Transmission, an Ethereum-based remittance infrastructure provider that is set to conduct an initial coin offering (ICO) campaign on August 29, is building a global remittance network using the smart contracts protocol of Ethereum.
The demand for efficient and transparent remittance systems in China, India and the Philippines, the three largest remittance markets in the world that receive hundreds of billions of dollars in remittances on a yearly basis, has been on the rise since early 2010. In the Philippines, local remittance networks such as Lhuiller have taken over banks by providing easier and cheaper methods of transferring money both domestically and internationally.
In fact, local remittance service providers in the three countries have grown to a point where multi-billion dollar technology companies including South Korea’s Kakao, the operator of KakaoTalk, the largest messaging app in the country with a staggering 90 percent market penetration rate, have started to invest in bitcoin technology companies to focus on improving the global remittance infrastructure.
Various venture capital-backed companies including Coins.ph, Rebit, and Satoshi Citadel have been trying to use the bitcoin blockchain to develop more efficient remittance platforms. But, not many companies have attempted to utilize the Ethereum blockchain to lessen the costs of remittances.
By definition, Ethereum is not a cryptocurrency unlike bitcoin. Its native token Ether (ETH) was designed to operate as gas or transaction fee to fuel the network’s decentralized applications. However, as the Ethereum network started to grow at an exponential rate and the daily trading volume of Ether skyrocketed to around $500 million, an increasing number of investors and traders, especially in China and South Korea, started to consider it as digital currency and a store of value.
Because Ethereum focuses on flexibility and functionality, its transaction fees are far lower than bitcoin. Hence, Ethereum infrastructure developers like Transmission can utilize Ether transactions to lower costs of global remittances.
In an interview with CCN, Transmission CEO Mike Gorden explained that the company’s development team has developed a system wherein remittance recipients from anywhere in the world can receive remittances in Ethereum with a fee of less than 1 percent. According to Gorden, the 1 percent fee includes the processing fee and exchange rate, which is far lower than the vast majority of remittance service providers in the market today.
“A specially tuned algorithm that uses the Blockchain solution helps us to adjust the liquidity to ensure the operation of the system and the processing of requests for transactions. The absence of costs for global banking transactions, low commissions for the purchase of currency required for work and crypto-currency on the exchange and optimized expenses for the company’s offices enable customers to offer an unprecedentedly low commission for transactions not exceeding 1%,” Gorden told CCN.
More importantly, as mentioned above, the Chinese, Philippine and South Korean remittance markets are hundred billion-dollar industries which bitcoin startups and service providers have struggled to take control of. Gorden further emphasized that the Transmission team aims to establish active userbases across those three regions.
“Yes this is our goal. The Asian region is a strategically important area for our technology. At this stage we are represented in the PRC, but in all these regions and their local fiat currencies we will work from the moment the network is launched, i.e. From the 2nd half of 2018. Of course, we expect to become the mainstream and the next generation payment tool in Asia,” he noted.
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