Cryptocurrency has seen increased growth and greater demand for it in Asia in recent weeks. Bitcoin’s value topped US$10,000 (S$13,475) for the first time this month, despite pricing volatility earlier in the month and amid concerns over cryptocurrency risks.
Now there is growing interest to get cryptocurrency into the hands of people in Asia who do not use banking services. This will be done using mobile phones, and it could make financial services more accessible to many more people.
Telecom cryptocurrency, as this is called, is attractive to more Asian high net worth individuals, venture capitalists and angel investors who want to diversify their investment portfolios. For these people, telecom cryptocurrency has three advantages: trust, reach, and Know-Your-Customer (KYC) compliance.
Why telecom cryptocurrency?
- Cryptocurrency has the potential to reach some two billion unbanked people. Using cryptocurrency, mobile phone subscribers in emerging and developing markets who do not have bank accounts can have better access to mobile money for transactions, such as remittances. The remittances market is ripe for disruption by the entry of telecom cryptocurrency.
- Cryptocurrencies that are tied to telecommunications will likely stand out from other initial coin offerings (ICO) because of its KYC framework, which ensures that transactions are transparent and traceable.
- Recent examples of telecom cryptocurrency use show that it opens more avenues to capital, and also provides easier ways of sending and receiving remittances, making inbound and outbound roaming payments, and providing international aid to remote areas.
The power to unlock the unbanked economy of two billion people
Currently, more than two billion people have no access to formal banking services. In South-east Asia, only 27 per cent of the population have bank accounts. This means there are 438 million people who are unbanked – they represent a large untapped pool that could be unlocked by telecom cryptocurrency.
The power to transform the telecommunications industry
According to a recent Telcoin study, cryptocurrency taps into the synergies between the reach of mobile telecoms and the fast, borderless nature of blockchain technology. Through telecom providers, Telcoin gives unbanked people access to the digital economy for services such as online remittances, payments, and e-commerce.
This dovetails with telcos around the world that are seeking ways to innovate and bring greater value to their customers, including offering mobile financial services. Telecom cryptocurrency can step into this area to help expand the adoption of mobile money among people.
Increased transparency with telecom cryptocurrency
While cryptocurrency is developing at an exponential rate, some governments have been cautious in their approach towards it.
Transparency is key if cryptocurrency is to be widely adopted. By using a cryptocurrency that taps into the telecommunications industry, a telecom cryptocurrency will have access to a robust KYC framework. The existing blockchain technology that telecom cryptocurrency is built on — which allows the distribution but not duplication of data — adds an additional layer of security to the digital currency.
Cryptocurrency firms will have to pay close attention to regulatory considerations and industry developments, as well as continue to do their best to offer a high level of transparency to regulators.
All forms of investments carry risks, including the risk of losing all of the invested amount. Such activities may not be suitable for everyone.