Because of the wild fluctuations seen in the marketplace — from Bitcoin and Ethereum to lesser-known altcoins — the value of a remittance can fall dramatically in a short space of time, meaning that the fiat converted to crypto for a remittance can be worth a lot less when it’s converted back to fiat at the other end.
A Japanese fintech company has unveiled a system that is designed to address the price volatility seen when cryptocurrencies are used for remittances.
Atom Solutions says that, at present, the options for foreign workers who need to make overseas remittances are imperfect. While costs can be high when they try to complete transactions through a traditional bank, an entirely different issue altogether comes to the fore when crypto is used.
This is why the firm has devised the Equivalent Value Overseas Remittance System, which is known as EVOR for short. Atom Solutions believes that this product has the potential to eliminate decades of shortcomings in this high-value industry.
As an example, let’s imagine that someone in Japan wants to send money to a loved one over in the Philippines. The company’s multicurrency wallet will enable the person making the payment to purchase crypto using Japanese yen before transferring it to the wallet of their relative in the Philippines. This then arrives in the local fiat currency — helping to drive costs down by alleviating the risks associated with foreign exchange.
The speed at which this transaction takes place is a crucial factor in ensuring that the value of a remittance is preserved, and Atom Solutions says another advantage is how EVOR offers “the lowest cost possible in the world” in terms of fees.
A suite of financial services
Atom Solutions says that it wants to offer a suite of financial services extending beyond remittances, all with a view of making crypto more practical for everyday use.
It has created a new digital asset known as Eternal Coin (XEC). In addition to playing an instrumental role in the remittances process, the platform also plans to enable its community to lend XEC to other users on a peer-to-peer basis. They would have the potential to earn interest on these loans by getting a share of the transaction fees paid by the borrower.
Overall, Atom Solutions says that its concept for remittances is something that has never been implemented in the world before. It hopes its products, combined with its multicurrency wallet and official exchange system, will help transform the industry for the better.
Remittances on the rise
Data from the World Bank surrounding remittances to low- and middle-income nations helps to paint a picture of why reform is needed. The independent group recently said that remittances hit a record high in 2017 — increasing by 8.5 percent to reach $466 billion over a 12-month period. When you include the money flowing to high-income countries, this figure soars further to $613 billion, an increase of 7 percent. When it comes to the areas where most remittances were sent, India, China, the Philippines, Mexico, Nigeria and Egypt topped the list.
Remittances have been growing further in 2018, the World Bank said, and given how these sums of money often serve as crucial lifelines for the recipients, Atom Solutions is hoping their concept will help them access more of this money without losing cash to exorbitant fees.
Atom Solutions is based in Tokyo, and the Equivalent Value Overseas Remittance System is scheduled to be launched at the beginning of March 2019. Users are now being invited to try the EVOR Simulator prior to the launch of its official service.
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