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Santander Hires Former Apple Pay Exec to Lead P2P Payments

An executive formerly working on Apple’s payments products has joined Banco Santander.

Trish Burgess joins the Spain-based multinational as the new global head of Peer-to-Peer Payments and will direct its expansion of digital payments services globally, according to an announcement Thursday.

Burgess worked at Apple for 4.5 years, her LinkedIn profile indicates, where she helped lead the launches of both Apple Card and Apple Pay.

The news marks Burgess’ return to Santander, having held a role in securities at the bank from 2007 to 2010. Since then, she’s held senior roles at BNP Paribas and Visa. Her education saw her study finance and marketing and electronics with a focus on telecoms.

At Santander, Burgess will report to Chirag Patel, global head of Santander Digital Payments, and will target improved user experiences and growing the adoption of P2P payments “to foster an international payment network,” the banks says.

“Trish’s appointment as head of P2P highlights our commitment to delivering best-in-class payments solutions
for our customers.” said Patel. “We know that innovation is powered by the most talented people, and we welcome Trish’s wealth of payment experience.”

Santander last year dedicated €20 billion to invest in digital and technology over four years.

In 2018, the bank launched a blockchain-based mobile app for fee-free cross-border foreign exchange that used Ripple’s xCurrent tech. One Pay FX was initially rolled out for Santander’s customers in Spain, the U.K., and the U.S., but later expanded to Latin America.

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Cut the Consensus: You Can’t Run a Business Like a Blockchain

William Mougayar, a CoinDesk columnist, is the author of “The Business Blockchain,” producer of the Token Summit and a venture investor and adviser.

It has become trendy to apply blockchain governance principles to almost anything. But if we want to make blockchain organizations work, I believe we need to make an important distinction between the “governance of blockchains” and “governance by blockchains.” 

What works for the technical realm of blockchains does not automatically translate to the running of businesses or social organizations, as attractive as it may be to apply the blockchain novelty factor. Democracy is great for society and government, but it is bad for business.

Over the past few years, we have learned a lot from the “governance of blockchains,” primarily about consensus and decentralization as the two primary characteristics. Consensus in the blockchain context refers to the nodes on the network agreeing to synchronize on the state of transactions for that blockchain. And decentralization is the preferred topology for these nodes: they are geographically distributed and diversely owned. This ensures redundancy of failures as well as a level playing field of participative inclusion, both important outcomes of open blockchains.

Our applied knowledge stalls thereafter. 

We know much less about the field of “governance by blockchains,” as this is still at the experimental stage.

CONSENSUS IS A DREADFUL MANAGEMENT PRACTICE FOR DECISION-MAKING.

The desire to apply consensus methods and decentralization architectures to how we run organizations is an interesting concept. It stems from well-intentioned objectives wanting to mimic the governance of blockchains as a guiding strategy.

In the simplest form, people who have a stake into projects are seen like nodes, and they are given voting power. The more decentralized the better. Voilà. If it works for a blockchain, it should work for organizations, no? 

Except that people are not computer nodes and consensus is a dreadful management practice for decision-making.

Many decentralized projects or ideas are slapping the word DAO to their names, in a loose way. We now have a Legal DAO, Marketing DAO, Investment DAO, Jurisdiction DAO, Democracy DAO, and so on (I’m refraining from naming actual names, though we all know who they are). These groups are obsessed with group-voting for decisions, being very transparent about their actions or discussions, and adopting decentralized inclusion from the beginning. As a result, they end up voting on everything and insist on public openness as a modus operandi. 

The problem with decentralized decisions

Agreeing by majority voting doesn’t always result in the most optimal decisions, and it often leads you to compromise at the lowest common denominator level amongst the group, resulting in mediocre outcomes. Most decisions carry a degree of ambiguity and uncertainty that an experienced decision makers are used to, whereas a group of people with less experience will rather debate these ambiguities for a long time, still without resolving them.

The tough and bold decisions are left un-tackled and never made by consensus because there will always be dissenting voices that will prevent these decisions from taking place. For example, a given idea might be beneficial economically to the majority of users, but not to a minority of them immediately. Do you change the decision so that all users get lower benefits, or do you take the tough decision to optimize for the majority of users first? There are never perfect decisions.

POPULARITY DOESN’T ALWAYS LEAD TO THE RIGHT DECISION. JUST BECAUSE IT IS POPULAR DOESN’T MEAN IT’S THE BEST.

One squeaky voice could lead to endless discussions, halting progress or delaying voting, without regard for urgencies or efficiency in implementation. The voting method can also break down when you end up with a less experienced majority that votes on the wrong decision. When the barriers are low for getting a seat at the table, just being there doesn’t say anything about the experience level of participants. Over-voting can lead to zig-zagging into iterative decisions with an appearance of progress.

Popularity doesn’t always lead to the right decision. Just because it is popular doesn’t mean it’s the best. Do politicians get voted in power because they are really competent or because they become popular enough to garner the required votes? Many elected officials (and even presidents or prime ministers) end up as bad choices after being elected, but the electors are stuck with them until their term is up. Elections by popularity vote are a type of irreversible decision-making that is hard to undo, even as we believe in the “wisdom of the crowd” thesis – that more people deciding equals better deciding.

How about accountability? In the most optimistic scenarios, the outcome of decisions turns out as predicted, but in many cases, things don’t always go as planned. Who is responsible for fixing what happened as a result of a bad decision? We can’t say, “well, we voted on that” and wash our hands. If 20 people voted on something and things don’t work out, who is to blame? Who will pick up the ball and fix things, change course or reverse decisions to ensure success?

Many decentralized blockchain projects do not appreciate the need for central leadership, and they brush that aside. It is not cool to take orders from others, or it’s not decentralized enough. Let the community decide, say decentralization advocates. But you can’t ignore leadership, because it is needed. Decentralization should not be about rejecting hierarchies and people management. The reality is that you can’t vote on everything, and people need to be managed with accountability in mind first.

Then there is the issue of culture. When decentralized groups are instantly assembled and they meet only sporadically, coalescing around a homogenous culture or agreeing on principles is difficult to achieve. In the context of blockchain operations, each decentralized nodes works for its own economic advantage, like a mercenary. But putting mercenaries together in a room doesn’t automatically yield cohesiveness at the required level of sound group dynamics.

Do DAOs work?

We are still in the early generation of DAOs. Almost four years have elapsed since the first DAO malfunctioned, but we haven’t had four years of experience working on iterative models since then. Only recently have we started to tinker again with business-minded DAO and decentralized decision-making across a variety of applied scenarios. It is easy to start a DAO, but much more challenging to devise the right structure to support and operationalize it.

We need to evolve the concept of business-minded DAOs with another level of sophistication among its practitioners. Baking programmable decision-making before enough experience has been gathered or previously acquired in whatever other relevant domain is a sure recipe for disaster.

DECENTRALIZATION SHOULD NOT BE ABOUT REJECTING HIERARCHIES AND PEOPLE MANAGEMENT.

Governance is a very promising application of blockchains, perhaps after the transfer/ownership of money and the emerging field of decentralized finance. But blockchains and new-age governance are not going to reinvent the process of decision-making by throwing away decades of management soundness and best practices experience. 

However, we do need more experiments to see if (and how) we can improve upon what we already have. For example, there are promising ideas in innovative voting mechanisms, such as quadratic voting, capital-constrained liberal radicalism (CLR) voting and other related variations that go beyond the blanket “one person-one equal vote” tradition. Quadratic voting is a distribution method that lets voters assign more than one vote across candidates. CLR voting takes into account the total number of votes and their provenance, not just the weight of that vote. So, for example, 500 votes from a weight of one share counts more than a single vote with a weight of a thousand shares.

Technical consensus in blockchains has been well defined and documented, and is backed by many years of research that culminated in Nakamoto putting it all together into bitcoin and its blockchain. But using blockchain consensus methods just for the sake of using them in business is not necessarily a breakthrough itself. 

In business, life and technology, good decisions are good because they produce success. But good decisions are only judged in the rearview mirror, well after outcomes fully unravel. 

You can’t easily automate decision-making just by configuring logic into a smart contract and trying to mimic and predict all scenarios that need judgment rather than automation. You must ask – what are we trying to fix or invent? And do we have the right people with the relevant domain experience and expertise at the table, beyond just knowing about blockchains? 

You must define and organize your processes early on, and not fall into the trap of wanting to decentralize everything too quickly. Not every process needs to be on-chain. When embarking on a DAO experiment, you need to be clear on what is DAOable and what is not.


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FDA Advised To Adopt Blockchain Technology For Drug Tracking

MediLedger, a blockchain-powered network tailored for the pharmaceutical industry has released a report stating that U.S. Food and Drug Administration (FDA) could benefit from blockchain adoption in the fight against counterfeit drugs.

MediLegder Network Could Revolutionize FDA Drug Tracking

According to a report published by MediLegder an FDA-approved Pilot Project, blockchain technology adoption could boost the agency’s ability to trace and track prescription medication across the United States.

MediLegder, established in June 2019, is part of the FDA’s move to ensure compliance with the Drug Supply Chain and Security Act (DSCSA) expected to be fully implemented by 2023. The act requires stakeholders in the industry to track legal changes in ownership of pharmaceuticals in the supply chain.

According to the report, MediLegder’s blockchain network could aid organizations to keep accurate records of legally purchased prescribed medication and generally provide better healthcare services for patients. An excerpt from the report reads:

“It is the workgroup’s belief that, in the absence of a central point of data sharing as other countries have chosen to implement, the US supply chain will suffer as companies struggle with keeping data accurately and completely shared across a wide variety of partners, systems and technical formats. This means that in the event of a significant public health crisis, stakeholders and agents will struggle to locate and quarantine suspect product in a timely manner, continuing to put patients’ lives at stake.”

Also, the report revealed that the medical industry can achieve full data privacy compliance and avoid the leak of confidential information by adopting zero-knowledge proof technology powered by MediLedger’s blockchain network. However, the long-term success of an interoperable pharmaceutical blockchain solution is dependent on strong participation and adoption from all industry stakeholders, per the report.

Blockchain Adoption in Provenance and SCM

MediLedger’s blockchain network is developed and administrated by Chronicled, a San Fransisco-based technology company. After receiving approval to run a pilot project in 2019, the company began collaborating with major organizations in the pharmaceutical supply chain to test out the blockchain network’s potential to aid the FDA in enforcing DSCSA compliance.

The pilot project comprised a workgroup of 25 leading companies such as multinational pharmaceutical behemoth Pfizer, channel and contract management firm Genentech, drug wholesaler AmerisourceBergen, and multinational retail corporation Walmart to name a few.

Commenting on the progress of the project, CEO of Chronicled, Sussane Somerville remarked:

“We are very pleased that companies across the industry joined Chronicled in the MediLedger FDA Pilot Project. We were able to show that a blockchain solution is feasible to meet the 2023 DSCSA requirements and are privileged to take part in making the US drug supply chain safer for patients.”

According to Sommerville, the project was established on three core technologies: zero-knowledge to facilitate privacy for messaging and transfer of data, a blockchain ledger for shared transaction verification and smart contract execution, and a private messaging system to provide interaction between clients and trading partners in the supply chain.

Representatives from Genentech and Pfizer said the project has demonstrated a widespread industry commitment to developing an interoperable system that aids the FDA to achieve full DSCSA compliance.

Apart from the pharmaceutical industry, other blockchain pilots are looking at utilizing technology in areas such as Provenance and Supply Chain Management (SCM). As previously reported by Blockonomi in January 2019, Carico Café Connoisseur, a Ugandan-based coffee firm announced the utilization of blockchain technology to track goods along its supply chain.

Back in December 2018, TEMCO, an SCM platform unveiled a partnership with bitcoin blockchain developer Rootstock. The pair promised to provide a supply chain solution capable of connecting isolated supply chain systems and offering real-time tracking data to clients.

In January 2019, Havard University revealed its collaboration with The Levi Strauss Company and the New America think tank to develop a blockchain-based platform that could potentially replace external factory health and safety auditors.

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Malta’s Financial Watchdog Highlights Obstacles to Security Tokens After Industry Consultation

The Malta Financial Services Authority (MFSA) has released a feedback statement, unveiling industry answers to questions regarding offerings of security tokens within the country.

In the document published Tuesday, the EU nation’s financial regulator summarized two months of feedback received from market participants over how challenges arising from security token offerings (STOs) “can be tackled in a manner that does not stifle innovation.”

Beginning in July 19, 2019, the consultation process set out to establish “legal certainty” and identify challenges for blockchain-based securities within the Maltese financial markets. Consultation ended on September 16, 2019, with the MFSA having received feedback from 18 industry participants hailing from national agencies, consultancy and law firms, as well as technology providers.

The MFSA focused on the implications of STOs within the framework of European Union legislation, including the Markets in Financial Instruments directive and the Market Abuse Regulation, among others.

The regulator notes in its conclusion that digital ledger-based settlement could provide a “workable solution.” However, it adds that a number of the respondents said, unless there are changes at the EU level relating to central securities depository (CSD) rules, there are obstacles to the introduction of the tech.

Regulations require that transferable securities listed at a trading venue must be recorded in the books of a CSD. The means that the ambitions of security token projects to remove the CSD middleman are not possible without “optimizing” the legislation for distributed ledgers, the regulator said.

It also flagged that while respondents provided much feedback on the securities part of transactions, not much was said about the cash side of settlement. “Certain issues would need to be resolved before secondary market trading for security tokens can take off,” the authority believes.

Clamping down?

Tuesday’s release of the feedback comes days after the MFSA published a statement declaring that crypto exchange Binance, which proclaimed Malta to be its new home two years ago, was not regulated or licensed to operate as an exchange in its jurisdiction.

According to Decrypt, the feedback statement came in response to an article in the Times of Malta, which said Binance was still headquartered in the nation. The exchange says it currently employs only a few customer service agents in Malta, but has been listing the jurisdiction at the top of press releases as recently as this month.

It looks likely that Malta is looking to shed its reputation as a hub for money laundering. Over the past two months, its prime minister has stepped down due to his alleged involvement in the cover-up of the murder of Maltese journalist Daphne Caruana Galizia.

Since then, the MFSA has announced the addition of new leadership, including three UK nationals “with vast experience” in banking supervision, financial crime compliance and conduct supervision.

Part of the shuffling is aimed to help Malta fall more in line with European Central Bank recommendations, according to a press release shared last week.

The MFSA has also been warned that it could be placed on the Financial Action Task Force’s “grey list,” potentially facing legal sanctions, MFSA chief officer for strategy, policy and innovation Chris Buttigieg said.

“We need to raise the bar and ensure that there are certain standards and we need to convince our peers and international institutions that we’re serious in the way we carry out our supervisory financial processes and our enforcement,” he said last week, according to MaltaToday

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