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Project Pigeon Consortium Creates Working Group for Blockchain Governance in APAC

Project Pigeon Consortium: Advancing Blockchain Governance in APAC

In a significant step forward for the blockchain industry, the Project Pigeon consortium has officially launched a working group aimed at enhancing governance standards for permissionless blockchains across the Asia-Pacific (APAC) region. This initiative is a collaboration between several key organizations, including Elliptic, the Digital Asset Association (DAA), the Responsible Fintech Institute (RFI), and Baker McKenzie Wong Leow. The working group's goal is to provide essential frameworks that promote safe and compliant innovation on public blockchain networks, thereby assuring financial institutions that they can operate securely in a rapidly changing regulatory landscape.

The Name and Inspiration Behind Project Pigeon

The name Project Pigeon draws inspiration from the messenger pigeon, symbolizing the consortium's commitment to establishing trusted governance frameworks that facilitate secure communication and value transfers within open, decentralized blockchain environments. This initiative is particularly timely, following the Monetary Authority of Singapore's (MAS) recent consultation paper concerning the prudential treatment of crypto assets in permissionless blockchain settings.

Key Objectives and Risk Pillars

One of the chief objectives of Project Pigeon is to aid banks and financial institutions in navigating the regulatory considerations outlined in the MAS's consultation. The working group has structured its framework around four crucial risk pillars, each helmed by a consortium co-convener:

1. Governance Risk (led by RFI): This aspect focuses on issues like node concentration, governance transparency, and accountability in decentralized ecosystems.
2. Technology Risk (led by DAA): This pillar aims to address potential threats like 51% attacks, vulnerabilities in protocols, exploits in smart contracts, and various infrastructure risks.
3. Settlement Finality Risk (led by Baker McKenzie): This area evaluates consensus mechanisms and seeks to clarify the legal certainty surrounding settlement processes.
4. AML/CFT Risk (led by Elliptic): This pillar tackles challenges associated with pseudonymity, enforces effective sanctions screening, and ensures compliance with regulations like the Travel Rule.

A Diverse Coalition for Comprehensive Solutions

The working group has assembled a broad coalition of stakeholders, including banks, cryptocurrency firms, digital asset exchanges, and traditional financial institutions from across the APAC region. Recognizing the initiative's significance, regulatory bodies will be included in observer and consulting roles.

Structured Approach and Regular Engagement

Baker McKenzie has taken on the role of official secretariat for the consortium, providing editorial oversight and facilitating engagement with regulators. The project operates with a structured approach, including bi-weekly plenary sessions and monthly reviews by a central Steering Committee comprising DAA, RFI, Elliptic, and Baker McKenzie.