The world economy is at the moment awash with Financial Technology advancements that have enabled cross-border transactions at the click of a button. To be globally competitive, most economies are speeding up legislations in order to regulate this growing sector while others have steer cleared off the cryptocurrency craze as another passing cloud.
Just last April, Pakistan issued bans on the use of cryptocurrency. This hard stance seems to have been abandoned as it has come out to support the Blockchain technology. On Tuesday, a subsidiary of Norwegian telecoms multinational Telenor Group – Telenor Microfinance Bank, has launched cross-border payments using blockchain technology from payments firm Alipay.
Pakistan’s first Blockchain powered Cross-border transfer service
The product, launched on Tuesday, is Pakistan’s first Blockchain based cross border transfer service. It was born out of a partnership between Telenor Group’s Malaysian Financial Technology Holding company – Valyou and Pakistan mobile bankers – Easypaisa. The partnership will see transactions conducted in real-time between the two nations at a safer, cheaper and more efficient channel powered by Blockchain.
Speaking on the product, the bank elucidated that Blockchain will “significantly boost the speed and efficiency” of payments. It added in a statement that the money transfers will be “highly secure and transparent.”
More efficient transactions
According to Roar Bjærum senior vice president at Telenor Financial Services, Pakistan currently only receives about $1 Billion in home remittances from Malaysia. Going forward, the Easypaisa and Valyou partnership is expected to change things for the better. In the 2017-18 financial year, Home remittances injected only 6% into Pakistan’s Gross Domestic Product (GDP).
According to the state Bank of Pakistan Governor – Tariq Bajwa, the 6% injected to the economy is equivalent to over 50% of the national trade deficit, 85% of all exports and over a third of all imports in that financial year.
One year Trial period
The partnership’s technical implementation will be handled by Alipay, a subsidiary of Alibaba Group and will be operated by Ant Financial who have since announced waiver of all transaction fees during the initial one-year trial. The aim is to eliminate intermediary costs since the product reduces transactional costs. CRYPTO IS COMING!