High-Level Officials with Eurasian Governments Handpicked Konstellation (DARC) to Further Blockchain Ambitions
The events described in this post were first publicized in this article in the DailyHODL.
With so much focus on how governments are reacting to blockchain technology in the past week, we thought it’d be interesting to revisit some of our leadership’s activity over the past few months. We at Konstellation have always focused on creating compliant blockchain solutions for our customers. The best way to do that is to talk with the government leadership. We’ve found that most technocrats are quite intrigued by the prospects of blockchain technology. They just need help in understanding the best way to use it. That’s a mutual journey that global blockchain projects need to help regulators with. Over the summer, officials from Konstellation flew, trained, hiked, and taxied all over Europe and Asia in an effort to help government officials to understand the rapidly emerging digital economy. Government officials often lack the same level of exposure to the fast evolving blockchain space that those in the industry are familiar with. In order to fully contemplate the impact blockchain-based technologies will have on their economic future, government-sponsored conferences are a good way to educate, inspire, and network.
What Are the Different Approaches That Different Countries Take Toward Blockchain?
While larger nations have solidified their global economic positions by holding onto giant shares in world trade, some smaller nations have taken bold steps and enjoyed significant success in the blockchain innovation race. Among certain circles, Malta is often referred to as the global capital of crypto. That reputation has led to newfound emergence for the small island nation in other growth sectors such as education, entertainment, governance. Given that blockchain is a game-changing paradigm shift in the long run, in reality this global race for blockchain acceptance and widespread institutional usage has only just begun.
But the larger nations are still very much engaged in a feeling-out process when it comes to blockchain. As we learned last week, when Xi JInping professed a newfound ardor for blockchain technology while the US Congress grilled Facebook about cryptocurrency, government views on our industry move markets. That’s why we get excited when our executives get invited to government soirees to discuss the future of the industry. On the 21st and 22nd of May 2019, Sang Lee, CEO of DarcMatter and Konstellation, was invited by the Luxembourg government to share his thoughts at ICT Spring on how blockchain will revolutionize the massive asset management industry. Sang reflected on the event:
“We at Konstellation feel it is an honor and a privilege to be invited to be a part of their collective enlightenment process. We truly believe that regulation is a good and inevitable outcome. Our goal is to be a part of shaping that digital future.”
ICT Spring is a global technology conference hosting an array of international finance professionals in Luxembourg City in the heart of Europe. This annual two-day event offers participants a unique opportunity to deepen their digital knowledge in hopes of capturing some of the value emerging in the fast-growing global fintech industry. There is also an initiative at the gathering to explore the impact of space technology on terrestrial businesses through exhibitions and demonstrations of the latest tech trends and innovations.
On the 12th and 13th of June, Konstellation’s Blockchain Lead Nicholas Krapels spoke at the First International Symposium on Digital Financial Applications, Security and Regulation. This conference was organized by Yan’an University, China’s Ministry of Commerce (MOFCOM), UMF Technology, the Asia Pacific Institute of Digital Economy (APIDE) and Digital Financial Innovation Research Institute of China Technology Exchange (CTEX).
The themes that were discussed were digital finance development, the application of artificial intelligence (AI) and blockchain technology, their links with traditional industries as well as their security and legal concerns. At the time, Krapels recounted:
“It was two days spent with some of the brightest minds on the cutting edge of digital asset management in Greater China and an honor to get acquainted with the beautiful mountain city of Yan’an, the birthplace of New China.”
At both conferences respectively, Lee and Krapels emphasized the importance of digital asset provenance. In terms of know-your-customer (KYC) and anti-money-laundering (AML) laws all over the world, blockchain technology should actually be seen as a boon to compliance and regulatory concerns. On-chain assets can easily be traced all the way back to their genesis. AI algorithms are already in development that would facilitate this level of tracking. Thus, far from the typical criticisms levied against bitcoin and other digital assets that associate the technology with criminal activity, governments should embrace blockchain due to its ease in tracking the movements of financial assets from one person to another and through one country to another.
Adoption of Asset Tokenization Could Unlock a $425 Billion Opportunity in Compliance
In Luxembourg, our Konstellation CEO Sang Lee further explored the benefits of tokenization, explaining that it will be both an opportunity and a challenge for the financial services industry. However, the subsector that focuses on compliance alone will most likely thrive due to tokenization, claiming that it represents a $425 billion opportunity. It’s expected that compliance costs will take up to 10% of the budget of financial services companies by 2022.
Understanding the difference between two basic types of digital assets, security tokens and utility tokens, could help the financial services industry address these challenges. Security tokens could be used as an investment vehicle that drastically reduce the costs of compliance. Since a means of communication can be embedded into the token itself and traceability facilitates accounting requirements, the distribution of dividends and critical investor data is made much easier. The challenge is to create the technology that ensures that these types of tokens remain compliant with regulations in multiple jurisdictions. And is flexible enough to keep up with the constantly changing laws in each and every jurisdiction.
Utility tokens, on the other hand, are a perfect means to facilitate the consumption of products and services associated with a company or ecosystem. A strong network of participants in a utility-token based economy is necessary. However, the line between those utility tokens as a way to consume and a way to invest is still a bit blurry. That’s why high-level symposiums, like the ones that we describe here, are necessary to provide a method for the transparent exchange of critical concepts and ideas between industry thought leaders and government officials.
Finally, during this event, Mr. Lee met with the head of the industry group Luxembourg for Finance after having also met with them previously at our Seoul offices. The discussion was centered around potential expansion of finance-oriented blockchain businesses in Luxembourg and the potential for Konstellation to augment that ecosystem.
Luxembourg Private Equity Association also attended the event and met with our CEO. They discussed exploring the current landscape of asset management in the area as well as potential opportunities for the Konstellation Network to assist in furthering the reach of global investors as well as making the process much more efficient.
Even if regulations are still a point of concern, DarcMatter and Konstellation believe that the tokenization of assets will be implemented in the near future. We are in the midst of delivering that future to you, our token holders and ecosystem participants!
Stay tuned to all the exciting news we are about to announce related to the Konstellation (DARC) project by following us on your favorite social media platforms:
About Konstellation (DARC):
Konstellation (DARC) will expand the blockchain ecosystem for the massive global financial services industry. Large financial institutions want to start digital assets investment, but there is no existing infrastructure for the creation, storage and distribution of digital assets. DARC is the utility token that powers the Konstellation Network, a hybrid public/private blockchain which will allow for (i) the creation of digital assets, (ii) the seamless and global blockchain-enabled trusted interaction with critical counterparties and (iii) the backbone upon which financial institutions can interact with each other in a transparent, secure and, most importantly, compliant manner. Konstellation had most recently arrived at it’s first major milestone launching the DARCwallet, which will be an important interface for the partners, institutions and token holders to engage the ecosystem (Download available here). DARC tokens are currently traded on exrates.me and P2PB2B.
About Luxembourg Private Equity Association:
Luxembourg has the second highest number of asset managers in the world and is primed to continue to grow as a leader in the global finance industry especially with the anticipated changes in the European region. The Luxembourg Private Equity Assocation (LPEA) plays a leading role in the discussion and development of the investment framework within Luxembourg and actively promotes the industry beyond the country’s borders.
About Luxembourg for Finance:
Luxembourg for Finance is an agency to promote and develop Luxembourg as the ideal European hub for global financial institutions. The agency is a public-private partnership between the government of Luxembourg and the Luxembourg Financial Industry Federation which brings together the various trade bodies of the Luxembourg financial sector, such as the Luxembourg Banker’s Association, the Luxembourg Investment Fund Industry, and the Association of Insurance and Reinsurance Companies in Luxembourg.
About Asia Pacific Institute for Digital Economy:
The Asia Pacific Institute for the Digital Economy (APIDE) is a think tank that seeks to mobilize the academic expertise and institutional resources of 45 major research universities in the region in cooperation with the Association of Pacific Rim Universities (APRU) to promote new Internet-based technologies and policies that are vital to the future growth of the digital economy.