A managing director for Accenture has published a new blog post detailing why he believes the insurance industry will move to embrace the blockchain within the "next few years".

Abizer Rangwala, who focuses on insurance IT strategy for the professional services firm, wrote on 4th January that he expects the technology to "have a profound effect on business", adding that, in his opinion, this impact is already underway.

Rangwala wrote:

"Insurance is gaining momentum in the use of blockchain and slowly figuring out the true business use or to some degree what the use case should be. I have no doubt that within the next few years it will be a major technology in the insurance ecosystem."

Some major insurance companies have already begun exploring proofs-of-concept that utilize a blockchain. Last year, insurance firm Lloyd's indicated its support for using the technology within the London Market, the UK-based international insurance market.

Rangwala went on to speculate that while it may take some time for specific products to emerge within the insurance market that utilize a blockchain, there are some indications of what those offerings may look like, including those that operate on a peer-to-peer scale.

"The effect of blockchain for insurance products is a not as clear-cut and will likely take longer to emerge than for banking," he wrote. "The speed and ease with which contracts could be changed and the time-stamping feature of blockchain could, for example, facilitate individualized contracts that reflect actual risk, such as on-demand auto insurance effective only during hours a car is being driven."

Accenture has pushed for financial firms to embrace the blockchain in past reports, and in July added Bitspark to its Asia-Pacific financial tech accelerator.

The firm has also called for regulators to increase oversight of bitcoin wallets, calling for the creation of "reasonable and proportionate" rules governing wallet offerings. Overbearing regulation, Accenture wrote in a submission to the UK government, could "stifle innovation".

Accenture image via Franz Conde for Flickr

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Microsoft has announced the latest update to its forthcoming blockchain-as-a-service (BaaS) offering for its cloud-based Azure platform.

In a blog post, US financial services strategy director Marley Gray indicated four new partners have joined the project, including bitcoin payment processor BitPay; blockchain rewards platform Manifold Technology; bitcoin tax service LibraTax; and proof-of-ownership blockchain service Emercoin.

With more than $32m in venture capital raised, BitPay is the best-funded startup to join the Azure blockchain offering, with the majority of those involved being smaller, early-stage blockchain startups and decentralized projects.

BitPay told CoinDesk that Bitcore, its open-source bitcoin full node and development service, will be the offering that is added to the platform.

First revealed in late October, partners on the Microsoft service already include startups CoinPrism, ConsenSys, Eris Industries and Factom. Microsoft has also indicated it is exploring how to add support for the Interledger protocol, created by blockchain startup Ripple.

Gray further indicated that more names are likely to be added to the Azure platform over "the next several weeks" as it prepares for formal launch.

Microsoft image via Shutterstock

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A legislative effort in Pennsylvania to update the state’s definition of money to cover digital currencies was reportedly stalled last year due to an ongoing budget impasse.

In an interview with regional news source The Herald-Mail, state representative Adam Harris said that planned hearings on a bill filed last March fell to the wayside amid a budget dispute between the state legislature and Governor Tom Wolf.

Harris said in the interview:

“One interesting issue that the Commerce Committee has been working on is an update to the 'money transmitters' section of state law as it relates to virtual currency such as bitcoin. It has been a fascinating and complex issue to study, but unfortunately with the budget impasse, we have had to cancel hearings we were planning to have on this issue."

Harris, a Republican elected in 2002, went on to suggest that lawmakers are weighing both the technology's use today as well as potential applications in the years ahead.

"The biggest question to me is whether this is simply a passing fad or a legitimate currency that will radically alter the way we do banking and make payments in the future," he told the publication.

According to the draft text of the bill, the updated definition of money would mean a unit that "is generally recognized as a medium of exchange and shall include any form of virtual currency".

A memo published on 16th March, penned by Mackenzie, states that the bill is intended to "update the definitions and terminology used in the statute", among other items, and draws on suggestions from Pennsylvania's Department of Banking and Securities.

The bill's author, Representative Ryan Mackenzie, did not immediately respond to a request for comment.

2015 saw a number of efforts in US states to legislate new rules for bitcoin activities and firms, or expand existing statutes to cover the technology.

North Carolina proposed a bill last summer that, like the proposed Pennsylvania bill, would have altered the state’s money transmission laws to include digital currencies. The state later chose to exempt some entities, including miners, from being considered money transmitters.

Other states are pushing for tighter rules that would require certain companies to obtain licensure.

However, New York is the only US state to institute a licensure for applicable firms.

Image via Shutterstock

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A report on the use of blockchain technology as a mechanism for storing state records is set to be delivered to the Vermont legislature by 15th January.

According to a summary of the bill, the study is intended to explore "opportunities and risks" for storing electronic facts using blockchain technology. The final version of the bill also requires that the report focus on addressing "unresolved regulatory issues".

The mandate for the study was part of an economic development bill signed into law last summer by Governor Peter Shumlin.

The law instructs the state's Attorney General, the Secretary of State and the Department of Financial Regulation to develop the report and draw from insight from the Center for Legal Innovation at Vermont Law School and the Uniform Law Commission.

According to attorney Carl Lisman, a ULC commissioner who has taken part in the drafting of the report, it is "almost, but not yet, complete". He declined to divulge details on the contents or conclusions of the report.

While the state may be looking to adopt the technology for record-keeping purposes, Vermont has already taken steps to regulate aspects of its local digital currency ecosystem.

Susan Donegan, commissioner of the state’s Department of Financial Regulation, told CoinDesk last year that her agency is applying existing statutes to businesses working with the technology.

Representatives of the Attorney General, the Secretary of State, the Department of Financial Regulation and the Center for Legal Innovation at Vermont Law School did not immediately respond to CoinDesk’s requests for comment.

Vermont legislature image via Shutterstock

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John Biggs is a New York-based writer who, after spending years as a programmer, decided to become a full-time journalist. His work has appeared in publications such as The New York Times, Gizmodo and Men's Health. Biggs is currently a writer for TechCrunch and is the CEO of stealth bitcoin startup Freemit.

I had family that lived in Rypin, Poland.

We went to visit every few years during the 1980s and 1990s, the whole American side winging over to Warsaw in an LOT 747 with a wonky overhead projector that played third-run movies and a staff that was at once kind and surly.

We'd ride from Warsaw's airport in a taxi piloted by a mustachioed man who asked for about $60 to carry us 155 kilometers in his FSO Polonez – popular in the 1980s because it fit more than two people and wasn't quite a death trap.

When we finally got to the small town in the middle of nowhere we would end up in what looked like an abandoned settlement. A delicate skein of coal smoke fell over the streets at night – people were home – and dogs barked in the distance but there were few people visible in town.

Then there were the rows of empty houses.

The 1990s brought a post-soviet drain that sapped Poland of its professionals, and in 2004, when the EU opened the border, Poland lost many more. The resulting exodus emptied out towns like Rypin, leaving homes desolate and construction unfinished.

Row after row of houses were left incomplete, plastic billowing in empty windows and wooden floors ruined in the rain.

The plan for many was to send cash home to complete the job but, in the end, it was easier to abandon all their hard work.

Movement of money

This was the first time I saw the power of migration.

It was the first time I understood what happens when a poorer country is welcomed by a richer one, the things that change, the things that improve, the things that fail. Some of my relatives had left earlier, long before the drain, but I understood the results of their actions. They had brought me up in a place that had no empty houses and no migrations.

But this exodus happens in every country almost every year and for almost every reason. Poland’s brain drain was, in the end, beneficial to those that emigrated and it spurred an intellectual and entrepreneurial revolution when all those Poles came back home.

But in some sad cases – Syria’s escaping refugees are the most poignant – the moves are forced and the results are terrible.

These mass migrations create problem after problem, and the problems are primarily rooted in the motion of money. The unmoored become the unbanked and the unbanked fall prey to all sorts of predators who dedicate their lives and businesses to charging predatory fees for basic services we take for granted.

Why was construction halted in Rypin? There was no way to get money back home to finish the work. Why are the refugees giving up everything and leaving their homes? Because there is no sane way to move wealth out of war-torn areas into safer ones.

In short, there is a gulf between the reality of sending money and the reality of money transfers. In both cases – for the unbanked and the overly mobile – the fees associated with sending money are based on technologies pioneered in the 19th century.

It’s like we’ve connected our entire modern economic system to a noisy steam engine and expected it to perform like a V8.

That's my prediction for 2016: the world will change in ways that are yet unrecognizable to us. I'm not so naive as to say that bitcoin will help the refugee crisis. But I am optimistic enough to see a way forward for the unbanked and underbanked. I see a way for the escapee to send money home back to those she left. I see a way for the foreign worker to keep the fires burning in the hearth of home and for grandma to get the food and medicine she needs while her children and grandchildren are off changing the world.

Rypin didn't have to empty out and, if you go back today, you'll find a thriving little community. The doldrums of my youth have been replaced by a city on the edge of prosperity.

A quiet revolution

I've watched technological advances help the few over and over again.

While efforts at 3-D printing and STEM education are aimed at the world, they often fall short of the mark. Why? Because they require investment on the ground and that requires a solid and usable money transfer system.

For every feel-good story of technology air-dropped into remote areas, we find 10 places where that technology does not exist. But just as the Internet tore down informational disparities, technologies like bitcoin tear down economic disparities.

There can be no more excuses for a dedicated person not to learn from the world's biggest store of intellectual value, and there can be no more excuses for a dedicated person not to gain from the world's newest store of economic value.

The seemingly sad thing is that the coming revolution will be a quiet one.

Like all great technologies bitcoin will be soon be hidden deep behind a myriad of services and tools. It will become an anonymous pipe, understood by a high priesthood yet used by everyone. There's a reason Satoshi, bitcoin's inventor, is anonymous: he or they or she cannot become a figurehead for this new technology, just as Sir Tim Berners Lee cannot be the prime mover of the Web.

The web of money is coming and it will soon saturate our world as deeply as the Internet has.

In the end, the web of money is about sending money to places that need it. It is a great leveler, a way to make quiet places full of drifting coal smoke and lonely dogs vibrant again.

It's a way to empower the poor as they move over borders to better lives and it's a way to bring them home again when they are ready to reclaim all that they left. And, in the end, money becomes a message of home, divorced from the mess that came before. That's my hope for 2016 and beyond.

Migrants image via Janossy Gergely / Shutterstock.com

Disclaimer: The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, CoinDesk.

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Jason Weinstein and Alan Cohn are attorneys at Steptoe & Johnson LLP in Washington DC, and counsels to the Blockchain Alliance.

Jason previously served as deputy assistant attorney general at the Department of Justice and serves on the advisory boards of BitFury, the Chamber of Digital Commerce and Coin Center. Alan served as assistant secretary for strategy, planning, analysis and risk at the Department of Homeland Security.

After an eventful 2015 for bitcoin and the blockchain, what's in store on the regulatory and enforcement front in 2016?

Here are some things to watch:

1. Policing of onramps and offramps

With multiple federal regulatory agencies having outlined their mandates in the bitcoin and blockchain space and laid down how they intend to treat digital currencies, we are increasingly likely to see 'regulation by enforcement' next year.

That is, we may see more enforcement actions brought against particular industry companies, sending a message to other firms about how agency rules will be applied in practice.

The obvious focus of enforcement will be money service businesses (MSBs), which sit at the intersection between bitcoin and other digital currencies and fiat currencies.

While up to now some of these cases have involved 'low-hanging fruit' – companies where there was allegedly clear evidence of intentional failure to comply with anti-money laundering (AML) rules – these cases still should incentivise all companies that qualify as MSBs to ensure that they have an appropriate risk-based AML compliance program in place and that they take seriously the obligation to file suspicious activity reports (SARs) where appropriate.

But even beyond MSBs, don’t be surprised to see the Financial Crimes Enforcement Network (FinCEN), the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) continue to police the activities of bitcoin and digital currency businesses within their purview in the year ahead.

2. Spotlight on terror financing

In the wake of the tragic terrorist attacks in Paris, there understandably has been increased focus by governments and the media on the ways that terrorists communicate and move money.

Some of that attention has been directed at bitcoin and other digital currencies.

Still, governmental authorities have recognized that the traditional financial system presents at least as high, if not a much higher, risk.

Indeed, the UK Treasury recently released a risk assessment of money laundering and terrorist financing, finding that digital currencies present the lowest risk for money laundering and that there was “little evidence to indicate that the use of digital currencies has been adopted by criminals involved in terrorist financing”.

That said, the reality is that terrorists and criminals are using all sorts of technologies to try to hide their activities over the Internet and there is unquestionably a risk that they could seek to use digital currencies to help finance their operations.

This greater anxiety about terrorist threats will naturally being increased attention to the risks posed by possible terrorist misuse of digital currencies.

The best way for the industry to help address these concerns is through education, engagement and dialogue with law enforcement agencies.

3. Scrutiny of blockchain applications

This year has seen an explosion of blockchain-related activity among 'traditional' financial services institutions, developing applications for either the bitcoin blockchain or for proprietary blockchains or blockchain-like systems.

Blockchain-based applications have the potential to reduce transaction fees and other frictional costs, and to improve compliance efforts by the inherently transparent nature of the blockchain's decentralized and immutable record of transactions..

However, as more 'traditional' service providers move to blockchain-based applications, look for regulatory agencies in particular to stake out their territory, first through surveys and informational meetings, but then through targeted investigations and perhaps even enforcement actions.

4. Bitcoin's reputation improved

This past October, a broad coalition of industry representatives, led by the Chamber of Digital Commerce and Coin Center joined forces to create the 'Blockchain Alliance', a public-private forum to help combat criminal activity involving bitcoin and the blockchain.

The Blockchain Alliance serves as a resource for law enforcement to benefit from the expertise of some of the brightest minds in the blockchain industry for technical assistance in response to challenges faced during investigations.

It also provides a resource for the blockchain community to understand the interests and concerns of law enforcement and regulators about the blockchain and its applications, and serves as a mechanism for open dialogue between law enforcement and industry about issues of concern.

By providing this resource to law enforcement, industry participants can help protect public safety while at the same time combating misperceptions about bitcoin and further demonstrating the industry’s good-faith efforts to cooperate with investigations.

Although the Blockchain Alliance is in just its first few months of operation, we have already made great strides in improving government perceptions of the industry, while helping communicate that our companies are good corporate citizens.

And reflecting the global nature of the industry and the perception problems it faces, the Alliance has expanded to include not just US enforcement agencies, but also Europol and Interpol.

We predict that the positive engagement being undertaken by the Blockchain Alliance will help government agencies develop a better understanding of the benefits of bitcoin and the blockchain, and will help foster an approach to enforcement and regulation that supports innovation and growth, so this transformative technology can reach new heights in 2016 – and beyond.

Legal image via Shutterstock

Disclaimer: The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, CoinDesk.

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