REMIIT’s Product Market Fit and Trial & Error
The REMIIT team has been continuously working to provide faster and cheaper remittance services by solving the slow processing speed and high cost of the current SWIFT system by introducing the remittance service using the blockchain. In addition, we did not just conduct remittances through the blockchain, we wanted to share the profits generated from the platform with REMI Token Holders, and presented the blueprint through Meetup.
In order to realize the blueprint, the team thought it was a priority to create a product that could meet both market needs and government regulation. The overall remittance process model has been created, but the power to realize it is due to market needs and government regulations.
To find market needs and ways to meet them, the REMIIT team created an internal TFT to investigate both crypto investors, as well as consumers in the remittance market and Money Transfer Service Providers (MTOs) for about a month. As a result, many of the interviewers who actually invested in cryptocurrencies responded positively to the project direction as the needs of consumers of the remittance market were met, and the MTOs also felt the need for such services. As a next step, the REMIIT team endeavored to resolve realistic regulatory issues behind remittances. Unfortunately, in Korea, remittances using blockchain and cryptocurrencies are currently banned, and we have been able to identify the strong wall of reality with the alliance of commercial banks to solve this problem, however it was not easy due to the negative reaction of the intermediary banks.
Although this has been through trial and error, this process has allowed the team to be confident in the project direction in ways to penetrate into the market.
Now let me take you through what this team has been up to and how they will proceed forward.
Current Situation of the Remittance Industry and its Regulations
The number of overseas remittance companies, which was only four since the introduction of the overseas remittance system in August of 2017, has soared to 25 as of May 2019 where the volume remitted is US$815 Million with over 1.16 Million transactions. On the surface, the volume and quantity has definitely increased, however in reality, the businesses are concentrated on marketing and new user acquisition leading to a red ocean of minimal fees. The blockchain remittances that can overcome this bottleneck still remains as a hurdle due to regulations.
REMIIT interviewed partner MTOs in the Philippines, Nepal, Singapore and Japan, and found that there is definitely a need for service system infrastructure in addition to fee competition and attracting new customers, which is related to corridor expansion and a pull phenomenon during a fixed period of time for remittance users.
REMIIT is keeping an eye on these money transfer market conditions and needs, and will not limit itself to B2B service to MTOs, but will implement the remittance platform service integrating end users from the beginning.
However the path to these goals is rough as there are government regulations on cryptocurrencies and cross-border money transfers. South Korea is one of the most heavily regulated countries across the world. The Financial Services Commission, for example, stands to completely exclude blockchain-related companies from the current integrated API for fintech firms. If blockchain-related companies are excluded, fintech has no choice but to use banks, which means they are virtually stuck in the status quo, without innovations nor technological advancements. In addition, this situation is undesirable for not only service consumers and MTOs but also banks. The way in which the industry can develop is because of the innovation created in the competition. That’s why the REMIIT team has worked to find ways to foster competition and innovate while still following market regulations. As a result, we have filed a patent application for “Method and apparatus for recording transaction details separated by funding and remittance into a blockchain ledger”, and based on this, the sandbox procedure is in progress.
Derivatives Exchange
The reason the REMIIT team put DEX on the roadmap is to maximize the governance of the liquidity supply and token economy for stable coin. As a result of various studies and research to apply to real business cases, we concluded that it is premature to introduce a crypto-collateralized stable coin directly to real business as well as the lack of modeling for the Stable Coin than expected. To make up for this, the team decided to build an exchange to understand the behavior of similar token economies and launch a fiat pegged stable coin first. In order to test market trends and various token dynamics, we will prioritize trading of derivatives rather than spot trading. We plan to test and distribute our stable coin naturally in the process.
DEX Launch Date
The Derivatives Exchange is scheduled to be launched in 2020.Q1. Based on this, we plan to expand the operation in the fourth quarter of the same year as a hybrid type DEX exchange that partially applies blockchain technology.
Reason for Delay of REMIIT Wallet Delay Reason + Wallet Type/Usage
The wallet in the prototype is an interface for Linkers to directly sign the ledger technology. Basically, creating a wallet for the purpose of simply moving cryptocurrency is not a big deal at this time. The UX-centric wallet for lowering the entry barriers for the Linkers to use the blockchain on the prototype was planned, but it is more important to solve various problems regarding the business utilization of the prototype itself, thus research for the UX focused wallet is on hold. The current prototype is signed using Metamask, and later a more optimized wallet will be designed for the same purpose, and the wallet functionality will naturally be extended for various purposes.
KRWR (KRW Pegged Stable Coin)
In the REMIIT project whitepaper, the stable coin REMD, is the value of which is not maintained by fiat currency nor cryptocurrency, but stably maintained through the staking process between REMI and REMD. While this system is now more evolved than the price elasticity method (Sell when high, buy when low) of most stable coins, there are many technical and economic issues that need to be addressed. Therefore, we are going to introduce KRWR first, which will keep the value stable through a stable collateral before launching REMD.
KRWR is a stable coin issued with a marking in KRW converted value with collaterals of USDT, TUSD, USDC which are stable coins whose value is fixed in fiat currency. Somewhat complex, but there are several reasons why the REMIIT team chose this method.
First, it is possible to do activities free from government regulation through this method.
Second, this method follows the exchange of a USD denoted stable coin and a KRW denoted stable coin through externally determined exchange rates, however the essence of this mechanism resembles to the exchange and value maintenance through staking between REMI and REMD. Therefore, by developing this method, we can launch REMD to market with stability.
Finally, KRWR, which is a stable coin of KRW, is successful. We can apply this to launch the same stable coin in each country, which can contribute to revitalizing remittance through the platform.
Currently, the team is preparing the KRWR white paper for the third quarter of this year and plans to introduce the KRWR POC in the second quarter of next year.
To Conclude
REMIIT is a project with the purpose of developing and operating a platform to enhance credibility and help expand the scope of business for the Money Transfer Service Providers, who are doing business similar to the existing Bluepan service. As the Bluepan service has grown so much, remittances based on Cryptocurrencies and Blockchain have many advantages over the SWIFT networks used by existing financial institutions like cost, reliability and convenience.
REMIIT was designed as the Blockchain SWIFT Project, which connects remittance services via the blockchain. However, after the project’s announcement, the government’s ambiguous attitude toward blockchain remittances and the hardships of the existing banking system were obstacles to overcome. To overcome this hurdle, the REMIIT team has been seeking a number of different ways to transfer money together with banks and other cross-border money transfer institutions.
Through this process, the REMIIT team was able to conclude that entering as a participant in the fiat currency-only remittance service market is not meaningful for the project growth. As mentioned above, the time used to discover a growth driver also confirmed that it was a matter of time for implementation since we were convinced that the market had no option but to be formed.
REMIIT provides a solution to address issues such as ambiguity of ownership, nature of funding, etc., which governments and related institutions have pointed out as a problem in the method of remittance based on cryptocurrency, while at the same time prioritizing business development through these solutions. In addition, a Cryptocurrency exchange which will be used to research trade and test our Stable Coin which is an important factor to the REMIIT Platform is being developed.
REMIIT will continue by launching the Exchange and Stable Coin test in the first quarter of 2020 with the aim of establishing REMIIT system ver 1.0, which will become the predecessor of the remittance platform network by the end of the year, and B2B business launching by selling the remittance platform.
The ultimate goal of REMIIT is not just B2B, but the market where buyers can buy and sell a variety of remittance services, such as end-users purchasing goods through Amazon or eBay.
The REMIIT team does not cheat. Even if there are a lot of obstacles, we are always doing our best to find solutions. REMIIT will do our best to until the day when we will see the light of this world.
Thank You.
On Behalf of the REMIIT TEAM.
