One of the main global problems blockchain and cryptocurrencies can solve is helping provide financial services to the large unbanked and financially excluded populations of the developing world, says Paul Mathieson from Investment Evolution.
How has blockchain and crypto revolutionised global payments?
The Bitcoin whitepaper was released in 2008 with a vision that the peer-to-peer electronic cash system presented a solution to the problem of costly and inefficient global payments via the introduction of blockchain technology.
Blockchain is a distributed electronic ledger that keeps a verifiable and unalterable record of transactions, removing the need for trusted third parties such as banks and intermediary institutions. By making a financial transaction for goods or commodities with a cryptocurrency, that transaction, and the record of what was purchased, is permanently and visibly stored on the blockchain, providing honesty, integrity and validity.
In recent years, Bitcoin has become more of a store of value asset than its original intended use of peer-to-peer digital cash, and newer alternative blockchains such as the Stellar network have continued to gain popularity for global payments and transfers.
Global payments are highly fragmented and inefficient as they are based on independent, unconnected legacy systems such as ACH, SEPA and SWIFT which all have outdated technology that makes sending money slow and expensive. These problems are particularly evident for the developing world with smaller payments and transfers being difficult to send to places without banking networks and overly expensive with fees sometimes being higher than the transfer amount, making the payment not even worth sending.
While blockchain technology and cryptocurrencies will revolutionise global payments over time, there is still a long way to go. One of the main hinderances to cryptocurrencies is their adoption and usage among the general population, a lot of which is due to the fact crypto is still confusing and hard to use for the average person.
How has Investment Evolution – and its products and services – been set up and structured to cater for this revolution?
Investment Evolution, our cryptocurrency token Investment Evolution Coin (IEC) and our main operating business for international payments and transfers, Investment Evolution Transfer (IE Transfer), have been set up and structured to address that main challenge of adoption and actual usage of cryptocurrency. To achieve this, we have focused first on the specific niche market of Filipino overseas foreign workers sending money back to family in the Philippines.
Investment Evolution plans to make it extremely easy for our customers to send money by building a user-friendly web application that converts fiat into IEC on the backend to facilitate a fast and free transfer with the user only needing to sign up for an account, complete KYC once and then be able to send money to the Philippines in a few clicks on an ongoing basis.
We also plan to establish relationships with retailers, payment networks, service providers and other groups in the Philippines to enable payments using IEC to avoid the need for converting transfers received into PHP fiat currency. By using technology and partnerships, Investment Evolution intends to make sending money to the Philippines via IEC easier than the current process of sending fiat as well as removing fees and other charges.
One of your unique selling points is having your own cryptocurrency. What advantages does this give you?
We created our own cryptocurrency Investment Evolution Coin (IEC) because it gives us the ability to provide our international payments and transfers for free and virtually instantly which we will do for our customers for payments and transfers of all sizes. By creating our cryptocurrency IEC as a token on the Stellar network, there is only a very minor transaction fee equivalent to a fraction of a cent for each transfer. Investment Evolution will absorb this small cost and therefore realize our vision of providing completely free and extremely fast international transfers to customers.
Malta is increasingly becoming a natural choice among companies within the blockchain and crypto sphere and this is due to the legal certainty the country provides
What other differentiation advantages does Investment Evolution have over competitors?
Our main differentiation advantage from competitors is offering our international transfers and payments for free and virtually instantly, rather than taking transaction fees or charging large spreads on exchange rates like banks and existing remittance companies do.
Another key differentiation advantage is that we will be offering customers unsecured online personal loans, which is the expertise of Investment Evolution group management for the last 14 years in both the US and Australia. Many of our customers in the Philippines are unbanked or underbanked so by providing them with both access to free transfers and access to credit we are filling a large gap in the market.
We normally associate global payments with international finance and business. However, there is also the social side – people working abroad and maintaining their families back home. How does Investment Evolution cater for such social needs?
One of the main global problems blockchain and cryptocurrencies can solve is helping provide financial services to the large unbanked and financially excluded populations of the developing world.
Investment Evolution caters to these needs by providing transfers and payment services to these customers at no cost, and also providing them with consumer loans and in many cases access to credit for the first time. We are also closely engaged with the Filipino community including sponsorships of local teams and events.
Is there a particular population for which you cater?
Our initial target population is the $30 billion USD per annum Philippines remittance market which is 10 per cent of the Philippines GDP. Philippines has a 104 million population and is southeast Asia’s largest exporter of migrant workers. There are more than 12 million overseas Filipino workers (OFWs) today in approximately 100 countries. Today more than 50 per cent of OFWs live in Europe and Middle East countries. Filipinos are a large, young and digitally savvy population with approximately 61 per cent of adults already using smartphones.
You have chosen Malta as the location for your new global head office. What informed your decision?
Malta has been praised for its commitment towards building and supporting the crypto ecosystem. Acting as a global trailblazer within the industry, it is proving itself to be the jurisdiction of choice and quality for various fintech companies wishing to make their way into the cryptocurrency world. Recognising the capabilities these technologies offer, various blockchain-related incentives have been proposed by government entities. It is envisaged that in terms of popularity, the use of blockchain technology will soon explode, equivalent to what the internet did in the 1990s when web browsers were introduced.
By investing in such initiatives, Malta will be a pioneer within the industry. On November 1, three legislations came into effect: called the Malta Digital Innovation Authority (MDIA) Act, Virtual Financial Assets Act, and Innovative Technology Arrangements and Services (ITAS) Act. Since the enactment of the three Bills into law, Malta is increasingly becoming a natural choice among companies within the blockchain and crypto sphere and this is due to the legal certainty Malta provides to the new emergent industry.
What are your plans for further expansion in Malta and abroad?
We are currently focusing on Filipino OFWs sending money back to the Philippines, and initially the specific payment corridors of Europe to the Philippines. Our next expansion will be to focus our technology development, marketing and partnership efforts on other major payment corridors such as Asia to the Philippines and Middle East to the Philippines where there are also significant numbers of Filipino OFWs working and sending money back home to their families. Our cryptocurrency, IEC and developed technology such as our customer facing web application can also work for any country and any geographical area so we also have plans to expand our fast and free transfers and personal loans to other developing countries with large unbanked populations throughout Asia, India and Africa in the future.
We are currently seeking additional pre-IPO equity capital and plan to list Investment Evolution shares on a European stock exchange before the end of 2019.
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