Google’s Parent Company, Alphabet, Is Developing Blockchain-Based Solutions for its Cloud

According to people familiar with the situation, Alphabet Inc., Google’s parent company, is developing its own blockchain-based distributed digital ledger that third parties can use to post and verify transactions.

Several people in Google’s infrastructure group, which reports to cloud chief Diane Greene, have been working with blockchain protocols in recent months, according to another person familiar with the company. Other Google insiders have recently pointed out that the cloud business is a natural place for blockchain-related services.

It’s certainly not a surprise Google is interested: the market for blockchain products and services is expected to grow from $706 million last year to more than $60 billion in 2024, according to WinterGreen Research.


As of late, the internet giant has been acquiring and investing in startups with digital ledger expertise. Many of these deals haven’t been announced, the sources noted. Still, Alphabet was a leading corporate investor in the field last year, ahead of Bank of America, Citigroup Inc., and Goldman Sachs Group Inc., according to research firm CB Insights. 

Although the timing of any product release is unclear, the company plans to offer this blockchain service to differentiate its cloud service from rivals. It will also provide a “white-label” version that other companies can run on their own servers. Those who spoke about these developments asked not to be identified because the company isn’t ready to make an announcement yet.

“Like many new technologies, we have individuals in various teams exploring potential uses of blockchain but it’s way too early for us to speculate about any possible uses or plans,” a Google spokesman said.

Blockchain-based Google Cloud

It was in 2016 that Google started a trial for developers testing blockchain services on its cloud. The company is now exploring much more expansive ways to deploy the technology, the people said.

To build its ledger, Google has looked at technology from the Hyperledger consortium, but it could opt for another variant that may be easier to scale to run millions of transactions: Sridhar Ramaswamy, Google’s advertising chief, said at a recent conference that his division has a “small team” looking at blockchain, but noted the existing core technology can’t handle a lot of transactions quickly.

Traditionally, when Alphabet wants to keep up with emerging technology, it often backs startups in the field and makes small acquisitions to recruit talent. So far, GV — Alphabet’s venture capital arm — has invested in wallet service Blockchain Luxembourg, financial transactions network Ripple, cryptocurrency asset management platform LedgerX, and international payments provider Veem, according to CB Insights.

“You’re going to see an unbelievable amount of R&D expenditures go into this,” said Jeff Richards, a managing partner at venture firm GGV Capital. “Everybody learned from the internet and mobile that you can’t afford to wait.”

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Yesterday, Credit Suisse and ING Group completed a 25 million euro ($30.48 million) securities lending transaction using blockchain-based software. The transaction involved the banks swapping baskets of securities through an application from fintech company HQLAx, which was built with a blockchain created by bank consortium R3.

The trade was one of the first examples of a capital markets transaction made possible through blockchain, a distributed ledger that is maintained by a network of computers on the internet. It’s a great move forward for the industry, highlighting the real-world possibilities of blockchain technologies that have faced some skepticism from traditionalists.

By the end of the year the companies expect the application to be live, according to Herve Francois, a blockchain initiative lead at ING. Using blockchain could help make the securities lending process faster and more capital efficient.

“This was far more than a proof of concept in a fenced lab,” Charley Cooper, a managing director at R3, said. “These are regulated institutions in a real market and it is a unique demonstration that blockchain solutions are being deployed in commercial settings.”

Securities Lending

Across the globe, banks have invested millions in developing blockchain applications in the hopes that it can help cut costs and simplify processes like the settlement of securities trades. While many financial institutions have announced developments and experiments using blockchain, the technology is still in its early days and few of these applications are live — though 2018 may be the year that changes.

Typically, securities in securities lending are moved from one account to another. In the new method, digital collateral records are used to transfer ownership of baskets of securities without having to move the underlying securities from one custodian to another. 

Normally, this process takes days; With this blockchain application the settlement is instantaneous. The hope is that this technology will not only help market participants redistribute liquidity more effectively and more cost-efficiently, but also that it will enhance regulatory transparency of collateral chains and mitigate risk by enabling orderly default unwinds.

“The platform gives us an opportunity to make balance sheet and capital usage much more efficient and timely,” Emmanuel Aidoo, head of distributed ledger and blockchain strategy at Credit Suisse said.

Banks have increasingly been joining forces and joining consortia to experiment with blockchain. New York-based R3 is one of the largest consortia in blockchain, with a network of more than 100 financial institutions. It developed a type of blockchain designed for financial transactions called Corda, which was used to build the securities lending application.

“The time has come to hold the crypto-asset ecosystem to the same standards as the rest of the financial system,” Mark Carney, the governor of the Bank of England (BOE), said today in an interview at Bloomberg’s European headquarters in London. Carney, who also heads the Financial Stability Board — an international financial regulator — joins a growing number of industry insiders calling for greater oversight of cryptocurrencies.

Carney noted that the coins have “extreme volatility,” and said it reflected a lack of any intrinsic value or external backing, saying digital currencies themselves have failed as a form of money because of this volatility. He also rejected the prospect of a central bank digital currency in the near future. Even so, he reiterated that the BOE remains open-minded about the possibility sometime in the future.

Still, the answer isn’t to isolate or outlaw digital currencies, he said. “A better path would be to regulate elements of the crypto-asset ecosystem to combat illicit activities, promote market integrity, and protect the safety and soundness of the financial system.”

“It does point the way in many respects to the future of money,” Carney said, adding that “this generation of cryptocurrency is not the answer.” 

Carney talked about how bringing crypto-assets into the regulatory tent could potentially catalyze innovations to serve the public better banking-wise. As for the crypto-industry, he asserts that regulation is necessary and will mean that the best cryptocurrencies will be drawn to properly regulated exchanges, and weaker ones will, in turn, fall to the side.

Moving forward

In the interview, Carney says that he believes the best financial institutions can see the direction payment systems are going in. He says that these banks will be making a lot less money in the future as payment systems move in the cryptocurrency direction, permitting people to instantly move money from one account to another, to another.

He uses the analogy of a pub: I pay you, you pay the pub owner, and the pub owner pays the supplier, instantaneously and cheap, through blockchain. He talked up the potential of underlying blockchain or distributed ledger technology to improve accuracy, efficiency, and security across payments, clearing, and settlement.

Carney endorsed the push by the U.S. Securities and Exchange Commission to classify cryptocurrencies as securities, subject to laws governing how they are issued and traded. The SEC, concerned that initial coin offerings are fraught with fraud, has taken a keen interest in cryptocurrency providers. In recent weeks, the agency sent subpoenas to dozens of companies running ICOs, demanding for information related to their businesses. Across the U.S., states are making moves, too, like Texas, whose securities board has issued several emergency cease-and-desist orders this year. 

Kenya’s President Uhuru Kenyatta has ordered the Ministry of Information and Communication Technology (ICT) to a create a task force that will focus on how the country can leverage blockchain technology and the Internet of Things (IoT). Kenya is the most recent African country to publicly support blockchain and associated technologies. The use of cryptocurrencies on the continent has been increasing exponentially — in particular for those who don’t have access to the traditional banking systems.

Speaking at Africa’s Digital Symposium, Kenyatta said technologies such as blockchain will be a major driver for delivering his “Big Four” priorities — manufacturing, affordable housing, universal healthcare, and a food security plan — for growing the country’s economy. The digital revolution will help Kenya achieve the plan and ensure that growth transforms the lives of the people, he said.

“Digital technology will also support efforts to increase food security by playing a key role in agricultural value chains through better access to inputs, more reliable weather and crop information, tracking of counterfeit inputs, more transparent access to markets, and fair pricing,” Kenyatta said. “Digital technology also underpins a range of agro-financing services that are essential for equipping smallholder farmers across the country.”

The move is expected to create jobs and spur Kenya’s manufacturing sector from 9% to 15% of Gross Domestic Product. The 11 member team on Distributed Ledgers and Artificial Intelligence will be chaired by former permanent secretary Bitange Ndemo, and will recommend various technologies for use in solving Kenya’s intermediate problems.

Kenyatta said the task force will, more generally, study the benefits and challenges associated with blockchain and IoT: “We need to better understand the opportunities for blockchain technology, the risks of cybersecurity, and the essential education and skills that our young people will need to make new technology work for them,” he said.


The Government’s Distributed Ledgers and Artificial Intelligence team is working on a blockchain database aimed at weeding out fake title deeds from the land registry. Known as the single source of truth (SSOT), the database will be the primary reference for all land transactions. ICT Cabinet Secretary Joe Mucheru said SSOT would ride on blockchain technology, so if land changes hands, that change of ownership is underwritten by all the institutions in the system. 

“At the moment, there are people who come up with fake title deeds and all manner of things. We need to create a single source of truth, which we are already working on as a government,” Mucheru said.

The SSOT would also extend to verifying ownership of other documents, including birth certificates, driving licenses, and marriage certificates. These applications should go a long way in creating efficiency and transparency — which are critical components of President Uhuru Kenyatta’s “Big Four” agenda.

Delaware, one of the hottest jurisdictions for incorporating companies, and the home to some of the leading corporates plans to streamline corporate governance by promoting blockchain adoption. According to a regional media outlet, the Delaware General Assembly could soon make necessary amendments to the state’s corporate law, facilitating the inclusion of distributed ledger technology for keeping track of stock owners.

The plan to promote the adoption of blockchain technology among companies dates back to May 2016, following the proposal of the then-Governor Jack Markell. Last year Markell had explained that the state has to create a favorable regulatory environment for blockchain technology and businesses. Based on his inputs, the draft proposal for amending existing Delaware General Corporation Law was taken up by the Delaware Bar Association.

The proposal, if implemented will allow companies to legally introduce distributed ledger technology to issue and record the transactions of shares. Such an implementation is expected to bring in transparency as well as accountability to the stocks issuing process.

In addition to bringing in transparency to the corporate structures, the new regulatory policy will also help the state retain the position of being the most desirable destination for incorporation. The state currently gains revenue in tune of $1.4 billion through business incorporation fees and other taxes. In the recent days, Delaware is faced with competition from other offshore jurisdictions, which have turned out to be more attractive for businesses due to various reasons.

Innovation is one possible way for Delaware to not only strengthen its position as a favorable place for incorporation of companies, but it will also give rise to a whole new sector. Promotion of blockchain technology will see more companies working in the area to not only create solutions for the newly-created need for such technology, but it will also encourage them to set up their base in Delaware.

The increasing attention towards blockchain and financial technology solutions in the global market will put Delaware on the map of fintech and blockchain hubs.

Ref: DelawareOnline | Image: NewsBTC

The European countries have a mixed reaction towards Bitcoin. The rate of Bitcoin adoption varies among countries in the continent. The same can be said about the governments and the respective central banks’ stance towards the digital currency. Ukraine is among one of the few nations to have a supportive cryptocurrency ecosystem. Even the major banking institutions in Ukraine have started accepting Bitcoin payments through their merchant solutions.

In a first, Alexei Mushak — a member of the Ukrainian parliament became the only politician in the country to declare Bitcoin as assets. The electronic wealth and asset declaration form was filled by Mushak in compliance with the European nation’s new anti-corruption rules. According to his declaration, Mushak possesses a total of 465 BTCs worth about $325,000 at press time.

Alexei Mushak’s declaration of his cryptocurrency savings along with fiat and other immovable assets shows the increasing awareness and openness about digital currency among the country’s ruling class. His declaration follows the recent parliamentary discussion about the legalization of Bitcoin and other digital currencies in the country.

In addition to cryptocurrency, Ukraine is also seeing a huge movement toward the use of Bitcoin’s underlying distributed ledger technology. The county’s central bank — National Bank of Ukraine is currently working on the development of blockchain applications for its Cashless Economy project. Owing to the popularity of the cryptocurrency technology, few notable startups with innovative ideas have cropped up in the region as well.

Currently, the largest private bank in the country — Privatbank allows users to make Bitcoin payments on its Allo service. Ukraine is also playing host to various cryptocurrency, blockchain, and cyber security conferences. Last month, the Bitcoin Conference that attracted cryptocurrency and payments companies from across the world was organized in Kiev. The country’s Ministry of Finance is also reported to have started exploring the use of blockchain technology to reduce corruption, especially when it comes to government transactions.

All these factors offer a brief picture of the country’s successful foray into the cryptocurrency sector.

Ref: Forklog | NewsBTC | Image: Shutterstock.

Everyone active in the world of blockchain is well aware of how major banks take a vested interest in this technology. Up until this point, very few of those projects have created something useful. But Commonwealth Bank of Australia and Wells Fargo completed an international trade using distributed ledgers. Several different applications were used in the process.

This collaboration between these two global banks and Brighann Cotton Marketing is quite an intriguing one. By using blockchain tech to buy a cotton shipment, a very real use case has been identified. A total of 88 bales were traded, with US$35,000. Settling the transaction itself took mere seconds, rather than weeks.

Trading Cotton On The Blockchain

Commonwealth Bank of Australia has been a proponent of distributed ledgers for some time now. The institution feels trade finance processes are ripe for disruption. At the same time, they are actively developing proofs of concept to demonstrate what the technology can do.

Although this is not the first transaction using a decentralized database, it is a significant milestone. Traditional banking has taken a wait-and-see approach when it comes to blockchain for far too long. This proof of concept goes to show the technology is more than viable in the financial sector.

Even though most major banks are part of the R3 consortium, some institutions prefer to look into these matters at their own pace as well. Harnessing the speed and accuracy of distributed ledgers is the top priority for the time being. Since this technology can remove the human element from transaction processing, there is a lot of time to be gained.

It is rather significant the R3 blockchain consortium did not play a part in this proof of concept whatsoever. Even though both banks are part of this group, the proof of concept was developed on their own accord. For now, it remains unclear which blockchain provider they used to complete the trade.

The cotton shipment in question finds itself between Hong Kong and Singapore as we speak. The arrival of the vessel is expected in early November. With the financial part of the equation taken care of already, the rest of this transaction should not cause any issues. That being said, there are still some regulatory concerns regarding this technology that need to be addressed.

Source: Reuters

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There are many different opinions on blockchain technology and how viable this technology seems to be right now. Some people are even arguing blockchain development is funded by dumb money. With over uS$250m invested this year alone, the time to deliver on distributed ledgers is now. But is the investment itself justifiable, or are investors getting caught up in all of the hype?

It has to be said, just about everyone in the world seems to invest in blockchain technology these days. The technology certainly has the potential to shake up the financial system in the coming years. But for now, most of these initiatives seem to focus on creating a more efficient system for participants rather than look at the bigger picture. No amount of dumb money will be able to solve that problem overnight.

Dumb Money Won’t Make Things Work Out Of The Blue

To put this into perspective, take a look at what ACI is trying to accomplish. The company announced their plans to create blockchain-based solutions appealing to central banks all over the world. Their network would run on a total of five nodes, which would only allow for minimal information sharing. While a commendable effort, it will only do good for select parties, rather than disrupt finance as a whole.

Building blockchain solutions is not cheap by any means. However, if every group of bank develops their own proprietary technology, the question becomes how these tools are supposed to communicate. Financial institutions doing their own thing will not address the problems faced by the sector right now. Instead, a fragmented ecosystem of private blockchains is created, rather than using industry standards.

But there are other potential drawbacks to take into consideration as well. Overcoming technical hurdles is often overlooked when big money is being thrown at the next distributed ledger technology vendor that comes along. Coming up with platforms that can handle several thousand transactions per second is not easy. If an open industry standard were to be used, this problem would have been addressed ages ago.

At the same time, it remains to be seen how quickly banks will adopt this technology. Some experts say that is still five to ten years away, whereas others predict significant changes before the end of 2017. The first institution to jump the gun may find themselves at an advantage. Then again, the first-mover advantage presented by blockchain technology has yet to be proven in a real-life environment.

One thing investors need to keep in mind is how throwing dumb money at a concept will not make it work automatically. Blockchain technology is hard to grasp, let alone master. It will take a lot of time and effort to develop viable solutions which can be deployed in a real environment. That also means there is a need for funding, even though not all of these initiatives will succeed in the end.

Source: Bank Innovation

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Blockchain technology is being explored by many financial service providers all over the world right now. Over in India, the first-ever blockchain transaction has been successfully completed. ICICI Bank, one of the country’s largest private banks, conducted several transactions using this technology. In doing so, they became the first Indian bank to publicly acknowledge success in the world of distributed ledgers.

As one would come to expect from such an announcement, a proprietary blockchain is used for these transactions. Together with EdgeVerve Systems, ICICI Bank completed transactions with an import-export firm in Mumbai. They also tested money remittance between Mumbai and an Emirates NBD branch. Both tests were deemed a great success.

ICICI Bank Reaches Blockchain Milestone

Although these were only two small tests, ICICI Bank remains very keen on exploring further possibilities. In fact, there are plans to expand their private blockchain ecosystem and establish working standards. Commercial adoption of such an initiative is the top priority, after all. For now, it is anybody’s guess as to what the Indian bank may try to accomplish next.

Since blockchain technology makes it cheap and easy to send immutable data and information all over the world in seconds, this field trial was only a matter of time. Moreover, the information related to these transactions is shared across multiple parties, removing any central point of failure where data storage is concerned.

Moving money takes a lot of time and effort these days. Even though consumers and enterprises only see banking as “digital accounting”, a lot of work is done behind the scenes. By embracing distributed ledgers, most of these processes can be automated. More importantly, no one has ever successfully hacked a blockchain, making it the most secure technology for financial transactions to date.

As India is warming up to Bitcoin as of late, venturing into the blockchain world is another validation of this technology. ICICI Bank CEO Chanda Kochhar mentioned how a future where “blockchain technology will play a significant role in banking” is not out of the question.

Blockchain technology has been enjoying increased interest from banks all over the world in recent years. Although the technology became popular thanks to Bitcoin, financial institutions are looking to create their own permissioned iterations of a blockchain. Integrating these new developments into existing bank infrastructure will remain a challenge, though.

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The most prominent topic of speculation this year has been blockchain technology. While the advantages of this concept are easy to see for everyone, there is still a fear of overhyping the possibilities. In most cases, developing of blockchain technology encompasses mostly talk, rather than actual projects. Until use cases have been tested and made available on a large scale, overselling enterprise benefits of blockchain should be avoided at all costs.

Every company and their dog seem to be developing a blockchain prototype right now. While it is true distributed ledgers hold a lot of promise, primarily for the financial sector, it’s real-life use cases remain to be determined. Right now, we find ourselves in the “hype stage” of blockchain development, where people promise the sun of the moon without knowing if they can deliver.

Blockchain Technology Is Suffering From Overhyping

There is nothing wrong with being passionate about exciting technology, though. Without advertising distributed ledgers at every given turn, hardly anyone will take notice of this technology. But there is a fine line to walk between promoting something, and beating a dead horse with a stick. Right now, blockchain technology leans towards the latter category.

One thing most people tend to forget is how much development goes into creating blockchain solutions. It is easy to draft a potential solution based on this technology on paper. Bringing it to life, even in a sandboxed environment, will not happen overnight, though. Most projects take months, if not years, to be turned into a working alpha version. At that time, these project may still get canceled if they are deemed not to be lucrative enough.

What is of particular concern for blockchain critics is how the list of “achievements” related to distributed ledger technology is very brief. There is Bitcoin, as well as other popular cryptocurrencies, which use this technology. However, financial institutions will not use an open standard for this technology by any means. Multiple efforts are underway to develop private and permissioned blockchains, which have no proven track record whatsoever.

Overstating the potential benefits of blockchain is the technology’s biggest downfall right now. Granted, everyone shows a keen interest in this technology, and it has plenty of potential. However, distributed ledgers can’t be used for everything right now, and there is no reason to get ahead of ourselves. The technology itself is labeled as “ahead of its time,” and it will take years, if not decades before people explore all options.

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