We are back with our weekly update, sharing the most important news stories in the tech sector. This week, we look at Santander’s global blockchain challenge, Canada’s opposition leader speaking out about the CBDC ban, APP fraud prevention expanded in the UK, fast cross-border payments trial, Hong Kong’s second discussion paper on CBDC, ECB executive board member’s warning about the crypto sector, mmWave technology for 5G, Telecom’s partnership that will support startups, Nokia’s profit drop in Q1, BT’s quantum security efforts, and FCC’s response to the request of banning the Musk Twitter deal.
Banco Santander in cooperation with Oxentia Foundation launched a global blockchain challenge for startups and scaleups from Germany, Argentina, Brazil, Chile, the US, Spain, Mexico, Portugal, Poland, the UK, and Uruguay.
Until the 9th of June, The companies can submit ideas connected to well-known challenges such as blockchain network security, user privacy, enhancing the interactions through metaverse, or boosting DeFi. After the applications are submitted, the pre-selected experts will choose 20 finalists that will participate in a pitch day, with the three winning startups and scale-ups winning €10,000 each and €30,000 each respectively.
In addition, the startups participating will be able to access Santander’s community of startups, Santander X 100, in order to get extra networking, training, and advice.
Coty de Monteverde, the head of the crypto and blockchain center of excellence in Banco Santander, says: “There is still a long way to go before blockchain is definitively installed in the daily life of people and companies, and at Santander Universities we want to give visibility and help startups and scaleups with innovative solutions in the use of this technology.”
Canada’s most likely candidate for the opposition leader, Pierre Poilievre, went out to say he would prohibit the central bank from issuing CBDCs in the future. The MP who is currently trying to become the leader of Conservatives in Canada has become known for supporting digital currencies and blockchain, claiming something like Bitcoin could be a way to “opt-out of inflation” – although this claim has been dismissed by the experts at the central bank in Canada.
In regards to CBDC, Poilievre said that as a prime minister, he would ban a potential issuing of a central bank digital currency, stating that it would grant the government power to control the spending of the Canadians.
“A central bank digital currency would mean that Canadians would have their money deposited with the government rather than with a private financial institution and that the central bank would then be in direct competition with commercial banks,” he said. “A Poilievre government will ban a central bank digital currency and allow Canadians to have the economic and financial liberty that they deserve.”
Last week, the UK’s Lending Standards Board (LSB) revealed some updates to its Contingent Reimbursement Model (CRM) Code which was created to protect citizens against the authorized push payment (APP) fraud. The code was first released in 2019 and is overseen by the LSB.
The code specifies that signatory firms in the UK are to detect, prevent and respond to APP scams, as well as reimburse customers who fell victims to the scam and were not to blame. The three new updates to the Code are aimed at improving the people’s understanding of APP scam assessment, furtherly preventing scams, and making the Code more relevant and accessible to a wider number of companies.
According to the first update, banks will have to make sure their customers are provided with a specific explanation as to why any given reimbursement decision was made. The second update highlights that signatory firms are required to activate the so-called Confirmation of Payee checks for outbound payments. Finally, the third update has adjusted the code’s provision in a way that would allow more companies to sign up.
Emma Lovell, the chief executive of the LSB, says: “Today’s updates will up firms’ scam prevention efforts, ensure a wider spread of customers are protected from scams and will help build transparency and understanding between firms and their customers.
“The rise and success of scams is not an issue financial services firms can solve on their own. By point-of-payment it is often too late – with victims socially engineered to proceed with the scam no matter what. We are therefore also calling on social media platforms, telecommunications companies, and utilities to step up and increase their efforts to intervene at every opportunity,” she added.
EBA Clearing, Swift, and The Clearing House (TCH) have partnered on an immediate cross-border payments (IXB) trial. The trial has been created with the contribution of 24 financial institutions in Europe and the US both and will kick off towards the end of this year. The full offering is expected to launch in 2023, given the pilot goes as expected.
Russ Waterhouse, the EVP for product development and strategy at The Clearing House, says: ”The trans-Atlantic pilot service will provide valuable input for the development of a fully-fledged IXB service to meet customer expectations across the globe.”
Erwin Kulk, head of service development and management at EBA Clearing adds: “Aside from delivering a simple and transparent service for end-users, our key aim is to keep things easy for financial institutions: the fact that there is no need to connect to a separate payment system should make the service very attractive for RT1 and RTP participants of all sizes.”
Jean-François Mazure, head of cash clearing services at Societe Generale, highlights: “From a user experience perspective, we believe that the IXB initiative represents a significant step towards a faster trans-Atlantic payment corridor, removing frictions and bringing value to all our customers, both individuals and corporates.”
Last week, Hong Kong released a new paper on the potential e-HKD and its challenges and opportunities in terms of adequate policies and design. Last year, the Monetary Authority of Hong Kong released a more technical white paper that focused on issuing and distributing CBDCs. The newly published paper is discussing other aspects of the possible e-HKD such as design challenges, interoperability, privacy protection, or legal considerations.
Eddie Yue, chief executive, HKMA, says: “We strongly encourage the public and the industry to take part in this important consultation and share their views with us. The comments received would help us formulate the strategy for best positioning our financial market in the rapidly evolving CBDC space.”
No final decisions on a CBDC in Hong Kong have been made as of yet.
The European Central Bank’s Fabio Panetta has spoken out about the crypto-assets and called on the global regulators, urging them to curb it as soon as possible. Panetta is the executive board member of the ECB and in his last week’s speech at Columbia University, he spoke about the urgent need for a coordinated framework, warning that the current situation with crypto assets is “creating a new Wild West”.
“In the absence of adequate controls, crypto-assets are driving speculation by promising fast and high returns and exploiting regulatory loopholes that leave investors without protection,” says Panetta. He highlighted that it is not only tax evasion or criminal activities but also financial stability that can be in trouble if the regulations are not in place.
: “We need globally coordinated regulatory action to address issues such as the use of crypto-assets in cross-border illicit activities or their environmental footprint,” Panetta claims. “We should make faster progress if we want to ensure that crypto-assets do not trigger a lawless frenzy of risk-taking.”
There are many questions arising around the use of the millimeter wave (mmWave) technology for 5G as the investment in the sector seems to be slowing down. After a couple of years of exponential growth, the 2021 revenue growth in the sector was expected to be more on-pair with the 80% revenue growth in 2020 and an even higher one the year before. However, the report by Dell’Oro shows that in 2021, the mmWave sector had “only” about 15%-20% of revenue growth, weaker than expected. At the same time, Dell’Oro experts believe this alone is not a reason to be overly concerned yet.
“We are not concerned about the slowdown and the implications for the long-term business case and see this more as a short-term calibration reflecting the fact that the sub-6 GHz spectrum still provides the most compelling RAN economics,” noted Dell’Oro analyst Stefan Pongratz, in a blog post.
Five operators and a towerco have partnered on a project that aims at giving startups the possibility to reach a worldwide audience by sharing the best practices in terms of innovation. The group called Allain consists of Telefónica, MTN, Bouygues Telecom, KPN, and WindTre. Between all six, they have over 700 million customers in 50 markets around the world.
Alaian wants to not only support the startups and nurture the promising young companies but also collaborate with them on innovative use cases for fiber and 5G. Since its recent launch, Alaian issued a global call for start-ups that will gain access to testing labs, marketing channels, and experts in the field, as well as funding and exposure possibilities.
“We are proud to form part of the Alaian alliance which will give us an opportunity to work with and share best practices with globally competitive telcos,” said Chika Ekeji, group chief strategy and transformation officer at MTN, in a statement. “Innovative digital solutions are a huge part of our strategy and our involvement in the alliance will further expose us to partnering with start-ups that are a strong fit with our Ambition 2025 strategy.”
The first quarter of 2022 for Nokia has not been as successful as expected, with the €219 million profit, as compared to the target of €263 million. Although the company said they are still on track to hit their 2022 goals, the 17% drop in profit is significant. The report highlights that a big reason for the non-satisfactory result was withdrawal from the Russian market. Apart from the profit drop, the Mobile Networks have also declined by 4% which could be expected due to the ongoing supply chain issues.
However, there were some positive news in the Q1 report as well, with net sales growing by 5% and network infrastructure increasing by 9%.
“Network Infrastructure delivered again strong growth with continued robust momentum in both Fixed and Submarine Networks,” said Pekka Lundmark, CEO of Nokia. “In Mobile Networks supply constraints hindered our revenue growth, nevertheless we expect to return to growth this year due to our improved competitiveness. Our 5G Core business continued to drive good growth in Cloud and Network Services.”
“Overall, Q1 was a strong start for the year both in terms of net sales and profitability. The demand environment remains strong and while supply chain and inflation challenges remain, we are confident we can deliver our 2022 outlook and continue to make good progress towards our long-term targets,” he added.
BT together with Toshiba are working on creating the first quantum secured metro network in the world. Last week, they revealed they have partnered with EY for the purpose of the live commercial trial. During the trial, EY will use the quantum network to connect and share data between two of its Lonon offices.
“Quantum-enabled technologies are expected to have a profound impact on how society and business operates in the future, but they are remarkably complex to understand, develop and build: in particular, ensuring that the end-to-end service designs meet the stringent security requirements of the market,” said BT CTO Howard Watson, in a statement on Wednesday. “I’m incredibly proud that BT and Toshiba have successfully united to deliver this unique network, and with EY as our first trial customer, we are paving the way for further commercial explorations for quantum technologies and their use in commercial, and societal applications in the future.”
“Both Toshiba and BT have demonstrated world-class technology development and leadership through decades of innovation and operation,” said Shunsuke Okada, corporate SVP and chief digital officer at Toshiba, on Wednesday. “Combining BT’s leadership in networks technologies and Toshiba’s leadership in quantum technologies has brought this network to life, allowing businesses across London to benefit from quantum secured communications for the first time.”
The news of Elon Musk buying Twitter in a $44 billion deal has quickly received backlash from Musk’s critics. Among the storm that went through the Internet with concerns ranging from privacy concerns to a security risks, the Open Markets Institute has urged the FCC to intervene and block the deal. However, all of the critics hoping for the deal to fail are to be disappointed by FCC’s response.
“The FCC has no authority to block Elon Musk’s purchase of Twitter, and to suggest otherwise is absurd,” said FCC Commissioner Brendan Car, in response to the request. “I would welcome the full FCC making it clear that we will not entertain these types of frivolous arguments.”