Fundchain Unveils The Smart TA – First Insight Of Blockchain Proof-of-concept For The Investments Funds Industry

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Fundchain, the Luxembourg-based Blockchain consortium initiated during the summer of 2016, is now ready to unveil its first outcomes following 6 months of collaborative work and a hackathon to push the project over the line to a PoC.

After several workshop sessions, the group decided to initially focus its research on the fund distribution value chain. The aim was to introduce an easy to replicate Proof-of-Concept to the fund ecosystem.

With the support of the University of Luxembourg, almost 80 people from every participating organization, came together to finalize the prototype during a 2-day hackathon. The event mixed fund industry professionals with business and technical backgrounds with Blockchain academic researchers and Blockchain specialists from Scorechain. For 2 days, business and technical teams worked alongside to finalize the ready-to-use PoC.

For Laurent Kratz, Scorechain co-founder:

“It’s exciting to see how this initiative built up a real synergy between major financial institutions, not only with Scorechain but also between all of them. What is also promising, is that the group is always improving the PoC with the use of our collaborative platform.”

The fully decentralized Smart TA finally unveiled internally, is running on an Ethereum private Blockchain.

The collaborative and inclusive approach to the Hackathon, led to the presentation of the Smart TA prototype.

Overcoming the main challenge of replicating the fund distribution value chain specifications through a Distributed Ledger Technology (DLT) infrastructure, the Smart TA is a Blockchain-based platform enabling digital share transactions. Different roles were assigned to connect and act within the private Blockchain.

An investor has access to Fundstore, while an asset manager, or fund administrator can interact with the subscription process.

The Smart TA prototype shows how the DLT can facilitate and automate procedures while reducing operational inefficiencies and errors. Interactions between intermediaries are decentralized, faster, and more transparent.

Ethereum (the selected technology), has been turned into a private Blockchain. In this peer-to-peer environment, each user connects via their unique Blockchain node for real-time synchronization between all members.

This approach proves the technology is operational and ready to target the fund industry’s needs. Fundchain’s efforts may be considered as a major step forward for the Luxembourg investment fund ecosystem, especially now that market leaders agree that DLT is an opportunity to confirm the country’s leading position in Europe.

The next step will be to assess the regulatory challenges of the Smart TA business model. Fundchain intends on presenting the Smart TA over the coming weeks to the regulator.

The Fundchain initiative was launched in the summer with 10 key market players of the fund industry — BIL, BNP Paribas Securities Services, CACEIS, European Fund Administration (EFA), HSBC, ING Luxembourg, Pictet, RBC Investor & Treasury Services, Société Générale Bank & Trust, and Professional Services firm PwC Luxembourg —, the University of Luxembourg (SnT) and the Blockchain startup Scorechain.

The aim is to develop solutions using Distributed Ledger Technology and smart-contracts to act as innovation pioneers for the fund distribution value chain in Luxembourg.

About Richard Kastelein

Founder, Publisher and Editor in Chief of industry leading online publication, Blockchain News and co-founder and director at Blockchain Partners in London/Amsterdam/NYC. Kastelein is also an advisor with a number Blockchain startups doing ICOs including Humaniq.co where hs is interim CMO, DECENT.ch, Inchain, Chronobank, eGaas and others. He is regarded as one of the top journalists by the Blockchain and fintech communities – as is evident by his entry in the Top 150 Fintech journalists online and in the top 10 of the Blockchain Top 100 List.

As a prominent keynote presenter, he has spoken on Blockchain at events in Gdansk, Amsterdam, Minsk, Dubai, Antwerp, Eindhoven, Bucharest, Nairobi, Tel Aviv, Manchester, Brussels, Barcelona etc, where he helped spread the cause for Blockchain technology and cryptocurrency and, consequently, has built a notable network in the scene.

He’s also a director of a Dutch foundation called The Hackitarians and has run innovation events in London, San Francisco, Berlin, Amsterdam and other cities around the world on topics such Blockchain, Health, Energy, Internet of Things, AI etc.

In 2013, the European Commission appointed him as an expert for overseeing financing for emerging startups as a part of the European Commission’s 90 billion euro Horizon 2020 project, created in Brussels to promote innovation as a driving force of job creation and business ventures across Europe. He has also worked as an external expert for Innovate UK since 2012, judging startups for the UK government.

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