Issuing & Using Digital Credits

Velo Team
Velo Team
Dec 10, 2019 · 3 min read

When it comes to solving the problem of volatility while adhering to many of the core tenants of blockchain technology, Velo proposes a next generation financial protocol to aide in the issuance of stable digital credits.

What’s unique about Velo is that digital credits can be pegged to virtually any national currency such as the Thai Baht, the US Dollar or the Colombian Peso. In doing so, our digital credit system offers more flexibility than existing stablecoins which are largely pegged to the US Dollar.

How it works

First and foremost, digital credits are issued by using smart contracts, a blockchain-based script that only creates new credits when a sufficient amount of capital is deposited as collateral. In our system, this collateral is Velo tokens (VELO). Simply put, trusted parties request credits through a script, choosing what type of currency they would like their credits to be pegged to along with seeing how much VELO is required to fulfil the request. Trusted partners must have the required amount of VELO in their wallet to process a request at any given time.

Using our interface, trusted partners have the ability to set up a template to exchange tokens for digital credits. This is a 2-step process:

  1. Credit Setup — where the trusted partners define the digital credit name, wallet address, pegged value and pegged currency
  2. Mint Credit — where the trusted partners specify the amount of digital credit to mint, based on VELO collateral in the wallet
Note: This is just a demo, the actual process will be done on a much more user-friendly web portal

Here’s a more detailed look at what’s going on under the hood:

Digital Credits In Practice

Trusted partners are the ones responsible for the issuance and exchange of digital credits as well as interacting with the Digital Reserve System (DRS). As a result, everyday users like yourself can get the benefit of digital credits through a supported e-wallet, without needing to know cryptocurrency at all. It’s important to note that our trusted partners are forming relationships with many major brands to make our digital credits spendable at some of the biggest companies in the world.

Let’s look at how this works using a real-world example. My family is based in Thailand while I’m currently working in the United States. I’m constantly sending money from every paycheck back home to support them, but centralized banks keep charging large fees and the transfers can take over a week to reach their bank account. Using Velo, this process becomes exponentially easier.

To start, I find a trusted partner. Through their digital wallet, I’m able to easily purchase any digital credit that has been minted through the process described above. I make sure my family has a wallet with the same partner, or any other partner connected with Velo, and within 2 minutes and for less than a $1, all my newly purchased credits (which are simply displayed as USD or THB) can be transferred to a wallet controlled by them. They can then spend those credits at any of the trusted partners’ verified merchants, or even exchange them for fiat currencies in a couple clicks.


To recap on our mission here at Velo, we’re aiming to create a stable digital credit system that can be pegged to a wide variety of currencies. While we may have noted Thai Baht and US Dollars in our intro, our system can also be used to peg credits to the value of something like Bitcoin or Ether.

In a world where many governments continue to deteriorate the value of their national currency, we believe that Velo provides a crucial foundation for anyone anywhere in the world to have access to stable value pegged to their fiat or cryptocurrency of choice.

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Velo Team

Written by

Velo Team

The next generation financial protocol built to enhance the current Credit and Reserve infrastructure using smart contract

Velo Protocol

Velo is the next generation financial protocol built to enhance the current Credit and Reserve infrastructure using smart contract reserve system to enable stable digital credit issuance and borderless value transfers for businesses.

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