Summary of the 2018 Fintech-li conference
This is a summary piece of the FinTech.li conference that took place in Schaan, Liechtenstein on 26th September 2018.
In is worth pointing out that this was a FinTech event, rather than a blockchain one. However, given the prominence to which Liechtenstein is rising within the blockchain ecosystem many of the talks and workshops focused upon blockchain technology.
In this piece, I will provide a brief summary of the talks that I believe had the greatest relevance and importance for the evolution of blockchain.
I had to leave early due to the fact that I had to present at the inaugural event of the Polkadot Zürich group.
Event Structure
The morning followed a typical conference format with a series of presentations from various speakers across finance and technology. In the afternoon, the format was that of concurrent workshops. I saw all of the morning talks but only one of the afternoon workshops. For brevity, I’ve omitted most of the talks in this summary.
Morning Presentations
Welcome by Prince Michael
The 4th annual Fintech-li conference was opened with a welcome from Prince Michael.
It was clear that the Prince had an interest and perhaps an excitement for cryptocurrencies and blockchain technology. He spoke of having some understanding of cryptocurrencies, but suggested that he didn’t have the deepest knowledge. However, I did get the impression that he has a deep understanding of markets and financial risk.
He described how companies, and sometimes industries, may rise and fall, and that this was natural part of markets and, implicitly, of societies . It isn’t something to be necessarily fearful of. He noted that as blockchain technology rises in prominence then it may cause troubles for incumbent industries. Of this, he did not seem fearful. Moreover, he didn’t necessarily think that current asset classes will necessarily be replaced, but rather aided by the rise of ‘crypto’.
He noted the positive direction taken in regulation by Zug and by Luxembourg. He said that Liechtenstein are pioneers, and will take a pragmatic approach while having respect for international AML rules. He said that there is a willingness to see crypto succeed.
Building bridges from Liechtenstein to the world — Pablo Coirolo
Pablo was the CEO of Telefonica Data Uruguay, and had worked for Nestle Peru. Now based in Liechtenstein, he is running a business called Light 47.
The speaker contrasted the situations of Europe with that of South America. Drawing particular attention to Liechtenstein and Uruguay (his home country). Given the general difficulty to emigrating to Liechtenstein, he suggested that partnering with great developers in Uruguay ought to be a good way to help blockchain technology flourish.
The speaker pointed out that the most pro-crypto nations in the world have something in common. He highlighted Switzerland, Liechtenstein, Malta, and Gibraltar as the most friendly. He noted that all of them are small nations in Europe and have an open-minded view of regulation, and that there is public support from the government in each of these countries.
He stated the opposite is true of South America. The continent is afraid of change. While there might be 300 people working in blockchain in Uruguay, they can’t get an account opened at a local bank. The solution, he suggests, would be to develop software in Uruguay but to bank in Liechtenstein.
That said, he made a comment about many nations simply faking their embrace of blockchain. Some political parties used blockchain as a means of getting votes. I have heard similar criticism from another acquaintance who warned of many politicians saying the right things to get elected.
Liechtenstein is different. The speaker expounded the country’s desire to have a token economy. One in which tokens are fully integrated into business: a token economy. This certainly sounds true if we confer with the content of the next talk by Thomas Nägele.
The Liechtenstein Blockchain Act / Trusted Technology Law — Thomas Nägele
The speaker is the managing partner at Nägele Attorneys at Law LLC
On twitter, I stated that the speaker’s talk was the most relevant to blockchain. In the following paragraphs I will attempt to outline why I believe this. As you may have heard by now, Liechtenstein has a proposed “Blockchain Act” (Trusted Technology Law). It has been mentioned in several placed such as Coin Desk, Coin Telegraph, and similar news sites. It isn’t yet a law, but rather it has been proposed and requires a vote (of some kind to be enacted).
In short: the law will provide a legal definition of a token. It isn’t a classification of tokens (i.e. there is no mention of security tokens or utility tokens), but rather it gives a legal definition of what a token is.
The proposition is that a token is like a container. This is the so-called Token Container Model. A token would be a new legal instrument that can ‘contain’ rights of all kinds. Otherwise stated, this would provide a legal ability to embody rights within a token. This means that all the rights ‘within’ a token would follow the token and be legally enforceable.
The idea of a container means that tokens are generic. They could contain securities, music license rights, gift certificates, warranties, physical items, and so on. They could even contain nothing, and still be legally recognised as a token.
Tokens can also be traded, legally, and the rights embodied within the token would be transferred to the new owner. Any sale of a token at present would not facilitate the transferral of rights, at least not with any sort of legal guarantee.
For physical items to be tokenised, there is a requirement to have validators. Such people are required to validate that a physical item actually exists, is owned by the purported owned, and can be legally traded along with its inherent rights.
Already these are teams working on putting physical items ‘on the blockchain’, e.g. Mattereum. The company is attempting to “provide the necessary legal-technical interface between the automated transfer of tokenised rights on the blockchain and their enforcement in respect of real world assets.”
Security Tokens — a $10 trillion industry. How it works, what you need to consider — Sascha Ragtschaa
The speaker is the CEO of Own, and has worked for the largest global share registry and transfer agency.
In short, this speaker introduced his company who are creating a security token exchange called ‘Own’. The suggested possible size of the securities market indicates that this is an obvious direction of exploration. Not only does he expect the market to be large, but the decline in IPOs in the stock market could help fuel the ‘crypto’ market.
The Own platform will allow people to trade equities and for companies to raise capital by selling equity. However, the platform is still in beta and that the sales listed on the website are for demonstration purposes only.
The website claims that their exchange uses a purpose-built blockchain for digital share transactions, but in the technical whitepaper the team state that they use Ethereum and Solidity. I have difficulty reconciling those two statements, despite the fact that it does look like there has been a reasonable amount of effort into thinking about the solution. It will be interesting to see how this project develops.
One further interesting piece of information from this talk: according to the speaker, there are very few share registry companies in the world so they effectively have a monopoly on the market. This has allowed such companies to enjoy huge profit margins, but this is something that Own are disrupting by providing free access to their share register.
Afternoon Workshops
Workshop — Trusted Technology Law — Thomas Naegele
This workshop was essentially a deeper dive into the Trusted Technology Law. Rather than explain more about the TTL here in this article, I will defer that to a later article. It is one of the most interesting developments at the moment and should have an entire article to itself.
I missed the second afternoon workshop session as I had to return to Switzerland (cf. Polkadot Zürich).
About me
Currently, I work at the Web3 Foundation, covering numerous responsibilities, but mainly security and communications.
One of the main projects of the foundation is the Polkadot network. A next generation blockchain platform. To read more about the innovation that Polkadot is bringing to the blockchain industry I invite you to read the following blog post: link.
I also set up the first Polkadot fan-site which you can find here: Polkadot Market.
Questions / Comments?
You can create a reply to me here on Medium, or reach out to me on Twitter: @EAThomson.
