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The Organization for Economic Cooperation and Development (OECD) has been cautiously enthusiastic about blockchain technology for several years. Starting from a 2014 work document entitled "The Bitcoin Question", the intergovernmental organization took into consideration the economic possibilities opened by distributed registers and cryptocurrencies and, on the whole, found these possibilities exciting, even if these documents "do not necessarily reflect the official views of the organization or the governments of its member countries."
But for the most part, reports on "Blockchain Technology and Competition Policy" and "Corporate Governance" – between the other subjects – hit a largely tone "wait and see". They outlined areas where distributed ledger technology (DLP) could potentially offer innovations, but they also stated that institutions should acquire a more complete understanding of DLT and how it works before integrating it into their operations. As the June report on corporate governance concluded, "it might be worth exploring" is the type of phrase often found in such analyzes.
However, this preliminary phase of the evaluation of the OECD of the DLT is coming to an end. On September 4 and 5, he held his first Blockchain Policy Forum in Paris, where a number of public officials and private leaders met to meet, network and, above all, to explore the way blockchain technology It is used by companies and governments. During the two-day conference, dozens of delegates presented a 'wide variety of cases of use of DLT, from self-sovereign identity to competition law. And in the process, they have begun to outline a path to follow for those organizations that have entertained the notion of experimenting with blockchain technology without actually taking that first very important step.
Bitcoins for central bankers
The OECD's first foray into reports and policy recommendations on the blockchain was provided in the June 2014 Working Document, "The Bitcoin Question: Currency Versus Trust- Less Transfer Technology ". Like many mainstream institutions that represent the mainstream global economy, the general position expressed by the author of the report is that Bitcoin is "volatile" and has "an important scalability problem" and that "a reason for being Bitcoin is carrying out activities illegally. "
But as was seen with such detractors of Bitcoin as, for example, Mark Carney and Yanis Varoufakis, the report also sang the praises of the blockchain – as reported to the underlying protocol . According to author Adrian Blundell-Wignall, Special Adviser to the Secretary General of the OECD on Financial Markets:
"[The blockchain] is the key innovation in this technology – that is, a technology that eliminates the the need for a trusted third party and the brokerage costs associated with these institutions (banks, credit card companies, payment companies, non-bank financial intermediaries). "
Expansion on the issue of disintermediation, the Working paper looked at the different benefits blockchain technology – rather than Bitcoin – could be more effective for businesses, institutions and the global economy. Blundell-Wignall wrote, noting that the imposition of regulation could increase costs for cryptographic exchanges and other blockchain-based service providers:
"This technology has the potential to reduce transaction costs for shopping credit cards, e-commerce costs and money transfers, but these companies are also intermediaries and we must not forget that competition in the world of cryptocurrencies is fierce, and decentralized technological innovations can drastically reduce costs. "[19659010] Having noted the scalability problems encountered by Bitcoin at the time (but which are now addressed), the author of the paper praised Ripple as an example of a DLT-based system that allows banks to transfer returned to a fraction of the normal cost and the usual speed and while acknowledging that Ripple may not be the winner "in the race to the cryptocurrency, h in conclusion, advising the member states of the OECD to seriously consider the possibility of looking at comparable, less decentralized and blockchain-based technologies.
"Politicians must focus on how to ensure that new technologies operate at the most socially useful way, that is, it should be possible to use new technology to facilitate the functions of transporter and master medium and increase competition in financial services , eliminating the problems of "anonymity" [of certain cryptocurrencies]. "
Which blockchain?
In short, the working document recommended blockchains not attempting to usurp the power of governments and central banks on a nation's monetary offer, but still retain some aspects of Bitcoin's transparency and efficiency. . and the documents of the OECD have elaborated this "blockchain friendly" approach, with more recent documents that outline particular applications of the DLT.
In June, the management of the Committee on Financial and Corporate Affairs published a document that outlined the implications that blockchain technology would have on competition policy and regulation. Like almost every other report published by or on behalf of the OECD, almost half of the paper was dedicated to the introduction of what is "the blockchain", offering an indication of how public bodies are still very early in their flirtation with the DLT. All right, as if a considerable part of his readers had never heard of either Bitcoin or blockchain:
"The most important example of a blockchain so far is Bitcoin, Bitcoin is a public or unauthorized blockchain , which means that there is no limitation on who can spend Bitcoin or take part in verifying the authenticity of blockages of transactions in the blockchain (an energy-intensive process known as & mining; # 39;). "
To be honest, despite the reconstruction of what must be very familiar terrain for anyone who has even looked at a technology website in the last two years, the document goes on to look at how to update the competition policy in view of the adoption of blockchain. In particular, he stressed the need for a public debate on the opportunity to authorize competition authorities to access blockchains to monitor markets and companies.
"This could enable them to monitor trading prices in real time, detect suspicious trends, and when they investigate a merger, conduct or market, they have immediate access to the necessary data without having to impose burdensome requests for information to the parties. "
It is also interesting to note that the blockchains are used by companies to collude or" tacitly "coordinate" in such a way as to harm competition, perhaps allowing members of a commercial cartel to know when another member has not respected the terms of the cartel and allowing the cartel to inflict punishment accordingly – possibly with the use of contacts.The author of the report, Antonio Capobianco, wrote:
"The potential transparency offered by a blockchain to Market level could also help companies in oligopolistic markets to coordinate tacitly without any direct or indirect contact , or any agreement to that effect. Does a blockchain at the market level constitute a "plus-factor" that the competition authorities might consider that a parallel conduct was the result of coordination between the parties? "
The document also gave specific attention to the use of blockchain to facilitate anticompetitive behavior, on monopolies in the cryptocurrency sector – for example, mining companies, crypto-exchanges – on the definition of technical standards and on the a guarantee of competitive neutrality with respect to subsidies for the adoption of blockchain Together, this attention reveals that the OECD has begun to try its hand at the way blockchain technology will influence businesses, national economies and international trade And even if you do not try to tackle how all this would be technically feasible, deal with the widespread adoption of blockchain technology as if it were an inevitability, something that any startup or corporation that works inside Industry must welcome as an encouraging vote of confidence
It is not just the reports and working documents that the OECD has produced n merit to blockchain. In March, his director of financial and business affairs, Greg Medcraft, gave a presentation at the Digital Meeting of Going Friends of the OECD in Paris. Entitled "The OECD and the Blockchain revolution", he urged politicians to be "proactive and far-sighted" in the way they treat the blockchain from a regulatory point of view and to work closely with "the main stakeholders" – that is, people and groups within industry – on the drafting of appropriate laws and regulations. "This will help us avoid instinctive regulatory reactions and resist the temptation to skip before we fully understand the developments," Medcraft said, while continuing to warn the public about "high-profile asset theft such as Bitcoin and scam Initial Coin Offerings. . "
And apart from the policy recommendations, blockchain technology has received indirect support from the OECD, presenting itself in the" Embracing Innovation in Government "reports for 2017 and 2018. In its 2017 edition, for example, reported on the use of blockchain-based voting in the 2016 Colombian peace referendum (related to the end of the conflict between the rebels of the national government and the revolutionary armed forces of Colombia-popular army [FARC].
"[The] non-profit tech Democracy Earth The Foundation launched a digital process that allowed Colombian expatriates, who could not vote through the process official, the opportunity to participate in a plebiscite on the opportunity or not to approve a peace treaty. This process has raised interesting questions for governments about the future use of blockchain in electoral processes and the public sector more broadly and could potentially lead to new ways to ensure the integrity of the electoral process. "
More or less the same way Other reports published this year have a generally positive attitude towards the DLT In" Blockchain Technology and Corporate Governance "(also published in June), the author – Vedat Akgiray, a professor of finance at the University of Bogazici – focuses on how the DLT is able to make corporate governance more responsible and efficient
"All network users can see trading from managers, activists and raiders business. The legal channels of insider trading are no longer needed. Covert derivatives such as coverage, backdating and similar undesirable actions are almost impossible on a blockchain network. "
In another June work document," Blockchain Technology and its use in the public sector ", Jamie Berryhill, Theo Bourgery and Angela Hanson – all present or former members of the OECD Observatory for Public sector innovation – argue that blockchain technology has the potential to increase automation, efficiency and knowledge within the public sector. In particular, the authors note that " at least 46 countries around the world have launched or are in the planning stages to launch more than 200 blockchain-related initiatives. "
This is another encouraging seal of approval for the adoption of the DLT – and to further strengthen this point, the authors walk through many of the specific areas where blockchains are testifying to use, writing: [19659007] "Almost every sector of the public sector could benefit from blockchain in some way."
Second In the document, these areas include identity, privacy, financial and banking services, land tenure registration, supply chain management and logistics, benefits, public energy services, contractor management, voting, copyright, fraud detection and facilitation of inter-agency transactions
The report is perhaps the most positive and encouraging that the OECD has produced to date, not last because it was written by employees of the organization, rather than by external experts who might not reflect their opinions. ffermano:
"In the future, centralized authorities could become increasingly irrelevant in the context of blockchain technologies, or their role could shift to provide a platform and governance for decentralized services rather than being at the center of every transaction: it is imperative that the public service develop its knowledge in this area and consider its possible applications and how it can influence its role. "
The Blockchain Policy Forum
But while such reports find that the OECD is taking the step to address the specific areas in which blockchain technology can be applied, two points of attention must be made. As a matter of fact, these documents are still often written in fairly general and preliminary terms: the corporate governance report, for example, did not mention any single blockchain that could or could provide the kinds of benefits it outlined in its conclusion, while none of the documents above attempted to unzip the different types of distributed ledger – for example, without permission or permission, proof of work (PoW) or game test (PoS) – and explain what might be useful for certain functions. , the conclusion of the public sector document offers the well-known warning that blockchains have yet to be "understood to include potential solutions a a series of challenges ".
Secondly, these relationships are also quite limited in their number, as only this year four of these articles were published by the OECD, each of which managed a limited area of application. And given that the OECD only has the power to issue model tax conventions, policy recommendations and research documents, its reports have no legal or official force in relation to its member states.
However, the beginning of this month marked something of a turning point on how the OECD considers blockchain technology. On 4 and 5 September he held his first Blockchain Policy Forum – which, as the name suggests, was intended to discuss best practices and constructive policies related to the use of DLTs. As a result, it started with a high-level speech on how blockchain technology can be harnessed to produce "better policies", with OECD Secretary General Angel Gurría providing initial comments, underlining the need of international cooperation and alignment on how blockchain technologies are developed, used and regulated
"Blockchain is a tool and the idea is, to what extent can we make the tool a standard so that, when it is a standard generally accepted, can become part of the normative process – therefore obligatory in the regulations, so that it can serve better for the purposes of politics. "
However, as Gurría has quickly clarified, the enthusiasm of the OECD for blockchain it does not extend to the belief that the DLT is likely to supplant the role of governments and international institutions such as the same:
"But let's not confuse what it's about: once again, the role of the government is in defining politics, and then seeing what they absorb in the regulations, what tools they absorb in the regulations. This is the role of the government and can not be replaced. But once [introduce blockchain] once you have it as a standard and start applying it, then obviously it goes on and on and on. Keep on giving. "
In other words, the OECD views blockchain as a technology that governments can use to improve their efficiency, rather than technology that could theoretically make governments redundant – or at least certain government functions -. the overwhelming majority of the speakers and guests of the Forum were united with Angel Gurría on this point, however they had many encouraging things to say about blockchain technology, with many speakers citing several examples of how DLTs have already been used worldwide. In the same way, many have talked about how the governments they represent have already taken decisive action to promote the development of the blockchain industry, while some have even worked to cultivate cryptocurrencies.
"Now, with the emergence of distributed and digital ledger technology, Bermuda once again demonstrates its ability to be a center of innovation, "said David Burt, Premier of Bermuda, lasts his speech Tuesday morning. "Being the first country in the world to introduce comprehensive legislation on ICOs and digital assets, Bermuda aims to be a model for the world […] In the last nine months, we have achieved the first phase, which includes a solid compliance environment, with legislation for ICOs, digital asset service providers and digital goods banking in Bermuda, our legislation is designed to provide clarity, certainty and consistency, with protections for investors, consumers and service providers. "
David Burt, the Premier of Bermuda
These positive statements were common, with Serbian Prime Minister Ana Brnabić, as well as the Secretary of State of Slovenia, Tadej Slapnik, also explaining to the audience gathered as their respective nations they had already started to benefit from the emergency and the cheating of DLT and crypto. However, as the first day progressed, this initial optimism subsided with the qualifications regarding the limits of what blockchain technology could do and about the legitimacy of Bitcoin and other cryptocurrencies. During a Q & A discussion, David Burt said:
"The challenge is that there [are] so many people believe that this is a technology that can be used for evil." And the question is: change from a politics? perspective, to make sure it's something that can be used forever? And I think this is the most important thing that can come out of the political discussions we're having, is bring us to a place where this mindset can start to change, and people can start talking about Bitcoin, but they can start talking about the different kind of applications that can improve their lives. "
Despite the general excitement surrounding the blockchain technology, this type of stigma cryptocurrency was common. During the "Blockchain at the Frontier of Trust" session of the first day, the moderator, President of the Digital Chamber of Commerce Perianne Boring, asked the audience to participate in a survey, in which participants were asked to respond with the percentage of Bitcoin transactions that they believed were "illicit". As shown in the picture below, 57% of the public believe that from 1% to 25% of BTC transactions are carried out for illegal purposes. Meanwhile, 17% and 10% of the public went to 25% – 50% and 50% – 75% respectively. Only 13 percent of the audience lost 1 percent or less, which Boring revealed to be the correct answer, indicating the gap between perception and reality – even between "enlightened" leaders and experts – when it comes to crypts.
In fact, during the speeches "Blockchain and economics: Global Impacts", Lord Meghnad Desai – Professor Emeritus of Economics at the London School of Economics – presented the family argument that the Bitcoin it's not money. In fact, Desai has also blamed the cryptocurrency for sowing public confusion and concern about blockchains.
"I think calling the first cryptocurrency & # 39; Bitcoin & # 39; was really very damaging, because it looked like it was money, but it's not Money must be a means of payment, a unit of account and a value reserve, it is only a store of value, it is not a means of payment, it is a very expensive means of payment and it is uncertain how we now call [cryptocurrencies] & # 39; token & # 39 ;, originally Bitcoin had been called & # ZenToken & # 39 ;, which I think is my favorite word for Bitcoin, nobody would have worried, nobody would have had these fears about blockchain and all these ghosts. "
Given this semi-hostility towards Bitcoin and other cryptocurrencies, It is not surprising to find that the prevailing definitions of "blockchain" largely separate it from the types of decentralized ledger on which currencies such as Bitcoin are worth.
"So t here are technical differences, but in general language, we generally talk about the blockchain sector as a generic term that includes distributed registers.The blockchains are a subset of distributed master books, the main difference is that instead of updating the transaction of the decentralized ledger by transaction, they do it almost in a batch process […] When people talk about blockchain or talk about DLT, they actually do it, at least in general, like [196590]].
Here, the MD of R3 Charley Cooper pointed out that the OECD and many of its invited guests tend to consider authorized registers, also largely centralized, equivalent to decentralized registers, blockchains without permission.
No panacea
Even forgetting the excessively negative perception of cryptocurrencies in some points, there was still a general, sober recognition throughout the Forum that the DLT it will not be a panacea for the evils of the world. , it was also the recognition that it will not be completely at the height of some of its unique outlets, such as its ability to create relationships, systems and / or etworks.
"The same ledger, or the applications that are built on it, allow you to conduct various types of businesses or other activities without a middle person, without a third party," explained Charley Cooper. "This is without trust, however, trust does not disappear […] you have to trust the software and you have to trust the people who built it […] when you, as an entity, are trying to decide whether to distribute an application or implement a blockchain solution within your organization, is not totally without trust in the sense that you need to be comfortable with the software itself, which has been constructed appropriately and that has been constructed based on the specifications needed for the own entity. "
However, while the first day was characterized by a broad perspective on DLT that concerned it with cautious enthusiasm, the second day saw a higher number of panels and interviews that specifically concerned particular applications of blockchain. From the health, migration, development, financing of SMEs and water to transport, energy, agriculture and infrastructure, the second day witnessed multiple parallel discussions and each one offered clear examples of how blockchain technology is triggered to solve important problems.
with 100 people, six months later we had 10,500 people, another six months later we had over 100,000 people in the system, "explained Bernhard Kowatsch of the World Food Program, who started an initiative last year to use the DLT to process money for – food payments to refugees. "Now, with the 100,000 people we already have on the system, until now we have processed over $ 23 million through the blockchain system so far, which means it's no longer a type of things rather small, of course we take it very seriously. "
And although the first Blockchain Policy Forum did not produce guidelines or concrete proposals on how businesses, institutions and nations should collaborate with DLT, the fact that it took place is an important step for blockchain technology. By providing a platform through which groups and institutions have been able to explain how they have successfully used blockchains to improve their operations and services, the OECD has made it much more likely that other groups and institutions will follow the And with the idea and practice of the spread of blockchain, the prospect of positive standards introduced by the OECD and other governmental organizations – or intergovernmental – is approaching, as well as that of increasing the number. blockchain adoption more broadly.
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