17/06/2016 BBC Business Live

This is Business Live from BBC News, with me, Sally Bundock,

Are banks set to become a thing of the past?

We take a look at Blockchain, the disruptive new technology

that could revolutionise the way we move our money.

Live from London, that's our focus on Friday 17th June.

Blockchain is already at the heart of the Bitcoin network,

but major financial companies are catching on fast.

So how does it work, and is it the right tool that will

We will make sense of this latest idea.

Also in Business Live, Japan on edge about

Finance Minister Taro Aso said today he's "deeply concerned

about the speculative moves", so will we see

The European trading day has been underway for half an hour, the FTSE

100 is almost up 1%. We will talk you through the winners and losers.

And from the biggest event on the gaming calendar

through to Microsoft buying LinkedIn, we'll be taking a look

at the week in technology with our very own Rory Cellan-Jones.

Today, we want to know, as Rolls-Royce announces plans

to produce an all-electric car, would you ditch petrol for electric?

Or is a throaty exhaust note all part of the romance of driving?

Let us know, just use hashtag #BBCBizLive.

Later we will show you pictures of the new Rolls-Royce vehicles, it's

quite something, even with a silver throne. The mind boggles. We will

get to that later. We start in the fast-moving world

of financial technology. This week the City of London

has been hosting the Global Digital Banking Conference,

ahead of London Technology Week One word that's on everyone's

lips, Blockchain. that was developed to underpin

the digital currency Bitcoin. Its fans believe it could soon

revolutionise global finance Under the traditional system,

banks act as a trusted middleman, processing transactions

and recording them If I want to pay money to you,

they process the transaction and record it in a single

centralised ledger. Under the new system,

there is no middle man. The ledger of transactions

is effectively shared across thousands or even millions

of computers around the world. When a transaction is made

between the two parties, it is broadcast to everyone

else in the network. Everyone's ledger is updated -

that shared record is what's Some banks are believing that this

is the future. Santander estimates

the technology could dramatically cut infrastructure costs for banks

by up to $20 billion by 2022. A number of banks are now testing

Blockchain technology. Warren Mead is global head

of FinTech at KPMG and joins me now. Sally has done a brilliant job of

explaining how it works but will it actually worked in practice and will

it save all of this money that banks are talking about. There is a

healthy dose of scepticism? There is and the reality is that nobody knows

yet. We are at least five years ago and maybe ten from a wide scale use

of block chain which will change the way customers transact. That is a

long time in terms of tag, why will it take so long to get this up and

running? At the moment most banks are just experimenting with

Blockchain. There is still a long way to go because this is about

transact in with customer money and you have to be making sure that is

secure before you can do that. How do customers benefit from

Blockchain? Why does it make a difference to me if my transaction

goes through Blockchain the normal routes? Transacting money is only

one of the uses that people are thinking about. They'll also about

using it as a way to identify who you are and cut down on the

time-consuming processes when you open a bank account or apply for a

mortgage. You won't have to do that any more? You would have to do it

once but not every time you take a new financial product from a new

provider. It could also reduce the costs of transactions and in the

end, that will benefit customers. What about security and

transparency? Where is it in terms of those aspects? The view is that

when it is fully developed it will be more secure and resilient from

things like cyber attacks. How will it be more secure because lots of

different banks are getting involved in one transaction? Because today,

if you have data it is on one database and if you want to change

that you have two breakthrough one firewall and change the data in one

place but hate you have to change it in 20, 30, 40 places and it makes it

really tough for cyber terrorists. Interesting. Who knows whether we

will see Blockchain coming out in the coming years. Thank you. Let's

take a look at some other business stories.

The gap between the rich and poor in the US is getting wider

despite its recovery from the global recession.

The Organisation for Economic Co-operation

and Development says US economic output has jumped 10%

past its pre-crisis peak in 2008, outstripping other major economies

But the gains are not being evenly shared -

with women and minorities "faring less well" according to the OECD.

It suggests raising the minimum wage, boosting income tax credit

and helping people back to work through skills programmes.

Volkswagen plans to launch 30 all-electric models

to reposition itself as a leader in "green" transport.

Matthias Muller, chief executive of Europe's biggest car-maker,

said huge investments would be needed as the firm moves

He hopes that by 2025, all-electric cars would account

for about 20 to 25% of the German car-maker's annual sales.

Latest figures show that sales growth of Volkswagen-branded cars

continues to fall behind European rivals.

Ultra-luxury car-maker Rolls Royce is also planning

The brand - which is owned by Germany's BMW -

has unveiled the zero-emission Rolls of the future.

You can see it here, what do you think? Send your answers on Twitter.

The 103 EX is almost six metres long and will drive itself

using artificial intelligence - but won't be available until 2040.

The CEO says in the future - not everyone will want to sit

And it has a silver throne. It looks like the Batmobile. It looks

enormous. I don't think I will ever get to sit in one of those. Let's

move on to Japan. In Japan, the yen has

been on the rise. The currency moves have caused

concern for the country's Christine Hah has been

following the story from Singapore. It's nice to see you, Christine.

More voices coming from Japanese authorities about the yen, and they

are concerned? Yes. We heard some strong words from Japan's finance

minister Taro Aso on Friday. He called it one-sided and speculation

driven and he would act more firmly than before if the yen continues to

appreciate. This is after hitting multiyear highs against the dollar

and euro on Thursday. They left rates unchanged. It is the finance

ministry that decides on policy, they do it through the bank of Japan

but they decide whether to intervene or not. Some people are reading this

as an indication that Japan may directly interfere with the yen if

it continues on this trajectory. The last time they did that was in late

2011. Taro Aso's stance was consistent with the Group of seven

and group of 20 countries and that is certainly true, but it's worth

noting that those two groups specifically spoke out against any

kind of currency intervention. I remember it well. Thank you very

much, Christine. We will be keeping an eye on what Japan or what it

chooses to do. The main stock market had a better day, up over 1% but

let's not forget it lost quite a lot of ground this week so 1% is not

much in the light of losses that it made during the week. The yen

weakened a little today, so that really helped. As you can see, at

the moment we have games across the board in Europe, certainly 1% or

more, which is interesting. The markets are taking a pause from some

of the concern and uncertainty about what may happen next week with the

UK referendum. We will talk more about Europe in a second but first

let's hear from Samira Hussain. Investors in America's auto industry

will have their eye on a Manhattan General Motors is due

to make its case to judge Jesse Fuhrman is that dozens

of lawsuits on behalf of customers who had cars recall for safety

reasons should be dismissed. The vehicles were recalled

to replace a faulty ignition switch that GM used in some

models for years. The lawsuits that GM wants dismissed

are seeking billions of dollars Also on Friday, America's biggest

mobile phone carrier Verison communications is hoping unions

will formally ratify the deal to end the strike that saw 40,000 workers

walk off the job for seven weeks. investment director

at Rathbone Investment Management. Good morning. You have been keeping

an eye on the European markets and they have somewhat rebranded today?

Yes, we are going through a period of pre-random nerds and the markets

are trying to work out what's going on and the polls are indicating a

move towards Leave on one hand but the bookies are still indicating

Remain. It's a confused picture. There is a lot of positioning ahead

of that referendum next week. Also a lot going on with the currency

markets. We are hearing from Christine about the Japanese yen and

lots of voices error in their views in the Japanese government, they are

really concerned about this? They are. The Japanese finance ministry

is likely to wait until the referendum is over because this is a

sort of short-term period of adjustment. It seems that it would

be such a distorting short-term event that it would be difficult to

override that. Otherwise, yes, if the strength continues afterwards we

may well see intervention. The pound has ranked and a bit as well? Yes,

the main effect, most commentators think the main effect of Brexit will

be weakness in the sterling between 7-12%. Something like that. We have

already seen some of that and currency traders are beginning to

say, should I be buying yen or dollar? Should I be buying Swiss

francs? A lot of trade and positioning ahead of the referendum.

That is what Taro Aso was talking about, the Japanese finance

minister, it is speculative behaviour that is exacerbating

things. Short-term gains or losses depending on whether they get it

right or not. See you soon. We'll take a look at Microsoft's

biggest-ever acquisition. Our technology correspondent

Rory Cellan Jones will joins us on set to explain why the software

giant wants to join forces with the professional

network site LinkedIn. You're with Business

Live from BBC News. Let's give you some more detail on

the story we mentioned earlier, the gap between the rich and poor in the

US is getting wider and wider despite the fact the economy has

recovered rather well. Absolutely. from the Organisation for Economic

Co-operation and Development. Joining us to discuss the report

is Jane Foley from Rabobank. Jane, you have been looking at this

report in detail, let's start with what it tells us about inequality in

the US, this is not just a US story, this is a story that reverberates in

the UK, to? That's exactly right, the UK and Australia and many

countries, we are seeing worsening income inequality and wealth

inequality, it is worsening. In terms of income inequality we have

heard a lot in recent years about productivity growth, that just means

output per head, and that has been very low in recent years and that is

true in many countries and it means that people don't get decent wage

rises and without that they don't see in comes going up, their wealth

going up etc. This is one of the reasons so it is worrying that we

are seeing not even the richest 1% but the richest 0.01%, something

like 10% of the wealth in the US. This is perhaps part of the reason

why voters are so disgruntled, what we have seen in Europe and the US

are moves towards the far left and far right, voters wanting strongmen

politics. It is becoming embedded in society. It is interesting as well

because when I looked at the report I immediately thought about other

stories that we often cover about company bosses and what they are

earning, and the revolts we have seen at AGMs, and the fact that even

company wages are getting further and further away from those they

employ. You are right, and in fact many economists think that as we get

more robots this will make it even worse and some economists say that

the owners of the technology and the robots will get them in huge slice

of income and wealth that comes from that, and the rest of us will have

much lower paid jobs. Not all economists agree with this but this

topic is up for debate and has been for the last couple of years and

clearly we won't hear the end of it yet.

If you have any stories you would like to discuss with us or you want

to see the latest stories, go to the BBC Business website.

You're watching Business Live, our top story:

Global finance experts have been meeting in London to talk about an

upcoming technology called blockchain. Some experts predict

this could cut banking costs by some $20 billion by 2022.

And it has been a busy week in technology.

There's been the E3 gaming expo in the US, where software firms

have released their latest offerings in the battle of the consoles.

Apple's developer conference saw new releases,

including bringing Siri, its digital assistant, to Macs.

the professional networking site LinkedIn for %26 billion.

Our technology correspondent Rory Cellan-Jones is with us.

You have been covering every twist and turn, shall we start with

Microsoft and LinkedIn? Such a huge deal, $26 billion. Now, LinkedIn is

very popular, I hesitate to use that word, because it is also massively

unpopular with people being bombarded with e-mails asking to be

endorsed for broadcasting skills - that is the one I send out every

time, nobody replies! But only a quarter of its members, about 106

million, visit every month. Most people hardly ever go there, and

when you do the maths, Microsoft has paid $247 for each one of those

active users. So the big question is, what kind of value will they get

out of them? The bear case is that this is a bad Microsoft deal,

another Nokia. But I have been reading some convincing stuff about

how vital this is to their mission due maintained their self as a tea

software and services supplier to the corporate world. -- their

mission to maintain their position as a key software. Facebook is

trying to do some of that networking for business, what it does for all

of us in our personal stuff, but Microsoft might think that the data

embedded in LinkedIn might be worthwhile. I know they are totally

different business models in a sense, but LinkedIn, you said

monthly active users was 100 million, Facebook is at 1 billion.

1.6 billion. It gives you a sense of the scale. Very different business

models, LinkedIn makes most of its money from recruitment advertising.

Let's talk about the gaming conference in LA, what with a big

beans? Exactly the same theme as last year, virtual reality, except

that last year it was all a bit theoretical, this is going to be

huge. -- what were the big themes? This year we got to see some games,

we have got some big stuff out already, Oculus Rift, and the HTC

Vice. What is the take-up like? It is early days, it is very expensive.

The thing that everybody is waiting for is Sony showed off a whole bunch

of games at E3, they are bringing out a headset in the autumn. Have

you tried it? I have tried all sorts, and the first time you do it,

it is amazing! Do you feel a bit sick? The key advance they have made

is that it doesn't usually make you feel sick. You do feel completely

immersed in a different world. My slight concern is that is the first

time, the second time, you think that is good, and the third time,

what am I doing here plans? But there is an enormous amount of money

being bet on this being a huge thing, not just in games, but in all

sorts of areas of life. We have to get onto the polite Google story, I

missed this one. At a time with a lot of depressing news about hate

speech on the internet, I am old-fashioned, I don't like to see

people using foul language. There is a lot of very nasty stuff on the

internet. This was wonderful, a young man on Twitter posted the

fact, look what my Nana has posted. Please translate these Roman

numerals, thank you. She put please and thank you in the Google search.

I wonder what the search came back with! I think it worked. But to see

somebody... We are moving into an age where we will be interacting

with software, and robots a lot more, and maybe we should say... I

think we should be polite to robots, and this lady has actually showed us

the way, shown us the way to a better, kinder way of speaking on

the internet. And a nicer way of interacting with machines. Rory,

thank you very much indeed. It has been an enormous pleasure, I can't

express how marvellous it has been. You are welcome!

From computer code to something a bit more organic now -

not to mention controversial - because we are also

Since it was legalised for medicinal use in 25 US states,

marijuana has entered the world of high finance.

Last year, sales surged to almost $5.5 billion.

This Friday, we have seen Microsoft tying up

with Kind Financial, a tech start-up

that helps regulators track sales of legalised marijuana.

But investors are still cautious about wagering on the weed.

Samira Hussain took a trip to the Cannabis World Congress

since the days of rolling a joint in your mom's basement.

In the US, legal marijuana has grown into a multibillion-dollar industry.

But the sector is hungry for recognition and cash.

This woman has come to the Cannabis Expo with her son.

After using marijuana to treat her pain,

I used all of the tinctures and the bongs,

I was able to work and move and do things

I could not even imagine getting up and doing anything.

The challenge for many of these companies is getting funding.

Because the law has not caught up to these new businesses many big

investors like pension funds and banks are not legally

allowed to put their money anywhere near here.

Over the next five years, you are going to see federal

prohibition go away, and this industry will be devolved,

and if you look at the trajectory of the last five years,

people on that trajectory, this will all be cleaned up in five years.

Rob Hunter agrees - he runs one of the largest

private-equity funds dedicated to cannabis.

He has been in the business 16 years.

And he knows just how much money there is to be

This past year, the United States saw $5.8 billion

That is expected to be over $10 billion this year.

It is expected to be as much as $20 billion by 2020.

you are watching the industry mature at a very rapid rate as a result.

As others get a whiff of marijuana's potential,

early investors hope to continue riding high.

We asked not to live that story on that occasion, didn't we? Health and

safety and all that! Jane Sydenham is to talk us through some of the

stories of the day, thank you for your tweets, James said, I would not

switch to Rolls-Royce and electric if they came looking like that, but

as the have made electric cars cool again. Are you a petrol head? Or an

electric egg? I am electric, I am going to save the planet! Let's go

through the stories, HSBC, interesting light of the share price

movement, it has agreed to pay more than ?1 billion to settle a

securities fraud class action. We were expecting them to pay more.

Yes, we were. This is all to do with the finance business that they

bought, and which arguably was the first evidence we saw of the

problems caused by the financial crisis, or in the run-up to it. But

yes, it is good for them to be in the clear. The story had gone away

for a while, banks, fines, slapping on the wrist. It just shows you how

complicated these things up. Rumbling on in the background all

the time. Let's talk about Uber, apparently launching a UK food

delivery service, this is in the Financial Times. This will be

interesting, because a lot of companies already do just this. It

looks like they are looking for every avenue where it can get a

piece of the action. It is trying to capitalise on its brand, and it will

be direct competition to companies like Deliveroo. The indication is it

will be broadly similar, the same kind of model, so it is more

competition, which make cut prices. Whether or not it will boost the

market remains to be seen. More traffic, more people on the roads,

in bikes or cars or whatever. I know that when I ordered delivery from

other delivery services, they do use bicycles. Yes, they do. The

suggestion with Uber is not that they will put food in a cab, it is

still going to come on a bike. Let's talk about national grid, needs to

be overhauled, so says the energy committee in the UK. For those of

you watching overseas, that is the system through which we get

electricity. Yes, there is an inherent conflict of interest

between private ownership of that, and also the actual distribution

across the marketplace. We will have to see what happens, but the market

needs reform. Good morning. There should be drier

weather around for most of us through the course of the weekend,

but