This piece in Market Scale is less an article and more a brief overview of a video interview between a fintech exec and the interviewer. The subject of blockchain for use in international transactions as it relates to the various regulatory schemes is relative since that is a key issue in any x-border situation.
We continue to cover this broader payments topic, as well as the blockchain space as one of the innovative schemes for the x-border use case.
‘Fernandez first explained that the biggest hurdles in using blockchain are there are “different rules in different places.” Each country has its own regulations, but it wouldn’t make sense for each one to have its own public blockchain….Instead, Fernandez described the approach as regional. “The regional response for payment transfer is one that respects every jurisdiction but also doesn’t slow down the process. The opportunity is regional coordination in Latin America.”…Fernandez did note that regulators are becoming more aware. “They see the possibility of blockchain speed, efficiency, traceability, and tools available for analytics, forensics, and knowing your transaction.”…The risk, he said, is regulating for today, and that it’s not future-proof. What EOS Costa Rica is doing to avoid this risk is working to build a public permission blockchain backed by IDD, an arm of the World Bank.’
We would suggest opening up the article’s video link, which provides about a 20 minute chit chat between the parties. One of the key points is the tendency towards building various blockchain networks in each sovereign market versus more of a regional approach.
This gets back to the issue of interoperability (or lack thereof) between blockchain networks, and how to best avoid siloing the solutions, which defeats the purpose in the long run.
‘Fernandez mentioned a pilot program using this framework that allows for data sharing between different custom and border patrols. With sensible infrastructures, economic activity between regions will be much easier. He also spoke about the company’s recent project, using blockchain to incentivize blood donation during the pandemic. The program verified blood donors via a blockchain solution with tokens that were usable for discounts or free goods in the community.’
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group