Telcoin, an Asian startup, is pursuing agreements with telecommunications carriers worldwide to let their subscribers send money, pay for things, and receive aid using blockchain-backed tokens. The co
Telcoin, an Asian startup, is pursuing agreements with telecommunications carriers worldwide to let their subscribers send money, pay for things, and receive aid using blockchain-backed tokens. The company has signed proof-of-concept agreements with Etisalat in the United Arab Emirates, the Dutch telco group VEON, and Telecom Tunisie. With Telecom Tunisie, Telcoin plans to integrate its system into the carrier's existing mobile money infrastructure.
Telcoin operates from Singapore with developers based in Tokyo. It will hand out its ERC-20 tokens free to partner carriers who agree to distribute them to customers. Those customers can then use the tokens to send remittances, make peer-to-peer transfers, and pay online. The tokens also enable disaster relief—donors can buy and send them to people's mobile money wallets in crisis zones through text messages or USSD codes, which work on any phone, not just smartphones.
The addressable market is vast. Five billion people own mobile phones. Two billion do not use any formal banking system, according to World Bank data. In the poorest households, more than half the adults lack any bank account. Most of those people do have phones.
Telcoin runs on the Ethereum network and stays agnostic about which digital wallet users prefer. Paul Neuner, the chairman and co-founder, frames the pitch this way: "telecoms are in a unique position to rapidly expand financial inclusion." The company doesn't position itself as a replacement for existing mobile money. Instead, Telcoin's whitepaper lays out the vision: "Our objective is not to compete with telecom mobile money, but to cooperatively participate in the overall mobile money ecosystem. We see ourselves as a complementary solution, a tool that will increasingly bring users to mobile money, cryptocurrency-backed solutions, and mobile wallets. Our goal is to become one of the cornerstone financial inclusion efforts of the 21st century and we want to cooperate with actors who we believe can play a critical role in this process, namely mobile network operators."
M-Pesa proves the concept. Vodafone launched it in Kenya in 2007 as a mobile phone-based money transfer service where users could deposit cash, withdraw it, transfer money to others, and pay for goods and services. The service exploded. By 2010, it ranked as the world's most successful mobile-based financial system in the developing world. M-Pesa now operates across Eastern Africa and Eastern Europe, plus South Africa, Egypt, Afghanistan, and India. As of 2016, the service counted 25 million active users.
Telcoin raised backing from Batara Eto, who co-founded Mixi and manages the venture firm East Ventures. Eto plans to invest in the company's initial coin offering, set to launch on December 11. East Ventures will make a direct investment in Telcoin Pte. Ltd. as well.
