The idea is to make possible quick and low-cost remittances in a “peer to peer” way. This country has its own cryptocurrency
Ulaanbaatar, Mongolia’s capital, partnered with Terra, a stablecoin developer, to launch a service platform for instant money transfers that will use blockchain technology.
Terra will have the support and financing of the city government to try to simplify and secure the electronic payment process. Among other financial services that it will offer, it is trying to provide their users with the possibility of making quick and low-cost remittances and loans.
According to official information, in the medium term Terra plans to work together with the local government to replace the traditional method of current payment of utility bills and government subsidies through the use of its stablecoin.
“The P2P (per-to-per) facilitation and the recurring payments of public services with Terra are the first important steps towards building a financial infrastructure based on blockchain technology in Mongolia”, said Daniel Shin, Terra’s co-founder. He added that the intention is to offer at all times a wider range of financial services, “reforming the remittance industry, loans and banking in general”.
The pilot program will be launched in the next six months with two main characteristics: peer-to-peer (P2P) payments in order to allow instantaneous transfer between users of different banks, and mobile payments to build the infrastructure of secure payments, assured the company to expand the information.
It is planned to start in the Nalaikh, district of Ulaanbaatar city, and includes both payments in pairs and mobile payments.
The announcement was made by the blockchain company Terra, based in South Korea. The solution developed by the company will be launched in the Nalaikh district of the city through a pilot program, with plans to expand the idea throughout the city. In the future, this technology could reach other areas of the country.
Terra, known for the development of its own stablecoin, is a company co-founded by Daniel Shin, who created Ticket Monster, the e-commerce market in South Korea. The project of its stablecoin closed a round of financing of 32 million dollars in August 2018, with the participation of Binance Labs, OKEx and Huobi Capital, as well as Polychain Capital, among other important companies in the industry.
Last autumn, the Bank of Mongolia, the country’s largest bank, granted permission to the largest mobile telecommunications operator in Mongolia, Mobicom, to issue its own digital currency.
In order to make real its plan, Terra partnered with the South Korean messaging app giant Kakao Talk, in November last year, to develop a blockchain-based payment system that allows more people to use these services.
With its decision, Mongolia invites to the adoption of cryptocurrencies. Mobicom’s CEO Tatsuya Hamada is confident in the impact of digital currencies on the economy. “When digital currencies begin to circulate, ATMs and cards will become things of the past”.
According to the Central Bank, “the regulation defines who will use the digital currency system and how to obtain permit rights, duties of clients and service providers”. In fact, in this country already circulates a digital currency called Candy for the payment of goods and services.
By María Rodríguez