As reported by Centre Blockchain de Catalunya , the 17th of March 2021 is the day the European Commission has reported it will be issuing an update on the ‘Digital Green Pass’. This is a certificate to prove if one has recently been tested for COVID-19 and whether the holder of the Green Pass has been vaccinated. According to Euronews, in an announcement from Ursula von der Leyen, President of the European Commission, she stated, "The Digital Green Pass should facilitate Europeans’ lives," adding, "The aim is to gradually enable them to move safely in the European Union or abroad - for work or tourism." However, it is believed that it will take another three months of technical work, so the Digital Green Pass is unlikely to be available until July 2021.

Source: Twitter

Nevertheless, this has not prevented the rollout of the AOKpass, a Blockchain- powered solution which has been developed by the three organisation International Chamber of Commerce, Societe Generale of Surveillance and SOS International. The AOKpass is already being used in the Catalan city of Girona and so, by virtue, is helping the city to regain a degree of normality in the aftermath of the ravages of COVID-19. AOKpass is not the only Blockchain-powered app to prove if you have been vaccinated since the World Health Organisation (WHO) has been piloting a program with VaccineGuard, which has been developed by an Estonian-based company called Guardtime. As ever, Blockchain technology is not a silver bullet and there are other possible solutions, as Dr Stephen Castell, who recently wrote in Digital Bytes, pointed out: “There is an App called Zykme that transfers personal data P2P, securely and privately, using a unique patentable one-time transfer code protocol, i.e. simply from the data subject to another person with whom, and only with whom, that data subject wishes to share his/her personal data; and without that data being held centrally/remotely (so definitely NO blockchain!). Thus personal, Covid Vaccination Evidence Data is stored only in the Zykme.net App, on the personal smartphone etc device, totally under that person's individual control. There is no reason why Zykme could not include personal Authorized Covid Vaccination Evidence Data right now”.

While many countries are yet to fully support some form of vaccination passport it is difficult to see how airlines will even allow passengers on a plane without doing all they can to protect the safety of fellow passengers. Even in the US, the new Biden administration talks of “assessing the feasibility” of linking COVID-19 vaccinations to international vaccination certificates and producing electronic versions of them (page 181 of its 200-page national pandemic strategy with seven goals aimed for ending the COVID-19 pandemic). At one level it is difficult to see what the real objection is - after all, for many years travel has been prohibited to much of Africa and South America without certificated proof of having been vaccinated against yellow fever! On this subject too, WHO is also in discussions with Estonia to develop a ‘smart yellow card’ - a digital version of an existing analogue paper-based system to prove yellow fever vaccination.

There must surely be a balance between having to prove if one has been vaccinated (whereby allowing people to travel, gather in crowds, go to the theatres, cinemas, concerts etc) and restricting personal freedom. Ana Beduschi, an associate professor of law at the University of Exeter insists that “the introduction of vaccine passports poses essential questions for the protection of data privacy and human rights. It is not sufficient to develop technical solutions for the verification of people’s health status,” adding, “the risks of deploying such technologies must be anticipated and mitigated as much as possible”.

We had to wait until the Medici family from Florence opened its first bank in 1397 to find a way in which to create money and interestingly, in the same way that Blockchain technology offers greater transparency and trust, the Medicis traded on the fact that people trusted them together with their banks. Arguably, the Medici family pioneered many of the financial concepts that we still use today in our banks - double entry bookkeeping (e.g., assets = liabilities + equity, and also ‘letters of credit’) as way to get around the religiously frowned-upon act of usury (lending of money) which existed at the time.

The Medici family

Source: News of the new age.com

In essence, rather than merchants travelling around with sacks of cash they could receive 40 pence for a Florin in London, 90 days after a merchant had deposited money in Florence. The London bank then offered 36 pence for a Florin, again payable in 90 days for someone who wished to send goods to Florence thus generating a 4 Florin profit for the Medicis, i.e. 22% p.a. However, although it was essential that the transaction/letter of credit lasted for 90 days, before long the Medici family had secured branches in Milan, Venice, Rome, London, Geneva, Lyon, Avignon, Barcelona, and Bruges so expanding the use of their letters of credit, the holding of deposits and the making of loans. A fortune was made from the letters of credit which, themselves, became a method of exchange/payment based on a promise to pay, since merchants trusted they would be paid simply by presenting their letter of credit. 

The ability to create money ‘out of thin air’ really took a massive leap forward with the development of fractional banking, which is when a bank holds only a portion of the money deposited with it as reserves and then offer loans to other parties and, in doing so, charges interest on these loans. Arguably, this concept was honed by goldsmiths realising that not everyone needed their gold or silver, all at the same time. Therefore, when customers deposited their gold and silver at a goldsmith they were, in turn, given a promissory note. These notes were used as a form of ‘exchange/money’ with the goldsmiths using these gold and silver deposits to issue paper certificates/loans, and again they then charged their borrowers. In the 17th century, goldsmiths therefore transitioned from being guardians of valuables to interest-paying and interest-earning banks. The goldsmiths in London developed these services as, prior to such activities, they were mainly to be found in Italy, Germany and Holland. In part, this led to the first central bank which was in 1668 in Sweden.

But why is this relevant to Bitcoin? Well, many argue that Bitcoin is a form of money but, rather than being backed by promise from a bank or backed by gold, it is limited by design to only being able to create 21 million Bitcoins and is backed digitally by code and algorithms. It has been designed specifically to eliminate the ability to double spend, as there is a record to prove when it has been passed from one party to another. The challenge is that if Bitcoin (or any crypto derivation) were to truly become a globally accepted medium of exchange it could threaten the control that the central banks, and therefore governments, to control their economies. However, after 11 years the value and acceptance of Bitcoin continues to grow and, despite the naysayers, it is increasingly becoming bought by millions of individuals and is now much easier for asset managers to hold and trade. 

                 How Bitcoin as an asset, which can be held by Fund Managers, has changed

*BTC on Apple Pay, Google Pay, Mastercard, PayPal, Square, Samsung Pay & Visa

Source: Teamblockchain

In the last four years the infrastructure in terms of provision of custody services, insurance, and general acceptance of even quoted companies holding Bitcoin as part of their treasury services has been established. There are now a variety of ways that fund managers can gain access to Bitcoin including the recently BTCC ETF which is traded on the Toronto Stock Exchange.

The alchemists failed, but the Medici family and then the goldsmiths succeeded. Can we truly class cryptos, therefore, as the third successful way in which money is being created out of thin air? If so, the implications for society are immense, this time with it being possible for private individuals to have a stake in what may become a very valuable asset.