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A telecom cryptocurrency can tap into an unbanked economy of 2 billion people, Telcoin co-founder and CEO Claude Eguienta writes in a commentary for  finews.asia.

Cryptocurrency has seen increased demand and growth in Asia in November. Bitcoin topped $8,000 for the first time this month despite pricing volatility earlier this month and concerns around cryptocurrency risks.

Over the past few months, there has been increased interest in telecoms tapping into cryptocurrency to reach the unbanked using mobile phones, which has big implications for financial inclusion.

Increasingly, Asian high net worth individuals, venture capitalists and angel investors are investing in telecoms cryptocurrency compared to the over 9002 other cryptocurrencies globally given three key factors: trust, reach and know your customer, or KYC, compliance.

Snapshot

  • Cryptocurrency can unlock an unbanked economy of 2 billion people, leveraging blockchain technology. Through cryptocurrency, mobile subscribers and the unbanked in emerging and frontier markets such as Myanmar and India, respectively, can potentially adopt and use mobile money.
  • The remittances market is in need of modernisation and is ripe for disruption from a telecom cryptocurrency entrant. Today, telecoms are involved in less than 1 percent of global remittances worth $500 billion.
  • Given recent speculation on initial coin offerings, or ICOs, in Asia and globally, cryptocurrencies that are tied to telecommunications will likely stand out from the crowd given its robust KYC framework, and ensuring that transactions are transparent and traceable.
  • Recent use cases for telecom cryptocurrency reflects greater access to capital, sending and receiving remittances and inbound and outbound roaming payments, and international aid.

Cryptocurrency to Unlock Unbanked Economy of 2 billion People

Today, the unbanked economy is underserved and largely untapped with over 2 billion people have no access to banking services. In Southeast Asia, only 27 percent of population have a bank account in 2016, which means that there is 438 million unbanked.

Despite that massive unbanked economies, there are nearly 5 times as many mobile phones in the world – 5 billion – as there are active bank accounts, 1.2 billion. As it is a lot easier to access mobile phone services than banking services, telecom cryptocurrency can capitalize on this disparity and disrupt the current traditional banking and financial systems.

A recent Telcoin use case study showed that cryptocurrency can tap into the synergies between the reach of mobile telecoms and the fast, borderless nature of blockchain technology to unlock the unbanked economy.

Through its telecom providers, Telcoin provides their customers with access to the digital economy: online remittances, transfers, payments and e-commerce. At the same time, telecom providers will participate in the overall mobile money ecosystem and provide value added services to their user base.