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A New Blockchain Solution Aims to Curb Child Labour in Mining

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Blockchain Solution Curb Child Labour

Two entrepreneurs have turned to the blockchain to build a platform that will enable businesses to curb child labour, environmental devastation, and the financing of armed conflict in their supply chain processes.

Dorae Inc. is running a pilot of a blockchain solution for the coltan and cobalt provenance under the tagline “the blockchain for raw materials”. The blockchain solution is Ethereum-based and will track the journey of a mineral from its source to the end user. The company aims to make companies more responsible with its global supply chain tracking solution that can be used for anything such as smartphones to electric cars.

Referring to their solution as one that is expected to “revolutionise the global market for these materials”, Dorae has kicked off its first pilot in DR Congo with the backing of the country’s president, Joseph Kabila. The pilot project is currently tracking cobalt and coltan from three mines in the DRC. The two minerals are used in items such as laptops, phones and electric vehicles. If the pilot becomes successful in the utilisation of blockchain technology to the secure transmission of mining supply chain data, it will help to eliminate the child labour cloud that has been hanging over the DRC’s cobalt and coltan mining industry. The Central African country, which is a hotspot for mineral mining, has been plagued by armed conflict coupled with a poor record of human rights issues including child labour.

Application of Blockchain Technology

The blockchain solution is expected to help by making it possible for all involved parties to record information about the origin, transit and processing of the raw materials into finished goods. All the stakeholders involved – companies, consumers and financiers – will have insight regarding the origin of the material and its full journey.

Speaking to Global Trade Review, Dorae’s Co-founder, Aba Schubert said, “The highest value of blockchain is addressing the disconnect in the information that’s needed in one end of the supply chain and the information that exists at the other end. That’s why we decided to start our project in DR Congo because there is information on the ground that end-users need, particularly US manufacturers who have actual regulatory requirements to conduct diligence on their supply chains, but it gets lost along the way.”

Partnerships with Governments and Businesses

Santos Silva, Dorae’s other co-founder, stated that the company needs to work with governments as a way of them standing out from their competitors. The two co-founders believe their platform could benefit different governments by giving them a tool that they can use to manage the information collected from their mines while empowering them to fight child labour and tax evasion issues.

Schubert went on to add: “We do not work against governments, we do not work independently from them, we work with them. Instead of just running our business on a private basis, we went and showed them our project, to get their blessing.” This was witnessed when the DRC’s president, Joseph Kabila met with Dorae in person and gave his approval.

Although the blockchain-based solution by Dorae could potentially curb human rights abuses, environmental exploitation, as well as regional conflict, the company’s founders, are tackling the issue from a business-focused viewpoint as companies associated with such issues could experience huge legal, financial and reputational repercussions.

Schubert went on to say: “We are not an NGO, we are not going in scolding people and telling them they should not do business this way or that. We are saying ‘here is a way you can do it and be economically compensated for the effort that that involves, and this is a system to get that information from A to B’.”

The end goal is to have firms rewarded by the end-consumer for maintaining proper standards. This is one of the key reasons that Dorae expects to get support from different companies in the supply chain industries as each has “an incentive to preserve that information”. The company is expected to target all supply chain stakeholders from both small to large-scale miners, processors and distributors as well as large international companies like Apple and Tesla.

How the Solution Will Work

According to Schubert, anyone can be onboarded to the platform as long as they have “good quality information”. Each material will have its own tailored dataset that will detail the information regarding the place of origin, amount and the state of material, time and location of the transaction, transaction individuals and the satisfaction of legal requirements. All data will be gathered and verified through partnerships with certification organisations, government inspectors, and NGOs.

Schubert said: “Our system takes the information, aggregates it at point of origin, loads it to blockchain. When a unit of material moves from the mine to the initial distributor, that sale is logged, and then when that distributor sells it to a processor, that sale is logged too. What the processor actually does to the material, that information gets logged, and so you get this immutable chain of information that is there as a pre-packed audit trail for the end-user.”

Lack of due diligence by supply chain companies is what commentators and academics have argued has contributed to the de facto embargo of minerals from the DRC leading to a weak economy. By making use of the blockchain, the platform will make it easier and cheaper for companies to prove their supply chains are responsible.

Schubert concluded by saying “financiers don’t want to get associated with it if there is some liability attached to it, and with this system, they can know that what they are financing is actually green mine-sourced.” While trade financiers are not their main focus at the moment, they will also be eventually added to the platform at some point in the near future.

Doare’s next milestone will be to increase the number of mines and raw materials and expand to additional countries. The startup is already in talks with specific countries in Africa and South America.

Blockchain Technology

Kenya’s Financial Institutions Want Blockchain-Based Financial Products Approved

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blockchain-based financial products

Dr. Patrick Njoroge, the Governor of the Central Bank of Kenya (CBK) revealed that the central bank is receiving several applications from financial institutions in Kenya soliciting the approval and licensing of blockchain-based products and services.

His statement comes at a time when most financial institutions in the country are busy trying to find ways of addressing the disruption caused by blockchain technology. As it stands, both market regulators and key industry players in the financial sector are considering regulations and guidelines for the blockchain, virtual currencies, and online forex trading.

Speaking during a gathering of investment professionals, Dr. Njoroge said: “A number of banks are currently working on products (and services) hinged on blockchain technology and we think that they offer a lot of promise. We are not anti-innovation or anti-cryptocurrency. We support innovation but are concerned about the impact on financial instability and the inherent risks. CBK is working with central banks all over the world to identify the risks and find ways to mitigate them. The weakest link is where problems in our financial system will start.”

The blockchain was initially designed as an underlying technology for cryptocurrencies such as bitcoin but has over the years been utilised to help streamline the delivery of products and services in different sectors by governments and corporates.

Alternative Investment Schemes

The move by financial institutions in Kenya to solicit for the approval of blockchain comes two months after Joe Mucheru, Kenya’s Cabinet Secretary for ICT announced a blockchain taskforce that was formed to give recommendations on how the government can leverage the blockchain.

Dr. Njoroge went on to say that most online forex trading transactions tend to happen outside the central bank of Kenya’s jurisdiction. Last year saw Kenya’s Capital Markets Authority issue new regulations meant to curb risks that are linked to online forex and cryptocurrency trading. So far, there only exists one firm in the country that has an online foreign exchange license.

The National Treasury’s Director General, Public Investment and Portfolio Management, Esther Koimett, said there is a special interest by the national treasury on issues that affect the financial sector in Kenya and that alternative investment opportunities are progressively becoming crucial in resource mobilisation. She went on to add: “Last year the government launched the M-Akiba Bond as an alternative way for Kenyans to invest in Government Securities. Such alternatives need to be encouraged.”

A speech read on behalf of Bernard Ndung’u, the chairman of the Public Sector Accounting Board (PSAB) by Lazarus Kimang, stated: “Due to the ever-changing investment environment, there is a need to improve and continuously enhance the skills of financial analysts employed within government institutions. This will ensure that public sector entities are provided with sound advice on investment alternatives and strategies that derive them maximum returns.”

The PSAB chairman went on to share his concerns about other investment schemes that would make people vulnerable to fraud cases as well as the difficulty that financial market players would encounter in assessing different investment opportunities such as bitcoin.

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UNICEF Invests in Blockchain-based Early Child Development Startup Amply

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UNICEF Invests in Amply

The UNICEF Innovation Fund has announced its first investment into a South African startup called Amply, which leverages blockchain technology to better manage early childhood development services.

Founded on the IXO blockchain protocol, Amply is a UNICEF-backed application that is creating a universal shared ledger for impact data. Early child development (ECD) centers can record and validate pre-school attendance claims. The government of South Africa is then able to exchange these claims with subsidies, which create accountability and makes the funding process more transparent.

Based in Switzerland, the IXO blockchain is a project that is building the needed technology for the impact investment space. Its technology is meant to scale impact measurement as well as allow for the invention of digital assets known as Impact Tokens that are supported by verified impact data.

The Amply Platform

The Amply system enables every child to have a mobile digital identity that verifies their existence, records the history of their education and enables them to receive the benefits that they deserve. Known as the digital identity protocol, the system is already changing the way pre-school children are registered in South Africa.

AmplyThe system has been built in such a way that it stores the digital identity and personal details of each individual child privately allowing only for the child or their parent to have control. Since the pilot was launched in 2016, about 85 ECD centers have recorded over 61,000 digital attendance, especially in the Western Cape region. Pre-school teachers, through a verifiable claim format, are now able to collect data on attendance through the mobile application developed by Amply, as part of a pilot project. The verifiable claim format is a systematised template that allows for the exchange and use of information across datastores, which helps break down information silos between various stakeholders. The validated attendance claim is then tokenised as a digital asset that a given ECD center can exchange for subsidy grant funding from the government.

According to TechBullion, the digital data captured by Amply has metadata – location, date and time of collection – that has a mathematical proof marking that proves the claim comes from a given origin. This way, the data has a built-in error checking that makes it possible for an external authority to validate the entry without the need to know what is contained in the data. The mathematical proof tied to the metadata is free from any tampering.

In most ECD centers today, teachers are forced to use a paper-based system that cannot be verified. As such, the centers are forced to submit lengthy attendance reports whenever they need to claim subsidies for the services rendered to the Department of Social Development. The government is, therefore, forced to spend a massive amount of time in auditing the attendance reports which makes it a long and expensive process. Besides, stakeholders such as NGOs, ECD centers, the government and other institutions are unable to utilise the information available in the analog reports to come up with comprehensive analytics and program optimisations.

However, with the availability of the global data ledger by Amply, all stakeholders can now have access to crucial information such as where and how the services are being delivered which will help them to plan better and allocate resources. Besides, the data ledger has brought about increased trust in the funding ecosystem which has resulted in increased funding for needy children while saving the administration money and time.

While education is the main focus for Amply at the moment, there is excitement for potential applications that will tackle access to government subsidies, healthcare, food and other goods and services sector. Data collected via Amply has the potential to help improve the consistency and quality of services that South Africans receive. And for Amply, it is just the beginning as they are looking to expand to more schools in the country to help the more than 3.5 million children that are currently not receiving pre-school education.

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BlockCerts Targets Africa Through New Blockchain Strategic Alliance in Mauritius

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Blockcerts Blockchain Strategic Alliance Mauritius

BlockCerts has announced the formation of a Blockchain Strategic Alliance in Mauritius to target the African market.

BlockCerts, a private blockchain platform developed by Seattle-based Finaeos, will be promoting blockchain initiatives in Africa in partnership with Rogers Capital, the fintech arm of the Mauritius-based Rogers Group.

Timothy Vasko, founder and chief architect of BlockCerts, said in a press release: “This is an exciting step for BlockCerts. Through our operations in Mauritius and working with the team of Rogers Capital, we will be bringing new blockchain innovation and infrastructure functions, to generate new opportunities for growth, inclusion, and advantage to the African population businesses, and governments as blockchain evolves to serve the combined population 1.3 billion people.”

According to the World Bank, Mauritius is the easiest place to do business in Africa while the African Development Bank has rated the Island as the most competitive on the continent. The country is also aiming to become the new Singapore by becoming an investment and trade hub for global investors wishing to set up their operations in Africa.

Mauritius also showed its determination in becoming a trade hub when it joined 43 other African nations in signing the African Continental Free Trade Area (AfCFTA) signed in March 2018.

“We are excited to begin operations with Rogers Capital, as the market potential for building blockchain infrastructure is massive when considering the 2.5 billion people who are seeking new inclusion and opportunity in [the] supply chain, payments, and fintech, which can all be served on the BlockCerts blockchain,” Vasko stated.

Vasko also said BlockCerts’ sister companies have been incorporated and operating successfully in India as technology providers for five years. The company has now expanded to Africa where it will provide the continent with technology platforms from its operations in Mauritius.

“This area is committed to becoming a world force, improving the lives of millions, and enhancing trade and transparency through blockchain. We couldn’t [be] more excited to bring BlockCerts forward with our partners from Mauritius,” he added.

“We are very pleased to have the involvement of BlockCerts with Rogers Capital in bringing blockchain to our Corporate, Technology and Financial services – while we continue on the path to pursue new opportunities. […] Blockchain is the next big wave that will propel the world stage forward. We are committed at Rogers Capital, to be a leader at the head of the surf with BlockCerts to power our blockchain initiatives,” said Rogers Capital CEO Kabir Ruhee.

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