What Union and SPD say: Blockchain in coalition agreement

The coalition agreement between SPD and CDU/CSU was negotiated today. But what does this mean for the future of blockchain technologies and crypto currencies in Germany? We searched the paper for buzzwords.

In the early morning hours of today’s Wednesday, the time had finally come: the two major popular parties CDU/CSU and SPD could finally agree on a joint coalition agreement after rounds of negotiations lasting days and nights – a minimum compromise, as many find. While today’s news was dominated by reports on the division of responsibilities, it is also worth taking a look at the details that made it into the coalition agreement. We have examined the contract once for the topics Blockchain, Distributed Ledger Technology and crypto currencies and compiled what the new government intends to do in this area.

The Digitization Chapter of the Bitcoin loophole

In Part IV „Offensive for Education, Research and Digitisation“, the word Bitcoin loophole blockchain appears for the first time in the chapter „Digitisation“. The topic there is „Digital Competences for All Citizens“: „We need a training and research offensive in all areas of digitisation. We consider innovation, digital sovereignty and interdisciplinarity to be particularly important. We want to further strengthen the focal points of microprocessor technology and IT security. In addition, there are other research priorities such as artificial intelligence, data science, digital humanities and blockchain technology, robotics and quantum computing“.

The next mention of blockchain and crypto currencies can be found in the same chapter on „Competitive Economy“:

„In order to tap the potential of blockchain technology and prevent abuse, we want to develop a comprehensive blockchain strategy and advocate an appropriate legal framework for trading in crypto currencies and tokens at European and international level. The possibilities of cashless payment are to be expanded in the digital age. Anonymous payment with cash must continue to be possible“.

Also in this chapter, the blockchain plays a role in the topic „On the way to digital administration“

„In the Federal Government, we will test innovative technologies such as distributed ledgers (blockchain), so that a legal framework can be created on the basis of this experience. The chapters Economy and Finance and Taxes: The next mention of the word blockchain will only take place again in Part VI „Successful economy for tomorrow’s prosperity“ in the chapter Economy. The topic „Industry“ is called it:

„We want to continue and expand the existing technology programs for application-oriented research to promote digital cutting-edge technologies such as quantum computing, robotics, autonomous systems, augmented reality (3D virtualization), blockchain, visible light communication and smart home.

In the chapter on finance and taxes, the statement made in Part IV of the chapter on digitisation on the subject of „Competitive economy“ is repeated verbatim in the chapter on „Financial markets and digitisation“.

Design Thinking Workshop: Blockchain-Use Cases

More and more use cases (from the Design Thinking Workshop) for blockchain technology and the Smart Contracts based on it are being tested in pilot projects.

Some of them are summarized below: The Design Thinking Workshop (03.05.2017) for the development of business models based on Blockchain and Smart Contracts of the Frankfurt School of Finance & Management forms the basis for this. The fact that more and more workshops/events on the topic of Use Cases are taking place shows how topical the topic is.

Blockchain technology offers the possibility for consumers to obtain their electricity directly from the energy producers. Smart Contracts make it possible to exchange electricity without an energy supplier as an intermediate instance. Consumers can sell their self-generated energy directly to other consumers.

A pilot project already exists in Australia

The aim is to make it possible for homeowners to sell their electricity and process this transaction via the blockchain. The Australian-based startup Power Ledger is the initiator of this pilot project. Customers of the state-owned grid operator Western Power are to be given the opportunity to trade their electricity with each other using blockchain technology. The project is planned for an area the size of Germany. Before the project reaches this scale, a field trial will be carried out on a smaller scale. This field test involves 20 residents of a small housing estate. The sale and purchase will be carried out by blockchain. The households will be equipped with so-called Raspberry Pi minicomputers. This enables them to monitor their own electricity consumption so that they can sell their surplus of electricity. Trading is then stored in the blockchain. Network control and billing processes can potentially be improved by the blockchain.

Another area of application is the insurance industry. In Germany, there is already a pilot project between Allianz Risk Transfer (ART) and Nephila on the use of blockchain. The Allianz Group has several test fields for Blockchain technology, including the Allianz team ‚Disruptive Technologies‘. In cooperation between ART and Nephila, the use of Smart Contract technology was tested. The test series are focused on natural catastrophe swaps. Digital and automated blockchain-based contracts are to be used to accelerate and simplify transaction and payment processes between investors and insurers. The blockchain can also be applied to other insurance transactions. As already reported, Allianz has founded the Blockchain Initiative B3i together with other insurance groups. Aegon, Munich Re, Swiss Re and Zurich are involved. One of the goals of this initiative is to reduce the documentation and administrative costs of insurance contracts.

Changes to business processes

Existing business processes should become more transparent, faster and cheaper. Basically, it can be used in the most diverse areas of companies, e.g. supply chain controls can be carried out for foodstuffs. The application can take place in the supply chain of different industries. The technology can be of great relevance for the pharmaceutical industry. This applies in particular to document management, the logging and tracking of medicines and, above all, authentication.

The US American consultant and author Don Tapscott even speaks of a redistribution of wealth made possible by the blockchain. Markets could be rearranged and existing monopolies broken up. Prosperity could be better distributed by also allowing developing countries to participate in economic events. The development of new trade routes, business partners, suppliers, service providers and customers can thus take place.

Another interesting example is the private University of Nicosia in the Republic of Cyprus. It offers courses as well as a master’s degree in digital currencies. The study and course certificates are certified in the form of transactions in the blockchain.

The various applications are still in their infancy and need to be tested in pilot projects. Whether these blockchain technologies will prevail and, if so, which ones, should therefore be pursued further.