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How Blockchain Technology Can Streamline Transfers of Land Ownership

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Blockchain technology land ownership

Many Kenyans rely on brokers and advocates when it comes to the transfer of land title deeds due to the tedious amount of paperwork and long queues they have to deal with otherwise. The result is that most advocates or brokers end up taking advantage of the situation by charging high fees with some transactions even being rather unscrupulous. However, if planned blockchain technology adoption by Kenya gets the green light, things could change for the better as a blockchain-based process can create transparency by linking an individual’s details with his or her land or any other property they own.

The Blockchain is an immutable distributed digital ledger that is used to record and process transactions across a decentralised web of computers. Land records stored using the technology will thus be void of fraudulent editing, human error, and deletion.

The use of blockchain technology in resolving land registry issues will put Kenya on the map together with developed countries that are already utilising the technology for its endless benefits. This also comes at a time when leaders in the technology industry have been researching on the use of blockchain technology beyond digital currencies.

Transparency in Land Ownership and Transfers

In December 2016, the Kenyan government issued a statement saying they were piloting the use of the technology to keep track of land transactions and educational data according to BusinessDaily.

“This will not only increase security but will also help fight corruption by distributing the maintenance of records to all parties involved, rather than to a few. By allowing participants to see who owns, sells, and divides land, the technology will enhance verification and transparency,” said the Technical Manager, Institute of Chartered Accountants in England and Wales (ICAEW), Mr Lyford-Smith.

The institute is an accountant’s body based in the United Kingdom and is a pioneer member of the Chartered Accountants Worldwide and the Global Accounting Alliance. The institute stated that blockchain technology can boost coherence in land registry.

In the latest report released by Blockchain and the Future of Accountancy, the institute believes that land registration can gain from the technology, particularly in the history and transfer of proprietary rights of property.

Mr. Lyford-Smith went on to add,

“The technology can create a clear and permanent record of ownership and transfer of ownership, which can facilitate additional liquidity in the economy.”

The report cited examples of the use of blockchain technology to digitise title deeds and minimise property fraud that were done in Sweden, Georgia, and Honduras. In Honduras for instance, the report highlights how corruption can be a thing of the past by use of the blockchain to issue land title deeds that are free from any human edits while the government of Georgia has partnered with BitFury to develop a blockchain-based network for land registration. Bringing it closer home to Africa, Bitland, a Ghanaian-based startup, is also making use of blockchain technology to provide land registry services.

Ending an Era of Fraudulent Brokers and Advocates

Land cartels have for a long time now been conning unsuspecting Kenyans. Many experts feel the Kenyan government should emulate the countries that are already utilising the blockchain as most Kenyans have lost trust in the purity of title deeds and security of tenure.

The report by ICAEW indicates that the process of land registry on the blockchain would begin by tokenising the land in question. This means each portion of land will have a representation created that showcases it as a digital asset recorded on the blockchain after which each landowner will have the right tokens issued to them. While the benefits of blockchain technology are massive and beneficial, the report observes that the change process is no small task based on the complexity of the existing structures.

The Ministry of Lands and Physical Planning recently upgraded its electronic management system so as to fasten the transaction process. This means that Kenyan citizens will now need to make use of the e-citizen platform to pay for all the necessary duties and fees online.

“For your land to be listed on the ‘manage property’ page, you are required to validate it with your local land registry with your original title or certificate of lease, your original Identity Card (ID) and Kenya Revenue Authority pin during working hours,” mentioned Nicholas Muraguri, Lands principal secretary.

Kenya, being an economic giant in the East African region, will gain a lot by implementing the land registry process using blockchain technology and can join countries like Ghana and Rwanda that are already making use of the technology to digitise their land registry process.

Blockchain Technology

Temasek Partners with SGX to Launch Singapore’s First Security Token Offerings Platform

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Bitcoin Remain dominant

Temasek Holdings, recently partnered with the Singapore Stock Exchange (SGX) to launch iSTOX, a security token offerings (STO) platform. This move marks the first of such services in a country and is yet another example of the rising stock of security tokens within the general cryptocurrency ecosystem.

Raising Capital Via STOs

According to finews.asia, SGX, and Temasek recently invested in iSTOX, the country’s first STO platform. Reports indicate that iSTOX will function as a capital market, allowing entrepreneurs to raise business capital through the sale of security tokens.

Commenting on the development, Danny Toe, CEO of ICHX – the operators of iSTOX, said:

The demands of the next generation of investors and issuers will be different, and this calls for a shift in how we should approach the process of capital funding. Utilising blockchain technology, iSTOX is able to offer STOs and address needs of both investors and issuers which are not adequately met today.

STOs differ from ICOs in that the latter involves the sale of tokenized securities. Many experts believe that STOs will provide the necessary regulatory compliance needed for blockchain-based crowdfunding.

Fiat Deals Only

The iSTOX platform will deal only in fiat transactions for the sale of tokenized securities. Despite being a blockchain-based platform with associated smart contract protocols, iSTOX is technically not a cryptocurrency exchange. Thus, the platform will not list ICO tokens or popular cryptocurrencies like Bitcoin, Ether, XRP, etc.

According to available reports, ICHX is currently pursuing licensing from the country’s Monetary Authority. Once granted, iSTOX will begin offering the issuance and trading of STOs. Also, the platform plans to provide access to liquidity in the form of a secondary trading service. Fiat currencies will be used to facilitate all the transactions on the platform.

The Emergence of Security Tokens in the Cryptocurrency Narrative

Bitwise 10 Crypto Index TokenSTO platforms are fast becoming a common feature of the evolving cryptocurrency ecosystem. While ICOs undoubtedly captured the imagination in 2017, stricter regulations in many countries coupled with numerous incidences of fraud seem to be dampening the ICO craze.

In its place, STOs present a more regulatory compliant form of blockchain-based fundraising. In places like the United States, for example, regulators say that most ICOs are selling securities in the guise of utility tokens. However, STOs, being securities, must comply with laid down rules and regulations.

In 2018, numerous STO platforms have emerged. The growing consensus is that security tokens could upstage utility tokens providing a more assured entry point for mainstream investors to come into the cryptocurrency space.

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Mauritius Gets First Blockchain Securities Exchange And Will Award Digital Custodian Licences

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Blockchain Securities Exchange

Mauritius will soon start issuing custodian licenses to companies holding digital assets on behalf of their clients because the current licensing regime is not suited for that purpose. Moreover, Mauritius is about to receive its first blockchain securities exchange.

Digital Asset Custodian Licenses

The Financial Services Commission (FSC) of the Republic of Mauritius released the draft framework intended for the fintech companies. They define “digital assets” as electronic tokens representing the holder’s access rights to a service or ownership of an asset. The FSC is currently accepting feedback on the proposal from industry representatives, stakeholders and the public. With the discussions and consultations going on till the end of November.

The FSC considers them a digital representation of value which can be a medium of exchange, the unit of account and store of value. The tokens can also represent assets such as debt or equity in the promoter or “provide access to a blockchain-based application, service or product.”

Mauritius FlagCurrently, the two kinds of licenses for traditional financial services the FSC provides do not support the specifics of safekeeping cryptographic assets. The proposed license is, therefore, specific to address this difference and comply with the current relevant regulations and laws.

One requirement includes an obligation to “have and maintain a minimum stated unimpaired capital of not less than 500,000 Mauritian rupees ($14,409.64).” Businesses wanting to apply for the license will need to have offices set up in Mauritius and also have permanent representatives to deal with the FSC as well as maintain records of the custodian. The boards of directors will need three members and up, “at least one of whom shall be resident in Mauritius.”

Additionally, those providing the custodian service providers will be required to have insurance protection for the assets that are kept in custody. They are subject to providing evidence of such arrangements to the FSC. They must also have systems in place that ensure compliance with all reporting requirements under Mauritian law.

Mauritius Receives a Blockchain Securities Exchange

As a result of Mauritius’ openness to digital assets, Mindex, GMEX Group and Hybrid Stock Exchange Corporation Limited (HYBSE) have partnered to create Mauritius’ first blockchain securities exchange. The joint venture – called HYBSE International Marketplace – plans to “integrate blockchain solutions and technology with traditional financial industries providing a complete and governed ecosystem that digitalises assets onto the blockchain.”

“As we embark on a journey to pave a previous uncharted way forward, this will inevitably create an ideal prospect to move the evolution of all financial systems, light-years ahead. We must also maintain a conscious belief of the power of this evolutionary step, as not to disrupt current global markets, but to rather bolster a new way of thinking that encompasses a decentralised and truly free market entity,” HYBSE’s operations manager, Daniel Liu, said.

The firms claim SMEs will be able to use the marketplace for an initial blockshare offering (IBO), such as block-shares, from businesses registered on the marketplace at “special discounted rates”. IBO is a time-limited offer to purchase cryptonised equities and other cryptonised instruments.

Asset classes that will be facilitated for trade will include cryptonised shares, cryptonised currencies, commodities, indices, forex, ETCs (exchange-traded commodities), ETFs (exchange-traded funds), and CETFs (crypto exchange-traded funds).

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Microsoft Partners with Interswitch to Launch New Blockchain-Powered Supply Chain Financing Platform in Nigeria

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Interswitch

Pan-African payments and commerce company, Interswitch Group, partnered with Microsoft to launch a new blockchain-backed supply chain financing service in Nigeria.

Seamless Supply Chain Financing

This new blockchain initiative will bring together different stakeholders – such as banks and corporations – on a single platform that will provide end-to-end visibility, ensuring fast, seamless trade financing in supply chain operations.

Interswitch Blockchain Service is said to be built and hosted using the Microsoft Azure blockchain solution, which provides proven security, compliance and also a scalable cloud platform that accelerates and supports next generation blockchain applications. 

Interswitch“In our 15 years of operation, we have experienced the bottlenecks associated with the existing corporate-based financing infrastructure in Nigeria.” Mitchell Elegbe, Group Managing Director and Chief Executive Officer at Interswitch, said.

“This is why we are happy to partner with Microsoft, by leveraging the advanced technology of the Microsoft Azure Blockchain, to prove the possibility of building a distributed ledger that is practical, viable and has the propensity to solve some of Nigeria’s most difficult financial and logistic problems,” he added.

Launching the Interswitch Blockchain Service (Supply Chain Finance Module) allows small and medium-sized enterprises (SMEs) access to more funding in a shorter time of up to three weeks. The participating banks include United Bank for Africa Plc, Guaranty Trust Bank Plc, and Zenith Bank Plc.

SMEs will also be able to enjoy increased sales cycles from participating corporations such as the Dangote Group.

Transaction Enquiries and Verifications

The Interswitch Blockchain Service does not deploy the use of cryptocurrency in its application. Instead, transaction inquiries and verifications will be authorised by officials from participating entities without the incentives of a cryptocurrency.

Principal Program Manager, Microsoft Azure Blockchain at Microsoft Corporation, Michael Glaros, expressed excitement about the partnership with Interswitch. Glaros said: “The blockchain technology is still in its infancy in Nigeria and we are happy to pioneer its deployment in partnership with Interswitch, an innovative and forward-thinking company which has evolved its business around financial technology.”

“This will be the first enterprise-grade blockchain service in Nigeria, and one of only a handful of production blockchain applications in use by banks and corporates globally,” Glaros added.

The Interswitch Blockchain Service, allows Nigerian lenders and suppliers to identify and build relationships with high performing entrepreneurs. Therefore, according to Mitchell, the platform allows anyone to build blockchain-based solutions easily and more cost-effectively.

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