Blockchain Could Save a Country Billions, Report Says

If the United Arab Emirates (UAE) successfully implements emerging blockchain technology, the nation could see a plethora of benefits across the board, according to a joint whitepaper by the Centre for the Fourth industrial Revolution and the World Economic Forum.

How the Middle Eastern nation adopts the new crypto technology could serve as a template for other countries, which are eyeing it. The strategy, was launched in recent years to help advance their legislative efforts, to improve the morale of their citizens, and to advance government efficiency. The strategy intends to provide a “digital transformation” for the UAE.

The government of Virginia is also studying the impacts of blockchain and cryptocurrency, and introduced legislation to form a study group last year dedicated to researching the topic.

For the UAE, the efficiency would occur by the itss reducing printing needs by over 398 billion printed documents annually and saving 77 million work hours annually. Chief among the benefits provided through implementation of blockchain would be the saving of AED 11 billion (USD $3 billion) a year in transactions and documents processed routinely.

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“The use of blockchain technology will not only allow operational cost reduction but will support the digital security of national documents and transactions, as well as accelerating decision-making processes,” the report said.

Small Persian Gulf principalities are serving as proving ground for blockchain. Dubai, under its own blockchain strategy, aspires to become “the hub for blockchain intellectual capital and skill development,” the report noted.

The report emphasized many challenges the UAE may face in adopting and implementing blockchain technology, as shown by historical examples of other jurisdictions who vied to do the same. The challenges are largely societal issues, and not based on the technology itself.

The report’s authors suspect there may be difficulty in aligning the interests of required stakeholders in corporations, service providers and the government. Education of the technology and awareness of its intricacies is also considered to be an important obstacle, as well as unclear regulatory implications.

“Survey participants were unified on the opinion that the core challenges in blockchain implementation remain in the operational and regulatory sphere rather than on the technical side,” the report said.

“The public sector saw education and alignment with stakeholders as the most pressing challenge, whereas the private sector’s key concern resonated around regulatory uncertainty,” the report added.

Those same issues are propping up in the United States as well. The US Senate last summer held hearings on potential regulatory frameworks for digital currencies. “The digital currency and blockchain ecosystem is diverse, and care must be taken in determining what gaps may be present in the existing framework and developing a more comprehensive approach,” said US Sen. Mike Crapo, an Idaho Republican

The UAE and Dubai’s blockchain strategies have so far “advanced the development of a thriving blockchain ecosystem within less than three years, contributing towards the nation’s vision of becoming an innovation-drive economy,” the report said.

The government of Virginia is also studying the impacts of blockchain and cryptocurrency, and introduced legislation to form a study group last year dedicated to researching the topic.

Tags: Blockchain, Cryptocurrency, Dubai, emerging technologies, Middle East, United Arab Emirates

A Michigan police and fire pension fund has filed a class action securities lawsuit against insurance giant Prudential, and its CEO and CFO, for allegedly disseminating false and misleading statements that artificially inflated its stock price.

The suit alleges that the assumptions used by Prudential to establish reserves failed to account for adversely developing mortality experience in its Individual Life business segment. It said the reserves were inadequate to satisfy its future policy benefits liabilities. The action also accuses the company of materially understating its liabilities and overstating net income as a result of flawed assumptions in calculating mortality experience.

The legal action was filed in US District Court in New Jersey by the City of Warren Police and Fire Retirement System. Prudential declined to comment on the lawsuit.

According to the suit, Prudential reported second quarter earnings results in July that missed analyst forecasts. Prudential also announced it would take a pretax charge of $208 million as a result of its market experience update. The company said that the Individual Life business segment had lost $135 million. The suit says, however, that Prudential did not provide information concerning the impact of the revised mortality assumptions on the company’s financial future performance.

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Following the earnings report release, investment bank UBS issued a report lowering its earnings expectations for Prudential. UBS said the company should have disclosed the new negative information at its Investor Day conference in June, which it said would have allowed investors to “reset expectations.”

The suit claims that as a result of the disclosures, Prudential’s stock price fell more than 10% to $91.09 on August 1 from $101.31 on July 31 on more than 7.6 million shares traded.

“When the true facts about the company were revealed to the market,” says the lawsuit, “the inflation in the price of Prudential common stock was removed and the price of Prudential common stock declined dramatically.”

The suit claimed that on August 2 Prudential provided the SEC with additional details concerning the company’s adjustments to operating income by segment during the second quarter. The firm revealed that its Individual Life business segment performed $178 million worse in the second quarter than during the same quarter of 2018. That was primarily because of the $208 million reserve charge from the annual review.

These additional negative disclosures caused Prudential’s stock price to drop another 5.6% to $88.56 on Aug. 2, and it then fell again on Aug. 5 to $85.95 per share, the suit contends.

The “defendants materially misled the investing public, thereby inflating the price of Prudential common stock,” said the suit, “by publicly issuing false and misleading statements and omitting to disclose material facts.”

The case is City of Warren Police and Fire Retirement System v. Prudential Financial, Inc. et al.

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Tags: City of Warren Police and Fire Retirement System, Class Action, Lawsuits, Pension Funds, Prudential, securities