Hong Kong-based blockchain firm Bitspark has been at the forefront of the mobile payments revolution in the developing world. Earlier this month, it launched a web platform enabling customers to transact in “stablecoins” pegged to eight major currencies, in addition to four cryptocurrencies. It has signed up a vast network of nearly half a million channel partners across the world from Southeast Asia to Africa to make the dream of quick, inexpensive and effortless cross-border remittances a reality. Blockchain Asset Review (BAR) spoke to the firm’s founder George Harrap on how his company has been igniting the sparks of the movement in financial inclusion.
By Tsering Namgyal
Q: You have been blazing a trail in the payment space, notably with the issuance of stable coins pegged to HKD and the Philippine Peso. How does BitSpark promote financial inclusion?
A: Bitspark promotes financial inclusion by enabling anyone from a developing country to digitise their local currency and manage it without the need for banks or the risks of carrying cash. The only way to get people financially included is to provide an easy on and off-ramp for them to be able to get into or out of the financial system, that’s Bitspark.
Q: For your customers, what difference does it make between using Bitspark or through traditional banking channels?
A: Our core customers are money transfer companies who use Bitspark behind the scenes to settle payments. The end customer still visits their local money transfer shop and uses them, just the exchange rates and avenues to receive money are better.
Q. How many outlets do you have in the developing countries? You say half a million: who are they and how did you manage to sign up so many of them in such a short period of time? And what makes you different from all the other money service operators?
A: The half million number is the number of locations you can receive payments from through Bitspark. These are not Bitspark locations but are the existing money transfer networks that already exist and integrate with Bitspark. Bitspark makes use of existing bricks and mortar locations and helps to digitise their payment avenues.
Q: You have announced that your customers can now deposit four more cryptocurrencies in addition to eight national currencies. Does that mean any of your clients can physically change cryptocurrencies at your partners into fiat currencies? Please explain, especially how do you manage AML/KYC challenges?
A: Yes, anyone can exchange between any of the currencies on our system, be it crypto or fiat. The KYC is managed by the endpoints in our network – the existing money transfer companies – as they are the ones interacting directly with the cash and also the licensed entities in the ecosystem.
Q. Finally, how are you regulated and where are you based. Since regulations continue to evolve, do you have any regulatory risks given that you have a presence in so many jurisdictions, including where cryptocurrencies are treated with suspicion?
A: Bitspark is a Hong Kong-based bankless money transfer solution and is not regulated or have any licenses as cryptocurrency trading is not a licensed activity in Hong Kong. Bitspark has a network of physical cash agents and can operate P2P without us needing a presence in the local jurisdiction or any banking relationships. This limits risks involved around specific country regulations especially considering our stablecoins are crypto-collateralised and do not need third parties to hold balances on our behalf.