Page 57 - FIGI: Security Aspects of Distributed Ledger Technologies

Annex C Examples of DLTs Used In a
Financial Inclusion Context 416

ASSET VERIFICATION In June 2018, BanQu piloted a new partnership
Property and Land Registers with the world’s largest brewer, Anheuser-Busch
Similar to identity, property, or land registry formal- InBev, working to connect 2,000 Zambian farm-
ization, can be another hindrance for those finan- ers to the mobile platform as they harvest and sell
cially excluded to enter or participate in a formal a projected 2,000 tonnes of cassava, producing a
economy. Although people may own small plots of high-quality starch used in beer—by the end of Zam-
land, dwellings, vehicles, and equipment, they are bia’s growing season in August. 422
not able to monetize these assets as collateral due
to the lack of formal legal title to those assets. The CREDIT
417
causes of this are said to be from poorly resourced Credit Bureaus
and often corrupt bureaucracies making it relatively Sierra Leone is setting out to build one of the most
easy to change the land records by bribing some- advanced, secure credit bureaus using the Kiva
one. Time-stamping these records on a DL may make protocol. Along with provision of digital IDs on the
423
altering this data very difficult. 418 Kiva DL, the plan is to provide citizens with personal
However, high initial capital costs could, as with identification tools and a personal digital wallet with
the adoption of any new technology, be a deterrent their credit history. Government and non-Kiva part-
to the implementation of these systems, especial- ners can use the credit score on the Kiva blockchain
ly when there is no existing map of planned roads, as a valid credit score before commissioning loans.
land plots, or zones that indicate proper location or Citizens can choose to reveal their score to whoever
boundaries of the property. Barriers to reliable elec- they please, giving residents greater control of their
tronic land records are typically not in the data struc- data and credit score, according to the announce-
ture used to store them but in the acquisition of reli- ment. 424
able source data.
DLTs can help solve these encumbrances by lower- FINANCIAL SYSTEMS
ing the cost of land titling and formalization through Interbank Transfers
databases that work with the local governments Crypto-assets can act as a bridge between fiat
to record and track land title transactions, allowing currencies that allows financial institutions to access
unbanked individuals to enter and benefit to some liquidity on demand, without having to pre-fund
extent from the formal financial system. Property accounts in the destination country. For example,
419
titles could then be effected and verified without a crypto-currency network Ripple is using its global
centralized third party. RippleNet payment system to connect a number of
In the Republic of Georgia, the National Agency developing countries together to undertake inter-
of Public Registry plans to utilize a permissioned bank transfers through the XRP crypto-currency.
blockchain to develop a permanent and secure land The solution - especially since it bypasses SWIFT -
title record system to track all land title transactions is touted as solution to de-risking, inserting liquidity
across the country. In Chandigarh City in India, into markets by enabling remittance flows to coun-
420
ConsenSys is building a platform for easy tracking of tries that have been impacted by removal or refusal
all the state level financial services. Since Blockchain of correspondent banking relationships, as well as
is a fairly transparent mechanism, there is the least facilitating trade finance. Ripple’s XRP asset using
425
probability of corruption. The second benefit would its XRapid system has been in place for interbank
be about the land records. Similar pilots in Ghana and transfers and are finalized over the local payment
Sweden use DLT as a decentralized land registry. 421 systems, which added just over two minutes to
In LATAM, BanQu is piloting small-plot farmer payments, speeding up from settlement times of 2-3
land mapping, especially for women farmers in Latin days on legacy systems. Portions of the payment
America, where access to finance is hard due to lack that rely on XRP last 2-3 seconds, minimizing expo-
of land rights and outdated property registries. sure to price volatility. 426

Security Aspects of Distributed Ledger Technologies 55