Japanese Banking Giant SBI Group Opens Blockchain-Based Payment Gateway to Africa

  • Banking group’s money transfer division leverages bitcoin blockchain to enable nearly half a million users send money to Africa in partnership with BitPesa.
  • SBI has extensive prior record of engaging blockchain technology to explore cross-border money transfer possibilities

SBI Remit, the money transfer division of Japanese financial services company SBI Group is partnering with BitPesa to turn the bitcoin blockchain into an enterprise rail that permits its half a million users to send money cheaply and quickly to Africa.

Previously money transfers from Japan to Africa depended on a complex web of banks and middlemen moving yen into U.S. dollars or euros, and then into the relevant African currency of the recipient - with over 40 currencies presently in use across the continent. Using

Through BitPesa’s framework, which uses the bitcoin blockchain in conjunction with other services to create new high-speed trading pairs, SBI Remit will be able to offer relatively fast transfers at much reduced rates than previously obtainable.

BitPesa’s Revolutionary African Remittance Technology

Where prior money transfer protocols required wait times of anything from 24 hours to seven days, BitPesa’s bitcoin rail framework enables remittances to be settled in as little as one hour. According to SBI Remit director Nobuo Ando, BitPesa’s possession of multiple international licenses will substantially aid African commerce and trade with Japan by adding an important layer of accountability and transparency.

Commenting on the existing situation of remittances to Africa, he said:

Many companies are doing trade with African countries and they are suffering from the high cost and the slow speed and not very precise administration. So this is the market that we would like to go in, together with Bitpesa.

By utilising BitPesa’s bitcoin-based treasury tools, SBI hopes to key into a lucrative seam of Japan-Africa trade which includes cosmetics, electronics and used cars. The partnership will for the first time provide direct currency pairs between the yen and the national currencies of Nigeria, Ghana, Morocco, Kenya, Senegal, Tanzania, Uganda and the DRC.

Previously, the cost of remittances averaged about 7 percent of the transaction value, but often added up to much more, with long wait times and unreliable service. After removing middlemen from the process using BitPesa’s tools, this comes down to about 3 percent of the transaction value, with the added bonus of being immutable, reliable and relatively fast.

SBI’s Blockchain Technology Quest

While SBI may be a first-time bitcoin user under this partnership, the company has a well-documented interest in using blockchains and cryptocurrencies to aid cross-border payments.

In 2016, the company partnered with XRP founding company Ripple to form SBI Ripple Asia, a payments-focused organisation helping banks in Asia to execute real-time cross-border transactions at relatively low costs. Earlier this year, it launched a 50 billion yen fund to support blockchain development and artificial intelligence startups over the next ten years.

Forbes reports that SBI Group has investment positions in 20 digital assets companies including bitFlyer, Templum, R3, coolBitX, Veem and its native crypto exchange SBI Virtual Currencies.

Neutral Dollar Stablecoin Founder Explains How to Access Shared Liquidity Pools

Matthew Branton, the Founder and Chief Technology Officer at Neutral, a smart contract-enabled platform that provides various financial instruments for the cryptocurrency industry, has predicted that stablecoins will have “a tremendous impact on the future economy.”

Branton, a computer science graduate from Lafayette College, told CryptoGlobe that stablecoins offer “access to a digital currency that can enable payments, credit, and banking services which many people don't have access to.”

According to Branton:

[Stablecoins are] innovative digital assets [that] will help lower the barriers for [major financial] applications and [they will also] help people transact in value [systems] they are familiar with, such as the USD [and other fiat currencies.]

“Cultivating Healthy Dialogue to Help Build Wider Understanding” of Stablecoin Market

In response to a question about how the traditional financial system could be upgraded (in terms of both the regulatory framework and technological infrastructure) so that it can allow users to legally acquire stablecoins and other digital assets, Branton remarked:

In order to ensure that regulation evolves in tandem with advances in financial technology (FinTech), dialogue between regulators and innovators is essential. Cultivating a healthy dialogue among fintech project [developers], stakeholders and regulators of traditional finance will help build wider understanding of the benefits of stablecoins, and in turn accelerate the creation of regulation and infrastructure that accommodates stablecoins in the global economy.

Neutral Dollar Aims to Provide “Diversified Exposure” to Investors at “Lower Risk”

When asked what unique value proposition the Neutral Dollar stablecoin offers, which may not currently be available in the cryptoasset market, and how this is supposed to be relevant and useful, Branton said:

The Neutral dollar provides diversified exposure, presenting a lower risk alternative against other stablecoins (which contrary to their name, may not exhibit stability) in the market. In addition, the Neutral Dollar functions in a way that creates an additional layer that allows for shared liquidity amongst constituents stablecoins, a property that isn't inherent in their design. Given the fragmented and nascent nature of the crypto market structure right now, this solution is particularly relevant and unique in the marketplace.

Responding to a question about the potential impact he expects his company’s line of products to have on the cryptoasset market, Branton stated:

The impact of our products is to not only give end-users a better means to invest, trade, or hedge cryptoassets, but to also facilitate liquidity and engage in better portfolio management practices through our products. In order for the digital asset space to reach its full potential, the industry needs reliable financial instruments that take us beyond the limitations of fiat currencies, while also upholding the highest standards in stability and transparency. In the longer term, we plan to explore the launch of a suite of financial products to improve market infrastructure and activity.

Digital Asset Security Is “Quite Solid”

Commenting on how we can ensure the security of our assets, including stablecoins users might acquire, since the technology used to transact in these assets is highly technical, Branton noted:

Given that collateral is on-chain and smart contract based, security is decentralized in nature and quite solid. Asset safety is still the responsibility of the end-user — crypto-storage extends beyond the case of stablecoins and Neutral Dollar itself.

He added: “Ultimately, once a Neutral Dollar token is deployed on smart contract networks, it will function completely autonomously. The math and algorithms that govern its operation will operate independently of a centralized entity and in a transparent manner, and provide continuous services on the network.”