Dear Telcoin Community,
In September, we were excited to receive notice from the Nebraska Department of Banking and Finance that our application to create Telcoin Bank, a Digital Asset Bank, was deemed complete. This marked a major milestone for our company and the entire blockchain industry, and had been in the works since we had the exciting opportunity to work with Congressman (then State Senator) Mike Flood on drafting the Nebraska Financial Innovation Act back in 2021. Telcoin is proud to be the first company to get to this point, and is now on the verge of becoming the first true crypto bank in the US, and the first regulated bank issuer of stablecoins, what we’re calling “Digital Cash,” in the world.
Digital Cash will become the backbone for future Telcoin Remittances, and aims to disrupt the US$160B stablecoin market, ultimately making crypto more usable by being mainlined into the global banking system. Telcoin Bank will also be able to offer a suite of innovative blockchain banking products as well as facilitate direct merchant payments. Notably, Telcoin Bank will become the first bank explicitly authorized to connect customers to DeFi and offer crypto staking services, bringing the world of DeFi into a legitimate regulated space.
The next step for Telcoin Bank is a December 5th public hearing, after which we hope to officially have the charter in early February. We are very excited to finally be at this stage, and appreciate everyone’s patience, trust, and continued support as always.
- Paul Neuner, Telcoin CEO
Telcoin at Flyover Fintech
After receiving notice that Telcoin Bank’s application had moved to the next step, we were thrilled to join the Department of Banking at Flyover Fintech in Lincoln, Nebraska. The event, hosted by Congressman Mike Flood, was also attended by Congressman Patrick McHenry, the Chairman of the Financial Services Committee, and Andy Barr, the Chairman of the Subcommittee on Financial Institutions and Monetary Policy (which oversees the Federal Reserve, FDIC and OCC). Paul participated in a panel discussion and spoke about, among many things, our company’s ambitions to become the first bank-issuer of stablecoins and what that means for the future of payments and “crypto banking” in the United States. You can watch Paul’s full panel presentation on our YouTube channel.
In addition to Paul’s panel, an ETF panel containing representatives from four major Bitcoin ETF providers (Blackrock, Grayscale, Fidelity, and Bitwise) revealed that three of them are using the same custodian — centralized crypto exchange Coinbase. That discussion made clear that a digital bank custodian, regulated by the Nebraska Department of Banking and Finance, would be a welcome addition to the market.
Telcoin Fundraise Launch
As mentioned in our last community update, we opened our pre-series A fundraise earlier this year to existing investor commitments needed for the Telcoin Bank application. We were able to quickly meet our needed commitment level to proceed with the application, and appreciate everyone’s support. As we now approach our December 5th public hearing, and expected charter approval during Q1 of 2025, we now feel the timing is right to officially open the round to new investors. We have also increased our maximum raise to US$50M, and plan to launch Telcoin Bank with US$22.6M initial capital as agreed with regulators.
Once again, if you’re a fund manager or accredited investor interested in joining us as we revolutionize mobile financial service, digital banking, and the technology of money, please fill out this form to express your interest and we’ll follow up with relevant documentation for those deemed eligible. Please note that interested US citizens must be accredited investors.
Building the Internet of Money with Digital Cash
With the dawn of the Internet, Milton Friedman predicted e-cash and the Internet of money, and we feel this is finally arriving. From V4 we will start to introduce Digital Cash (eXYZ) with a focus on providing as many people in the world as possible native 1:1 digital cash rails with banks, eWallets, and cash points globally. But ultimately we expect merchant payments to largely migrate to direct transfer of digital cash — the digital equivalent of handing a 20 dollar bill to a merchant. Telcoin Bank in the US is a foundational piece of the puzzle, but we aren’t holding back globally.
It has been a long time since our last Telcoin Wallet update, and we’ve spent that time laying the groundwork for our V4, which is now in testing. V4 supports Digital Cash and also allows non-app users to receive and use Digital Cash remittances. So we are excited to soon unleash a backlog of features, including Digital Cash and improved rails. One challenge with being more than just a wallet, and seeking global licensing, has been more app store scrutiny, which has required us to employ a fleet of global law firms to perform a country-by-country legal analysis for app stores. This also prevented us from updating our app recently, but we are now finally over that hurdle.
Note that as part of this evolution into V4, and as Telcoin seeks additional licenses and registrations around the globe on our mission to become the most compliant and trusted blockchain company in the world, we’ve had to make some changes to the global app availability, impacting a very small portion of our current user base. We will follow up shortly on the specifics, but generally consider any app store removals to be temporary while we complete local registration or obtain local legal opinions in those jurisdictions.
Telcoin Association Update: Telcoin Network Progress Report
An important part of our overall vision is the Telcoin Association’s Telcoin Network, an EVM-compatible blockchain network that global mobile telecom networks have the exclusive right to validate, thereby earning a unique new revenue stream that we believe one day will be a network service akin to switching calls and data packets. The Telcoin (TEL) token will be the native gas token of the Telcoin Network, which we hope will power the settlement of the majority of Digital Cash payments globally in the future.
The Telcoin Association’s commitment to building a secure, efficient, and inclusive financial ecosystem remains stronger than ever. Here are the latest developments and strategic directions for Telcoin Network from the First Platform and Treasury Council Meeting.
Comprehensive Security Measures and Audits
We have initiated a thorough selection process for auditors, focusing on identifying vulnerabilities through rigorous penetration testing. This testing is crucial as it ensures that attackers cannot access validator keys or hijack the consensus process. Although we maintain strong social governance, making a secondary audit on protocol consensus among validators a lower concern, we are proactive in addressing these aspects comprehensively.
Innovations in Protocol Safety and Liveness
The protocol’s architecture is better streamlined into modules focused on safety, such as voting and commit rules and liveness. This modular approach not only enhances security and simplifies integration but also allows for independent and parallel development on different modules. By integrating execution directly within the consensus flow, we can avoid forking issues common in leader-based protocols, streamlining network operations and enhancing protocol integrity at scale.
Dynamic Validator Sets and Network Security
A major advancement has been the specification of TNIP-2, which introduces dynamic validator sets. The proposal outlines how the protocol should implement dynamic validator sets to secure the blockchain. Rotating committees ensure that new nodes can join and participate in the network dynamically and fairly, which enhances the network’s overall security, decentralization, and resilience. The on-chain staking contract and consensus registry is designed and fully implemented. Wallets must obtain an NFT from the association in order to stake.
State Syncing Strategy
Nodes that are already part of the committee are able to sync before consensus rounds are garbage collected. This is an effective solution if nodes restart within a limited amount of time. However, a more robust syncing strategy is needed for nodes that are joining a network that has advanced for some amount of time (more than 32 rounds). Once this is fully implemented, anyone will be able to run a node and sync state with Telcoin Network.
Simplified User Client Design for Validators and Bridging
Instead of designing and building a separate light client protocol, the core protocol team believes repurposing a validator node client for bridging is the most effective short-term solution considering time, security, and engineering efforts. Observation clients are already required for new validators to join the network, so this allows us to solve two problems (bridging and new validators) with one solution.
Engagement with Mobile Network Operators (MNOs)
We are excited to report strong interest from some MNOs to join the network. These partnerships are in the design phase and are pivotal in demonstrating the practical applications and benefits of Telcoin Network in real-world settings.
Looking Ahead: Engaging the Councils and Community
As we proceed, we believe that engaging with the councils to determine the best approach for external audits and pilot programs with MNOs will be crucial. We value the community’s input and invite all stakeholders to join this discussion to help shape our strategy moving forward.
Our team is confident in the network’s current capabilities — fast, secure, and Byzantine Fault Tolerant. The focus now shifts to expanding the network to allow for dynamic participation by new nodes, ensuring that Telcoin Network remains at the forefront of blockchain innovation.
Thank you for your continued support and enthusiasm. Your engagement is essential as we move closer to realizing our vision of a decentralized financial future.
Other Events Recap
In addition to Paul’s big panel at Flyover Fintech in Nebraska, Chief Commercial Officer Rajesh Sabari was a speaker at the Allinial Forum in October. He also joined Singapore Fintech Festival in early November, one of the largest fintech industry events globally, where he attended a number of invite-only receptions and workshops including the GFTN Reception and Insights Forum for policymakers, regulators, and industry leaders.
EVP Jeff Quigley attended the annual Tech in Asia Jakarta conference in Indonesia in late October, which is among the largest gatherings of startups, tech media, and venture capital investors in the Southeast Asia region.
Telcoin was also slated to sponsor and present at the Inclusive Fintech Forum (hosted by the Monetary Authority of Singapore) and Mobile World Congress Africa, both in Rwanda, but unfortunately both events were postponed due to public health concerns. We’re looking forward to joining both of those once rescheduled and hitting the ground once again in Kigali.
New Telcoin Team Members
Richard Kay is Head of Compliance, International, at Telcoin. Richard has worked in the Financial Services Sector in the UK and across Europe. He has over 10 years experience working in FCA regulated businesses, including being Head of Compliance for the Wealth Department at Revolut. Richard also spent 3 years running the Compliance Team at Exmo Exchange, as part of his role, he worked with Crypto UK, helping to champion the growth and success of the Digital Asset Sector. Richard is a Chartered Fellow of the Chartered Institute for Securities & Investment (CISI).
Zachary Fontes joins Telcoin as Assistant Compliance Officer in the United States. He has been focused on working with the compliance team on all matters involving the cryptocurrency regulatory landscape. He previously worked within the Financial Intelligence Unit for the Private Bank division of Citigroup. Prior to Citigroup, he spent several years in law enforcement. He holds numerous professional certifications such as Certified Anti-Money Laundering Specialist and Certified Financial Crime Specialist. His experience will supplement the team in implementing its compliance program and staying on top of regulatory requirements.
Steven Stanfield joins Telcoin as a Rust Protocol Engineer based in the United States. He has over 30 years experience architecting and building innovative products and services for a variety of organizations. He has had the opportunity to work on DARPA projects, embedded devices, mobile apps, and security products. He has been working on blockchain development in Rust for the past three years and is currently part of the core team building Telcoin Network. Steven holds a bachelor’s degree in Computer Science from the University of North Florida.
Important Disclosures
The terms of the Telcoin’s Terms of Service available on www.telco.in control as to the use of Telcoin’s products and services. Telcoin does not guarantee any result and past performance is not indicative of future returns. Telcoin does not provide any type of advice to you and you should consult your own advisers as to whether to use Telcoin products and services. Telcoin customers and their accounts are not insured by the FDIC or any other government or entity. The information in this communication is provided for informational purposes and without a warranty of any kind. Telcoin does not represent, endorse, or warrant the timeliness, sequence, accuracy, or reliability of any such information. Telcoin shall not have any liability for any purchase or sell decisions based upon this communication. Digital assets are extremely volatile and risky. The goods and services offered by Telcoin may not be suitable for all customers. Nothing herein should be construed as an offer to buy or sell securities or a solicitation of an offer to buy or sell securities. Any investment may only be done through a private placement memorandum. Telcoin goods and services may not be eligible for sale in some states or countries. This communication may contain links or references to third party documents and websites which Telcoin does not control and thus is not responsible for their content. The owners, employees and affiliates of Telcoin may also buy, sell, or hold long or short positions in Telcoin goods and services for their own accounts. ©Telcoin 2024. All rights reserved.
