"A couple of years ago Bitcoin revolutionised the way we think about money transactions and the economic systems around it. The technology behind it - Blockchain - has only started to show its potential, and today it is used for all kinds of decentralised transactions and systems. Safer contracts for house ownership in troubled regions, easier ways to rent equipment from our local government, more secure solutions for connecting devices, .. The endless possibilities challenge us to rethink long-lasting paradigms and craft all kinds of unique services and experiences. Come discover it all with us in the ARENA!" (from https://www.arena.live) In my slides, I highlight a few facts which counter popular bitcoin beliefs. I explain why banks pursue private permissioned ledgers and showcase some projects we're running at the moment.

1. Koen Vingerhoets - @IthronKoen on

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

4. ECB SAYS
NO

5. CRAZY COST /
TRANSACTION
Hashes per second on the bitcoin blockchain – proof of work
09/2013
05/2011
01/2016
09/2016

6. CRAZY COST /
TRANSACTION
Today : 10 Z

7. CRAZY COST /
TRANSACTION
2012

8. CRAZY COST /
TRANSACTION
Circa 200 KwH / transaction
Cost / Transaction : between $40 - $50
Mining cost : $1,1B and… mining revenu : $4,5B

9. WAY TOO
CENTRALIZED

10. WAY TOO
CENTRALIZED

11. THOSE POOR
UNBANKED

12. Agenda
Bitcoin? No, thank you.
Blockchain? Yes, of course!
Blockchain use cases
Conclusion

13. 13
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

14. 14
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

15. 15
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.

16. 16
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

17. Agenda
A really short introduction
Key benefits of DLT
Blockchain use cases
Conclusion

18. 18
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)
…

19. 19
KBC Decision model (© David Birch)

20. Focus on making things better, not just adding stuff.

21. KBC Insurance | Document Authentication

22. Trust Chain - your digital documents on the blockchain
Why?
How do we, as insurer,
secure trust of our customers
in our digital assets,
now and in the future?

23. Trust Chain - your digital documents on the blockchain
What
Authentic
Validity
2-sided

24. Trust Chain - your digital documents on the blockchain
VALID FROM
26 April 2017
VALID FROM
VALID FROM
VALID FROM
VALID FROM
VALID FROM
Proof of Authenticity
Proof of Existence
Proof of Validity

25. Trust Chain - your digital documents on the blockchain
https://www.bloomberg.com/news/articles/2016-11-22/vinci-says-builder-isn-t-revising-acccounts-cfo-isn-t-fired
• French constructor Vinci, active in +100 countries
• Not hacked but impersonated
• Fake press release on fake website
• Bloomberg picks up first
• Shares drop with 18%
• How to undo?

26. KBC Bank – Credits | My Car

27. 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

28. 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

32. KBC Trade Finance| we.trade

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

34. we.trade : the purpose
34
A marketplace
where SMEs can easily trade
with more trust

35. 35
TRUST FINANCING
International trade: a catch 22

36. 36
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

37. 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

38. we.trade
38
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

39. we.trade
39
The status of the project
• Currently in building phase
• Market Launch by consortium banks: beginning of 2018
• Initially in following countries:
Belgium, France, Germany, Italy, Luxembourg, the Netherlands, Spain and the UK
• With soon an extension to other European countries
• Future: expand the ecosystem of trust with more banks, more countries and other
service providers which may provide added value: transport / logistics / insurance/customs
/ certificate issuing parties…

40. Agenda
A really short introduction
Key benefits of DLT
Blockchain use cases
Conclusion

41. 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.

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

43. 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