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Do We Need Banks?
“Banking is necessary; banks are not.” – Bill Gates
Australian banks are under more pressure than ever before. The regulatory environment is changing, startups are proliferating at a prodigious pace, it’s easier than ever before to start a company and most importantly consumers are eager to try new solutions to their everyday finance needs. This begs the question: “Are banks Necessary?”
This is what we discussed at ANZ during the first ever BlueNotes Debate. See the video below for comments from those who debated the topic of whether “banks are still relevant”.
3 Tips For Your Organisation To Better Understand Blockchain Technology
I recently spoke at an event hosted by Hall & Wilcox and Accenture at Stone & Chalk Melbourne on the topic of enterprise blockchains.
As part of the event, I recorded my top 3 tips for enterprises looking to implement blockchain tech in their organisation. The video is below.
Chatting About What’s Happening In Fintech
I was recenlty lucky enough to be invited to speak at Geelong Runway by FoundX about what’s been happening in the fintech space in Melbourne. Check it out below.
I’d love to hear your thoughts, so feel free to add your comments below.
— FoundX (@FoundX_) February 21, 2018
Breaking Banks Asia – Talking Fintech Hubs In Victoria
Last week I had a jam session with Simon Spencer from Breaking Banks Asia to chat all things fintech. Here’s the episode. Let me know what you think in the comments.
I’m Joining Stone & Chalk ??
This week I announced that I’m joining Stone & Chalk as their Melbourne GM. The following article has all the news about what we’ll be doing in Melbourne, who our amazing corporate partners are and who our ecosystem partners will be 👉 CLICK HERE FOR THE AFR ARTICLE.
Also, here is my tweetstrom about the announcement:
1/ I’m excited to announce that I’ll be joining the @stoneandchalk team as the Melbourne GM.
— Alan Tsen (@alantsen) July 23, 2017
2/ And you guessed it, this means that @stoneandchalk is opening up shop here in Melbourne! 🎉🎉
— Alan Tsen (@alantsen) July 23, 2017
3/ Melbourne will now have a true home for Fintech, with a space dedicated to helping accelerate the most promising fintech startups 👊💯
— Alan Tsen (@alantsen) July 23, 2017
4/ For phase one, we’re partnering with the amazing @SproutX_ team. During this phase we’ll be housed alongside them at their HQ 🙌🙌
— Alan Tsen (@alantsen) July 23, 2017
5/ Also, I want to call out our amazing partners who are helping us make this happen @anz_au @nab @australiansuper @libfinancial @genworth 👏
— Alan Tsen (@alantsen) July 23, 2017
6/ If you’re a fintech startup come and join us 👉 apply now to become a part of the @stonea…https://t.co/PeKYjBin8v https://t.co/Qne6miATzo
— Alan Tsen (@alantsen) July 23, 2017
7/ ☝️This is only the beginning. There’s a lot more to come and I’m thrilled to be involved in helping to further drive fintech in Melbs 🚀
— Alan Tsen (@alantsen) July 23, 2017
‘Double GST’ No More
Many in the Australian digital currency ecosystem were pleasantly surprised when in this year’s Budget the Australian Treasurer announced an effective date for the removal of ‘double GST’ on digital currency transactions. Effective 1 July 2017, the purchase of digital currency will no longer be subject to Australian GST. In effect, this will result in digital currency being given the same GST treatment as money.
However, more importantly, this would make Australia only the second country (the first being Japan) in the world to make actual amendments to their tax laws to accommodate digital currencies.
But What’s The Big Deal?
As it currently stands, when a consumer purchases an item using digital currencies they bear GST twice – once when they purchase a digital currency and secondly when they purchase the good or service which is subject to GST using a digital currency. On this basis, digital currencies are at a disadvantage as compared to fiat currency when it comes to using them for transactional purposes.
Although, much of the initial debate surrounding the GST treatment of digital currencies revolved around bitcoin, the provisions are broader and will likely include other similar digital currencies (Etc, Zcash etc). This is especially important to note given the recent and persistent rise of ICOs (initial coin offerings). In effect, these changes allow for innovation in the digital currency space without the unintended application of GST to transactions involving them.
A Long Time Coming – But Likely Worth The Wait
In the Government’s ‘Backing Australian FinTech’ statement made on 21 March 2016, they committed to fixing this impediment to the growth of the Australian digital currency ecosystem. After this, a discussion paper was released in May 2016 regarding the possible amendments that could be made to the GST Act to remove ‘double GST’ on digital currencies. This paper called for submissions from industry participants on a number of technical implementation issues. After submission closed much of the digital currency community has eagerly awaited the implementation date.
As someone who’s been involved with petitioning government for these changes, it is positive to see them finally commit to an effective date for the amendments. This again highlights the progressive thinking the Australian Government is showing in the fintech space to ensure that regulatory impediments to industry growth are removed.
So That’s It?
What has been released so far by Treasury is an effective date for the amendments. However, the draft legislation has not yet been released. This means that there are a number of important tax technical questions that still need to be answered. Specifically, how will digital currency be defined? How has treasury chosen to actually make the amendments to the Act (the so called input tax vs money treatment)? These are still unknown.
Having said this, these are all things that will likely be resolved in the next few months. The important thing to remember is that effective 1 July 2017 Australians will not subject to ‘double GST’ on digital currency transactions in Australia – which is great news for the future of the industry.
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Future Sandwich – Breaking Down Bitcoin
I recently had a chat with Tommy from the awesome Future Sandwich podcast. Enjoy and subscribe to it on Soundcloud or iTunes to keep up with this great new show.
Being On The Right Side Of History
If you’ve been reading the 2016 pundit predictions in the digital currency and blockchain space you’ll notice a strong trend. Bitcoin is back! A number of articles (I’ve included some below) are calling this the comeback year for Bitcoin.
So what has changed? Bitcoin still is… well bitcoin. We’ve seen an uptick in the price, which might in part be fueling the bullish predictions. However, fundamentally nothing has changed. In fact, one might argue that Bitcoin has even more problems it needs to solve in 2016 – for example, the unresolved blocksize debate.
However, what many are starting to see is that the 2015 battle cry of ‘Bitcoin v Blockchain’ was really a red-herring. In 2015, the financial industry clamoured around permissioned blockchain and distributed ledger technology, but to date has been more busy forming consortiums and creating labs rather than actually pushing product. The question of which is more valuable, permissionless or permissioned blockchains, is proving less relevant and which will actually push a ‘killer app’ first is proving to be more relevant.
It’s easy to find Bitcoin’s flaws, but it’s hard to deny that it’s on the right side of history. The movement towards truely open and extensible software that has transparency as a default is hard to ignore. I think many are starting to realise this is what the main attraction is – not another database technology. So bring on 2016, the year bitcoin is resurrected for the 87th time.
So This Is What Creative Destruction Looks Like
This week two Spanish-born residents of London, Edurne and Mayel, sealed their union on a blockchain. What makes this interesting is that they were the first to use the recently announced public notary service being offered to Estonia e-residents via Bitnation’s platform.
You may have heard of Bitnation before. Recently, they offered victims of the European refugee crisis a digital ID and a bitcoin visa card so that the displaced could more easily receive money from abroad and spend it. Interestingly, Bitnation is a DAO (Decentralised Autonomous Organisation) that is building a platform to provide government services that aren’t necessarily provided by a specific government. Under the partnership with the Estonian government, they’ll be offering notary services (including registration of marriages) on a blockchain.
Although in and of itself the idea is not novel, that a government would actually deploy it is. Many governments are thinking big about innovation in government services (we’re definitely seeing it here in Australia), yet for the most part innovation starts small. It usually starts at very low levels in the ‘stack’. A small change here, a small change there and all of a sudden things start to get interesting. Estonia is a glittering example of this. The e-residency initiative is a great case study in how governments can build small platforms that can have interesting ‘apps’ built on them (e.g. a blockchain based notary service).
Thinking about government services as a platform and then extending them through ‘apps’ makes sense – and maybe building the platform on a/the Blockchain makes even more sense. Regardless, governments now have another example of what ‘creative destruction’ looks like – and all from a small Baltic country.