Blockchain To Innovate Remittances In Southeast Asia, Says Velo
Blockchain has been said to be the solution for a great number of things in business, especially in providing transparency and efficiency.
The Thai-based remittance service Velo shared its idea on how cross-border remittance can improve greatly with the use of blockchain, Fortune reported.
Velo wants to introduce this efficiency to the Thai market. The International Fund for Agricultural Development said that the region enjoyed $65 billion in remittances from overseas migrant workers sending home to their families, among others.
An additional $18 billion worth of annual transfers, possibly from online transactions, are happening as well.
Chatchaval Jiaravanon, the company chairman, said that their idea catered to migrant workers looking for a "convenient remittance payment solution."
Most remittance services charge a fee for sending, and these workers need to have a service that does not take from their daily wages. Velo was created for that purpose, according to Jiaravanon.
Velo isn't the only blockchain-based remittance service operating in the region. There's Ripple, the US-based company with the same business. Alibaba's AliPay is operating in the region, as well as Calibra, Facebook's recently launched money service.
Bitcoin and blockchain is the future and New Zealand recognizes it. Pymnts reported that the country just became the first to allow wages to be paid in cryptocurrencies, excluding any self-employed worker from earning income in digital currencies. Companies paying in crypto will also pay tax in a "pay-as-you-earn" tax scheme.
The move, according to Mackrell Turner Garrett solicitor Thomas Hulme, was another step toward making governments realize that digital currencies are fast becoming an option as a currency. Hulme added that this demand is also proof that some people want their earnings to be paid in cryptocurrency.
That will have to be discussed legally, though, as the US Securities and Exchange Commission (SEC) has delayed its decision on approving bitcoin exchange-traded funds. This is for the Bitwise Bitcoin ETF Trust and the VanEck SolidX Bitcoin Trust, which had been repeatedly put on hold by the trading commission. The last hearing was scheduled in May, where the agency delayed making a decision to accommodate "additional comments."
As for Velo, it has only raised $50 million in funding for the company. It is counting on its partnership with CP Group to create trust with potential business partners as well as customers. CP Group is Thailand's largest private company, with 200 global subsidiaries as well as about $54 billion in annual revenue.
The company's executives see $50 billion worth of transactions annually passing through their remittance agents. Velo expects that most of these will be in bitcoin or done through digital means.