Pierre Gramegna, Luxembourg's finance minister, addressed the crowd at the World Economic Forum's 10th Annual Meeting of the New Champions in Tianjin, China, with a sweeping prediction about blockchai
Pierre Gramegna, Luxembourg's finance minister, addressed the crowd at the World Economic Forum's 10th Annual Meeting of the New Champions in Tianjin, China, with a sweeping prediction about blockchain. The technology "will revolutionize banking and financial services as we know it," he said. He pressed further with an even bolder claim: "I think it is possible that blockchain will replace the word 'Internet'. By the time our children have children, the only time they will see the word 'Internet' is in science and history books."
The three-day WEF forum in Tianjin hosted 200 panel discussions with over 1,700 attendees, including business leaders, policy-makers, and experts from more than 90 countries. The gathering centered on "The Fourth Industrial Revolution and Its Transformational Impact," matching the agenda from January's Davos summit.
Blockchain commanded significant attention across the conference. The "Unblocking Blockchain" session featured Gramegna alongside Axel Lehmann, the group chief operating officer of UBS; Jeremy Allaire, founder and CEO of Circle; and Leanne Kemp, founder and CEO of Everledger. UBS had released a whitepaper on the subject the day before. "We believe that blockchain technology could have a tremendous impact on the financial services and beyond," Lehmann told the audience.
Banks across the industry have signaled interest in blockchain as a tool to cut billions in operational costs through automation. The implications stretch far beyond banking. Everledger, based in the UK, uses blockchain to track diamonds through supply chains and curb fraud and black market dealing. Kemp outlined her vision: "I would like to see blockchain being applied to big problems, the proliferation of counterfeit goods and financial inclusion." Within decades, she believes blockchain will become "the open protocol that powers transactional trust."
Allaire offered a counterpoint to the narrow framing of blockchain in finance. "People tend to over focus on what the technology is today," he said. "There has been a overly narrow focus on financial services. I think the impact goes way beyond financial services."
He outlined the scope: "For any business function or any societal function that involve fiduciaries, you can build a globally distributed piece of software that is tempered-proof, secured and auditable. And that means that you can change an enormous number of parts of society, you can change how finance works, the nature of accounting, insurance, commercial law, governance, how public and civil societies work. All these are systems that can be moved to blockchain technologies in the next five to ten years."
Gramegna shared that conviction. Regulatory and tax questions remained unresolved, but he saw blockchain reshaping finance and banking. "The way blockchains function will make the way delivering financial services much faster, much cheaper, with less intermediaries. One aspect where we see this already happening a lot is payments services," he said.
Luxembourg's move toward blockchain adoption felt organic given the country's position as Europe's e-commerce hub. The nation had a track record of backing digital innovation. It became the first country to legalize digital signatures, achieving this a couple of years before the Tianjin meeting.
The regulatory approach mattered, Gramegna explained. "You need a regulator who is keen for innovation; which doesn't happen all the time. The regulator is there to apply the rules, fully and in an equal manner; but, at the same time, the regulator can be innovative."
Luxembourg had licensed two virtual currency firms. Bitstamp earned one of those licenses and became, in April, the world's first nationally licensed bitcoin exchange.
