If you are reading this, it means we have cleared our first objective: getting your attention. The Telcoin team decided to write this post to give a simple and straightforward introduction to our new cryptocurrency, what led us to create it, and how we plan to bring it to users around the globe. We hope the following information will get you more familiar with Telcoin and encourage you to join us on this exciting endeavor!
Telcoin: a simple definition
Telcoin is a new cryptocurrency based on the Ethereum blockchain that will be distributed by your national telecom operator and made available to everyone, anytime, anywhere. This is the core of our business, and mobile network operators will be at the center of our strategy.
Why Telcoin?
One of the primary observations that led our team to envision Telcoin is the widespread disparity between access to financial services and access to telecom services. According to the World Bank, 2 billion people are unbanked — meaning that more than 35 percent of the global adult population still doesn’t have access to basic financial services. That figure includes nearly half of the developing world, a neglected segment that we hope empower.
Fortunately, a much larger portion of the global adult population has access to telecom services. Nearly 5 billion adults — almost the entire global adult population — have a mobile phone.
Safaricom in Kenya provides the classic mobile money success story. In Kenya, 90 percent of the adult population has a “bank account” according the the World Bank — nearly the level of high-income OECD economies. How did they do it? Regulations in Kenya have allowed telecom mobile money to flourish, and while only a small minority of Kenyans have traditional bank accounts, they almost all have mobile money accounts. The majority of Kenyans would be considered underbanked, as the usability of mobile money is still somewhat restricted. But as the Kenya example has illustrated, regulators have played a major role in holding back financial inclusion.
Here is where Telcoin enters the picture.
The Case for Telcoin
The borderless nature of cryptocurrencies is now placing increasing pressure on regulators. Monetary policy remains a national security priority, and banks a powerful lobby, but a wave of interest in the future of cryptocurrencies is turning the tide. Around the world, governments are starting to accept cryptocurrencies, as the need to regulate them as a taxable asset is rapidly outweighing any threat to monetary policy.
We believe that once a telecom has regulatory approval to provide mobile money, and once the government has approved cryptocurrency as a regulated taxable asset, there will be minimal regulatory barriers to a telecom establishing exchange capability with Telcoin.
In this environment of increasingly friendly regulation and growing excitement around cryptocurrencies, we feel very confident in our ability to get a sizable number of telecoms to agree to proof of concept partnerships.
Why Partner with Telecoms?
By partnering with mobile operators, Telcoin can avoid key points of friction that have prevented similar projects from succeeding: trust, reach, and KYC compliance.
- Trust. Cryptocurrencies suffer a major trust issue. The instantaneous nature of transactions is a double-edged sword, and Bitcoin has been featured in numerous stories recently of hackers stealing cryptocurrency. We are not trying to replace Bitcoin. In fact, we expect to drive greater adoption of Bitcoin, as many early Telcoin users will likely use it to buy Bitcoin. We are offering to leverage telecoms’ existing trust level with customers to provide an easy bridge between mobile money and cryptocurrency. Default security for subscribers who convert mobile money to Telcoin will involve a multi-signature wallet, preventing large Telcoin movements without two of the three wallet keys. Telcoin will also work with the telecoms to utilize all available best practice security measures in order to protect subscribers. Furthermore, by focusing on compliance efforts with telecoms, we don’t expect Telcoin to attract criminal elements. We intend to diligently maintain a clean image for Telcoin as a brand that can be trusted.
- Reach. Five billion people have mobile phones. Reaching potential users can be difficult and costly for any new business. Telcoin will create a symbiotic relationship with telecoms in order to capitalize on their vast reach. By incentivizing mobile operators to partner with us, we will gain immediate access to their existing subscriber base. We also feel that Telcoin will drive further adoption of mobile money by adding practical use cases. Expanding mobile money adoption is a top priority of telecom CEOs in the developing world, as it has proven to generate a higher return on investment (ROI) compared to allocations for network infrastructure. Telecoms’ global reach and their potential to spread digital financial services is still largely untapped. As several cases in Africa have illustrated, once regulatory barriers are removed, mobile phone users will rapidly adopt mobile financial services. We believe that now is the perfect time for Telcoin to enter this market. As regulation on both mobile financial services and cryptocurrencies begin to loosen, Telcoin will undoubtedly benefit from the reach of mobile operators.
- KYC Compliance. Most exchanges now require a traditional bank account and a cumbersome “know your customer” (KYC) authorization before allowing the purchase of any cryptocurrency. This is a major drawback for companies working on the blockchain trying to address financial inclusion in developing countries. By going with a telecom-distributed cryptocurrency, a certain amount of KYC compliance is already in place. Telecom KYC is admittedly thin in most markets, but it’s a start. Telecoms also have a significant technical advantage to be able to actually know their customer — based on call detail records (CDRs), location-based services (LBS), and other network elements that are already commonly leveraged by fraud management platforms. A bank relies on the customer’s word on a KYC form — the telecom operator, on the other hand, has real evidence regarding the customer’s usage patterns. So it could be argued that a mobile operator’s ability to perform effective KYC is actually far greater than a traditional bank’s ability to do so. Telcoin will leverage existing telecoms KYC in place for mobile money access and work with the telecoms to meet standards required for cryptocurrency.
By partnering with telecoms, Telcoin will be able to solve basic trust, marketing, and compliance challenges that have inhibited cryptocurrency adoption to date.
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.
How will we make Telcoin happen?
We will issue a total of 100 billion Telcoin (see our whitepaper for additional information), a denomination that will be usable in the developing world. Half of supply will be kept for our telecom partners, issued to them over a 10 year period. Our business model will be very simple: we will initially offer Telcoin to our telecom partners as a part of their mobile money ecosystem, enabling easy cheap remittances and improving access to the global digital economy. Doing so, we want to build a win-win relationship with our telecom partners who will benefit from Telcoin as a market differentiator and contributor to increased mobile money adoption. We will simply take a 0.5 percent transaction fee for all exchange between Telcoin and mobile money.
We plan to support the growth of Telcoin in a number of ways:
- Incentivize telecoms to accept and promote Telcoin. We will implement an issuance incentive model whereby mobile networks who allow exchange with Telcoin will receive newly issued Telcoin. Networks with larger amount of Telcoin exchange volume will receive larger issuances. Networks will also be incentivized with greater issuance to perform stronger KYC, including anti-money laundering, counter financing of terrorism, and fraud management — all efforts that will improve the integrity and image of Telcoin.
- Legal and regulatory support. We will have a team dedicated to working with telecoms and regulators in each country to press forward the case for allowing exchange with Telcoin. We feel that once telecoms have been allowed to offer mobile money, and once cryptocurrency has been accepted as a taxable asset in the country, telecoms will be permitted to allow exchange with Telcoin. Our legal team will work with telecoms to reach this state and establish the terms and conditions necessary to allow Telcoin to flourish while also protecting the interests of consumers, telecoms and governments.
- Product and technical support. A seamless end-to-end experience for users buying and using Telcoin, particularly for our early focus on remittances, is critical to Telcoin success. Telecoms have enormous reach — mobile money is available in two thirds of the developing world, where the majority of remittance recipients reside. But even with this reach, mobile money was currently involved in less than one percent of global remittances. We believe that Telcoin can help here, but users will require a seamless experience. We will have a dedicated product team focused on the end-to-end experience for subscribers on our partner networks. This will include bringing best-in-class wallet options to work with both Telcoin and mobile money, working to help improve any existing mobile money wallets, and introducing a great Telcoin wallet as well. We will also have a technical team focused on maximizing ways for integrating with partner operators, including mobile money API integration, prepaid and postpaid billing platform integrations, and deploying and integrating with telecom systems supporting Telcoin compliance.
- Marketing support. We will have a dedicated team to ensure Telcoin is marketed effectively in each partner telecom market. Marketing efforts will focus on leveraging the reach of telecoms in a way that supports both Telcoin and mobile money adoption. We will have turnkey marketing assets for mobile operators and we will also help them with Telcoin marketing campaigns by providing customer targeting support. We will also engage in global marketing efforts to develop the Telcoin brand, and we expect these global efforts to benefit our telecom partners locally.
We hope this has served as a clear introduction to Telcoin! We also encourage you to check our whitepaper for more details about Telcoin and the team behind it. If you have any further questions or just want to get in touch with us, please don’t hesitate to email us at hello@telco.in or stop by our office in Tokyo.
Telcoin Website: telco.in
Sources:
- The World Bank. Measuring Financial Inclusion Around the World. http://documents.worldbank.org/external/default/WDSContentServer/WDSP/IB/2015/04/15/090224b082dca3aa/1_0/Rendered/PDF/The0Global0Fin0ion0around0the0world.pdf
- GSM Association. State of the Industry Report on Mobile Money (Decade Edition: 2006 - 2016). https://www.gsma.com/mobilefordevelopment/wp-content/uploads/2017/03/GSMA_State-of-the-Industry-Report-on-Mobile-Money_2016.pdf
