Blockchain @ Capitant FinTech Day Antwerp

Koen Vingerhoets - @IthronKoen &

Nice to meet you!
Who : Koen Vingerhoets
Back then : Law & IT
Now : Blockchain Adviser @ KBC

Agenda
Bitcoin & blockchain in 3 slides
Bitcoin? No, thank you.
Blockchain? Yes, of course!
Blockchain use cases
Conclusion

2008 – “Satoshi Nakamoto” wrote…

Bitcoin is a unique transfer of value

Blockchain persists all the unique transfers

A transaction is
- Declaration of an incident
- Pictures of the accident
- Signed contract
- A proof of payment
- An identity
- Steps in the RDR wizard
- …
Understanding distributed ledgers Nomen est omen… block-chain

vs
1. Every hash is unique
2. Infinitly reproducable
3. One way traffic
Understanding distributed ledgers Encryption vs hashing
When you know a
hash is NOT unique

CRAZY COST /
TRANSACTION
Hashes per second on the bitcoin blockchain – proof of work
09/2013
05/2011
01/2016
09/2016
26/10 : 13 Z

CRAZY COST /
TRANSACTION
Circa 240 KwH / transaction
Mining cost : $1,1B and… mining revenu : $4,5B

CRAZY COST /
TRANSACTION
Fee cost / Transaction : $45 à $55

28
Private permissioned ledgers
Trusted financial institutions create a secure environment on the infrastructure that already holds your money.
Public
Private
BTC 1984
? KBC
Permissionless Permissioned

29
Our approach : 6 key elements
Combined and used with other parties, they create a single shared source of truth.
TrustOwnership
Transparency
Traceability
Distributed
Smart contracts

30
Blockchain is not a loose cannon
Some things are often forgotten in the blockchain space… but as bank, we can not afford to do so.
Let’s not forget
As a financial institution, we have
• Liability to handle;
• Regulations to follow;
• Governance to safeguard you.

31
Different use cases for blockchain
Blockchain requires a paradigm shift when solving customer issues.
Blockchain as a catalyst
• Efficiency gains in our own internal and
intra-bank processes : less reconciliation, less
(manual) checks,…
• New offerings for our customers, exploring
markets we didn’t enter before
• Ecosystems to join or to build with a shared
ledger of secured, trusted data

33
Our blockchain projects
Our approach is to develop useful and needed blockchain capabilities for the day after tomorrow.
We’re working on projects in…
• KBC Trade Finance
• KBC Bank – Payments
• KBC Bank – Credits
• KBC Insurance
• KBC Securities
• R3 CEV
• B-Hive
• Belgium (with other financial actors)
…

34
KBC Decision model (© David Birch)

Focus on making things better, not just adding stuff.

As Is: the current flow
customer
branch
HQ
invoice
Check
invoice
Registers
invoice
Scans invoiceCredit =
approved
Pay credit
garage invoice
Pay for car
Receives
payment
Extra check invoice

To Be: holistic approach with a blockchain
customer
KBC
Blockchain
invoice
Register hash
& some details
Credit =
approved
Pay from
credit / account
garage invoice
Pay for car
Receives
payment
Transparency
on status
Register
relevant data
Data of
invoice/credit

“Digital Trade Chain”
KBC’s first ever blockchain experiment

we.trade : the purpose
44
A marketplace
where SMEs can easily trade
with more trust

45
TRUST FINANCING
International trade: a catch 22

46
Platform
Enabling secure international
trade between SMEs
To manage, track and protect
trade transactions In a simple, digitized way
Easy access to counterparty
information and bank services

A transparent platform for SME’s & stakeholders
Buyer
Buyer’s Bank
Transporter/Forwarder
Seller
Seller’s bank
¨Certificate
issuance
Credit Insurer
Commercial
finance
Credit dpt
Payments
Insurance
Credit Insurer
Commercial
finance
Credit dpt
Payments
Insurance

we.trade
48
A platform designed for and together with SMEs
• Assessed by 17 SMEs and tested by 3 companies in
Proof of Concept stage by founder KBC Bank
• Using customer feedback during building phase and for
future developments
• The fully automated 24/7 platforms links parties and
registers entire trade process from order to payment
• Presentation of status of the trade
• Payment automatically initiated when payment
conditions have been met
• Will be accessible from PC, tablet or smartphone

Internal
Our Vision
49
A marketplace where companies can trade with more trust
we.trade is a trade platform that…
...allows corporate customers quick, easy
and paperless transactions for trade
finance
…automates fulfillment of end-to-end
settlement with full KYC
...that seamlessly connects the entire
trade ecosystem
Go beyond Europe
(2018+)
Expand & Reach Scale
(2018)
Brand launch
(Oct 2017)
Joint Venture formation
(Nov 2017)
Go Live
(Q1 2018)
we.trade
ecosystem
Banks
Insurers Logistics

50
Challenge| fiat currency on the blockchain

51
Stop smiling or
I’ll replace you
with a very tiny
blockchain…

52 201503_KBC PPT Template_V1.pptx
Customer Customer
Bank A Bank B
Correspondent
Bank C
Correspondent
Bank D
Special
Bank
Private
Company
Central Bank
Traditional settlement
Crytocurrency
- Bank Backed
- Private Backed
Central Bank Digital Currency
Settlement
Clearing DLT
DLT
DLTDLT
DLT
Cash on ledger – the options

1. Blockchain strategy is about collaboration.
2. Not just IT, also business is involved (risk appetite).
3. Unpredictable reactions of regulator & Government.
4. Financial signals (ROI) are problematic.
5. Radical uncertainty is the norm.

We
Financial Institutions sell trust & data.
Blockchain is trust & data.

Hi!
Did you enjoy the slides?
I raise funds (BTC) to support improving the daily lives
of people with cystic fibrosis, like my son.
I invite you to open your heart and your BTC wallet, please scan the QR code.
Or use 1JmSPfvJ751BYi7TVD8xXqWzPpGXqrW9Fj as recipient.
Proceeds go to Muco vzw (www.muco.be)
Thank you for your support and appreciation.
Koen.Vingerhoets@kbc.be
Twitter : @IthronKoen

Blockchain @ Capitant FinTech Day Antwerp

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