocurrency’s advantages with the stability of fiat currency.
While Korjus hasn’t set a date for the launch of an estcoin ICO, he did note that cryptocurrency enthusiasts have “expressed enormous interest and largely seemed to welcome the idea” since it was proposed back in August. “Change is coming,” wrote Korjus. “Crypto tokenization will alter the nature of our world whether we act or not, so we must ensure we are taking a lead and that is already happening in Estonia.” If the estcoin does come to fruition, it could provide our first glimpse at a future powered by government-backed crypto.
PUERTO RICO FACES HUGE CHALLENGES
The year 2017 has introduced major changes in the world of digital tokens. More specifically, we have seen a fair few projects take the ICO route, although the SEC is cracking down on some of those projects as we speak. It is evident this industry has a lot of potential, but things may not necessarily evolve in the direction most users would like it to. Then again, thinking outside the box is always an option worth exploring.
A report by the Federal Reserve Bank of New York demonstrates that the movement of Puerto Ricans away from the territory is not merely a consequence of the depression that began just over a decade ago — and is even less due to the current debt crisis — but, instead, is a long-term phenomenon, although the economic decline and debt crisis have exacerbated the migration. The “large outflow of potentially productive workers and taxpayers is an alarming trend that is likely to have profound consequences for the Island for years to come,” concluded the bog post.
From 2000 through 2015, net migration away from the islands, which now have a population of about 3.4 million, was 600,000. Together, migration and natural causes have resulted in the population declining 10% from its peak of more than 3.8 million between 2004 (two years before the depression began) and 2015. It is now lower than it was 25 years ago, according to the analyses. (Economic activity is now back down to its 1993 level.)
The new analysis also clarified that migration away from Puerto Rico is different from the ‘brain drain’ it is often said to be. Those moving tend to have less skills and earnings than those who remain in the islands. They are also younger than the average Puerto Rican. With lower birth rates, this has significantly increased the average age of residents of the territory — and the natural need for social services.
Economic growth in Puerto Rico began to falter in the 1970s. The islands have also been underdeveloped economically compared with the States.
In June 2016, Janet Yellen, who heads the Federal Reserve, told a Senate panel that the U.S. central bank would not rescue Puerto Rico if the territory is unable to pay its bills. She said it was unlikely for the Fed to lend money to the Puerto Rican government, or to give money to banks there if they run into trouble. The government of Puerto Rico is more than $70 billion in debt, and has said it is unlikely to be able to pay back creditors in full.
Even if the Fed didn’t want to lend money to Puerto Rico, some have suggested that the Fed could buy up Puerto Rican debt in order to drive down interest rates there and potentially allow the territory to borrow more money. Yellen told the Senate that she thought the Fed’s ability to buy municipal debt was very limited. The Fed has bought up trillions of dollars in mortgage and Treasury debt since the financial crisis and the Great Recession. So in theory it seems like it would be possible for the Fed to buy up municipal bonds in the same way. But to do so the Fed would have to make the case that buying up Puerto Rican debt would somehow boost the U.S. economy in general. Yellen didn’t seem to think so. She also didn’t seem to think that a Puerto Rican default would have much impact on the U.S. economy in general. “It’s not a matter for the Fed,” Yellen said.
In 2017, less than a week into the massive blackout that followed Hurricane Maria and essentially turned Puerto Rico into a cash-only economy, one top local banker became so concerned about the supply of bills that he called the Federal Reserve. William Dudley, the New York Fed president, put the word out within minutes, and ultimately a jet loaded with an undisclosed amount of cash landed on the stricken island, according to Richard Carrion, the Popular Inc. executive chairman who made the call. He and Chief Executive Officer Ignacio Alvarez reflected on the chaotic early days of the crisis. “We thought the cash was going to be a problem,” said Carrion, 64, whose bank is the biggest in Puerto Rico by deposits. “The magnitude of this is something we haven’t experienced.”
In Puerto Rico, the survivors of Hurricane Maria are desperately scrambling for many of life’s essentials — food, fuel, water. And cash. Banks are closed or running low on money. Many ATMs are flush out of bills. One reason why? There aren’t enough drivers to ferry cash around in armored cars to standalone ATMs. “We cannot transport cash to the ATM that’s off premise if we don’t have enough security to do it,” says Alvarez. That’s not all. Because of widespread power outages, bank branches are functioning on generators. Banks can’t get security software back on line. Bank employees don’t have enough gas for their cars to drive to work. There is no public transportation.
The executives described corporate clients’ urgent requests for hundreds of thousands in cash to meet payrolls, and the challenge of finding enough armored cars to satisfy endless demand at ATMs. The blackout also means that this corner of credit-card dependent America is relearning how to function almost entirely in cash. When some generator-powered ATMs finally opened, lines stretched hours long, with people camping out in beach chairs and holding umbrellas against the sun.
Puerto Rico has had an awful decade — and it’s about to get worse. First came a brutal 10-year recession and financial crisis that drove businesses from this island and left 44 percent of the population impoverished. Then, in September, Hurricane Maria, a powerful Category 4 storm, shredded buildings, wrecked the electrical power grid and possibly led to more than 1,000 deaths.
Now Puerto Rico is bracing for another blow: a housing meltdown that could far surpass the worst of the foreclosure crisis that devastated Phoenix, Las Vegas, Southern California and South Florida in the past decade. If the current numbers hold, Puerto Rico is headed for a foreclosure epidemic that could rival what happened in Detroit, where abandoned homes became almost as plentiful as occupied ones. About one-third of the island’s 425,000 homeowners are behind on their mortgage payments to banks and Wall Street firms that previously bought up distressed mortgages. Tens of thousands have not made payments for months.
HOW FINTECH COULD HELP? WHAT ABOUT CRYPTO VALLEY HERE?
Puerto Rico has had an awful decade and the government of Puerto Rico is more than $70 billion in debt. Recently altcoins’ capitalization was around $500 billion, and now — more than $600 billion. What about ICO for $70B to make “crypto valley” in the United States there?
Puerto Rico became part of the United States following the Spanish American War in 1898, with Commonwealth status introduced in 1952. The residents of Puerto Rico are, therefore, citizens of the United States. There is no Central Bank in Puerto Rico, it is the US Federal Reserve Bank which acts as a Central Bank, determining the receivable interest over loans for the banks which are members and regulates Monetary and Credit Policy. Bank deposits in Puerto Rico are guaranteed up to $100,000 USD by the Federal Deposit Insurance Corporation. Banks are insured by the Federal Deposit Insurance Corporation (FDIC). They are subject to all Federal controls applicable to banks in the United States of America. Commonwealth government supervision of banks is done through the Commissioner of Financial Affairs (Comisionado de Instituciones Financieras). Banks in Puerto Rico are part of the U.S. banking system with a few differences in tax laws. The Office of the Commissioner of Financial Institutions of Puerto Rico supervises and regulates the territory’s financial sector to ensure its safety and soundness, as well as to guarantee strict adherence to all applicable laws and regulations.
Puerto Rico was already struggling before the storm. The island has been in a recession for more than a decade, the poverty rate was 45 per cent and unemployment was around 10 per cent, higher than any U.S. state. Manufacturers of medical equipment and pharmaceuticals, which are the most important segment of the economy, have been shedding jobs for years. Now everything from multinational companies to small businesses and ranches are scrambling to get enough fuel to run generators while their employees struggle to even get to work.
Before the storm, the island’s government was in the midst of bitter negotiations with creditors to restructure a portion of its $73 billion in debt, which the previous governor declared unpayable. Rossello appeared to warn the bondholders that the storm had made things worse. “Puerto Rico practically will have no income for the next month,” he told reporters.
Puerto Rico is struggling to get back to a sense of normality after Hurricanes Irma and Maria dealt the island a devastating one-two punch. Already grappling with serious economic issues before the hurricanes struck, a debt crisis surpassing $70 billion forced the island to file the largest-ever special U.S. municipal bankruptcy earlier this year under a new Congressional law called PROMESA.
Citizens seeking new economic opportunities outside of Puerto Rico has resulted in net negative migration, substantial workforce losses and a shrinking talent pool. What if fintech could be one of the solutions along the island’s path to recovery?
Agile, customer-experience-focused financial technology businesses continue to drive innovation, modernization and access to credit in America’s financial services marketplace when banks and other traditional providers can’t meet consumers’ needs. For example, fintech lenders help consumers and small businesses alike find financial products and services that meet their credit needs, whether it’s a short-term loan for an emergency expense or capital to help grow a small business — even when these applicants have been denied by their banks. No longer the Wild West of several years ago, the fintech landscape has begun to mature and normalize as the Consumer Financial Protection Bureau (CFPB) and the Office of the Comptroller of the Currency (OCC) offer more regulatory certainty and federal guidance, which, if done intelligently, can help these businesses thrive. Many analysts expect an influx of capital to follow this newfound stability.
The fintech sector is a natural fit for Puerto Rico’s entrepreneurs and for the island’s economic and industrial reawakening. Compared to manufacturing, healthcare or other industries, fintech businesses are relatively easy to start and many can operate anywhere with a stable internet connection and remote server access, making it a promising business venture that will allow remote, geographically isolated entrepreneurs to reach consumers regardless of a lack of physical contact.
From a competitive standpoint, Puerto Rico’s Act 20 and Act 22 make the island an attractive place for fintech investment. This initiative allows investors who establish a residence in Puerto Rico a low-tax alternative for doing business. The island’s intent with Acts 20 and 22 is to entice new businesses to locate in Puerto Rico. As a result, San Juan already has a significant banking and investment sector and a promising technology and banking workforce, making Puerto Rico an outstanding choice for fintech startups.
The fintech sector is driving innovation in financial services by meeting the changing demands of American consumers and small businesses. Puerto Rico needs a surge of economic development opportunities following Hurricane Maria, and fintech offers the island what it needs now more than ever as the island rebuilds and resurges.
Altcoins’ capitalization is more than $600 billion, the total funds raised through ICOs — more than $4 billion. No one is waiting for them. The Bubble generation isn’t accepted by traditional banks and most of regulators. Almost all major banks refuse to accept money after the conversion of the cryptocurrency. Various banks and regulators around the world are not too happy about people buying bitcoin and bans ICOs. Maybe crypto-community could help Puerto Rico with their debts, recovery and talent acquisition, and this land could become crypto-friendly in exchange?
The most interesting (and perspective) blockchain-related spheres are strictly outside of the cryptocurrencies’ realm — they include solutions for healthcare and logistics industries, land sale support, governmental and corporate workflow solutions. Estonia, a global leader in e-government, has recently launched a unified medical record database, accessible to hospitals and insurance companies, in partnership with the blockchain startup Guardtime. Prescrypt works along the same lines in partnership with SNS Bank and Deloitte in the Netherlands, BitHealth — in the United States. Swedish government together with ChromaWay and a partner bank is going to test blockchain smart contracts for a land registry, which are to simplify the life of buyers, sellers, and banks, using land as a collateral on regular basis. BitFury launches a similar initiative in Georgia, whereas BitLand enters Ghana and Honduras (and have plans to expand to Nigeria and Kenia). UAE launches Blockchain strategy to become paperless by 2020. The state of Delaware, hosting numerous companies from other states and countries, is to introduce a blockchain-based system of company registration, an issue of shares, recording of Board Resolutions, redistribution of shares as a result of purchase and sales transactions. British Everledger assists banks, insurers and open marketplaces in a reduction of risk and fraud by digitally certifying diamonds, art objects and high-end bottles of wine.
The major fight via crypto\ICOs is not over resources\money, it’s over talent. For example, about a year ago, Japanese financial firms started to discuss about the risk falling behind on the world stage as efforts to adopt blockchain technology that promises to save billions of dollars in backroom processing and revolutionize the finance industry are hamstrung by a dearth of specialists. Consequently, blockchain talent is scarce, and finance houses risk being left behind as global peers pass blockchain savings on to clients. A shortage of talent, however, may delay Japanese finance houses in reaching the same level of competitiveness. The paucity of blockchain experts in particular is partly down to the stunted growth of fintech startups in Japan. Japan has produced relatively few blockchain ventures, and those that have emerged have attracted less funding than global rivals. And now, one year after, Japan became one country that has shown particular enthusiasm for this new paradigm. The government in Tokyo passed a law recognizing bitcoin as legal tender back in April; while just last week, regulators in the country endorsed 11 companies to operate cryptocurrency exchanges. The volume of bitcoin being exchanged with Japanese yen has skyrocketed in recent months — presumably as a result of this high-level acceptance. The broader potential of cryptocurrencies and the blockchain tech that underpins them could serve to boost Japan’s economy. One positive result of this would be greater willingness to use blockchain in settings outside of cryptocurrencies, such as banking and public services. The secure-by-design technology could be used to create a nationwide digital identity system for Japan along the lines of India’s Aadhaar.
Tony Hsieh from Zappos already successfully helped Las Vegas to attract startups\talents\investments (he invested $350 million of his own money to revitalize downtown Las Vegas after the financial crisis) — what about Puerto Rico “Crypto Valley” under his management?
