Telcoin, the world’s first telecom-focused cryptocurrency, just joined GSMA
Blockchain technology holds great potential for various industries, including the telecoms sector. Telcoin, a new cryptocurrency company which recently became an official member of the GSMA, aims to bridge the gap that exists between telcos and blockchain technology. So, what’s the project all about? Shashank Venkat presents the details.
Telcoin is a new cryptocurrency that aims to leverage the widespread reach of mobile networks and combine that with the fast, secure and borderless nature of blockchain. The cryptocurrency, which recently concluded a successful Initial Coin Offering (ICO), initially wants to focus on the $500 billion remittance market, and then move to other areas such as roaming, e-commerce and banking the unbanked population across the globe. Telcoin recently announced that it has become an official member of the GSMA and this development will certainly bring more mainstream interest in the project.
The Telcoin token, built on the popular Ethereum platform, will be exclusively distributed by GSMA mobile network operators, who in turn, will sell it to their subscriber base. Telcoin will incentivise mobile network operators who decide to partner with the project. The company is also offering a Telcoin Exchange API to facilitate integration options and interaction with convergent charging systems and mobile money accounts. More details about partner incentives and technicalities can be found in the official Telcoin whitepaper.
Now, why did Telcoin decide to partner with mobile operators instead of some other entity? The answer lies within existing barriers to cryptocurrency adoption such as trust, reach and Know Your Customer (KYC) compliance. Telcoin thinks that it can overcome trust issues surrounding cryptocurrencies by leveraging the telecom industry’s existing trust level with customers and provide a safe way to enter the world of cryptocurrencies. The same trust issues have led to a lot of regulatory scrutiny which has made it difficult for many companies working on cryptocurrency projects. Moreover, there are cumbersome KYC procedures to be followed before customers can purchase cryptocurrencies. However, telecom operators have access to a lot of real-time customer data which leads to more trust among authorities. Combined with the unprecedented reach of mobile networks (approximately 5 billion mobile subscriptions across the globe), these advantages make telecom operators the perfect ally for Telcoin’s vision of financial inclusion.
And for telcos, this opens up newer growth opportunities amid dwindling revenues from core telecom services such as voice, messaging and data. Telcoin believes that it can contribute to the mobile financial services ecosystem and complement existing mobile payment platforms. The increased adoption for mobile money through this cryptocurrency opens up the chance to beef up mobile operator revenues and gives them a chance to enter the financial services industry.
Of course, the success of Telcoin will depend greatly on the nature of regulatory barriers that may inhibit telecoms companies from establishing exchange capabilities with cryptocurrencies and prevent adoption from mainstream telcos. Which way this goes is anybody’s guess, but we remain optimistic about blockchain opportunities for telecoms businesses.
In our analysis, we identified blockchain use cases within micro-payment business models and Telcoin seems to be working in this direction. While this blog post should not be misconstrued as an endorsement for Telcoin, we think that this cryptocurrency project has shown a new way for blockchain adoption within telcos. Many leading players such as T-Mobile are also reportedly working on blockchain initiatives, and we believe that blockchain will be a dominant theme in the upcoming Mobile World Congress in Barcelona.