International remittances are an essential part of the global economy, particularly in emerging markets where it is common for families to rely on support from relatives working abroad. The global remittance market is estimated to be a $500 billion industry.
However, international remittances are expensive, and in the developing world, many people don’t have access to financial services. What most citizens do have, however, is access to a mobile phone. This is where Telcoin (TEL) comes in.
Telcoin partners with telecom operators to provide a digitally native money service to mobile users throughout the world. Using blockchain technology they are removing the middleman and disrupting the remittance industry.
What is Telcoin?
Telcoin is both a cryptocurrency and a network that allows money transfers and mobile banking services via the Telcoin application.
Telcoin partners with companies in the telecom industry to provide their services. The telecom partners receive a free service to offer their customers and in exchange, the Telcoin platform gains access to this customer base.
To use the Telcoin app, mobile users must hold TEL tokens. The TEL token is an ERC-20 token on the Ethereum blockchain and the basis for the services Telcoin offers.
Read on to learn more about Telcoin and the TEL tokens’ unique use cases.
Telcoin Use Case: Worldwide Remittances
Historically, intermediaries such as Western Union (the largest company in the remittance sector) have been necessary to transfer money between senders and receivers abroad. This allowed these remittance services to charge exorbitant fees while acting as an inefficient middleman. According to the World Bank, the average remittance fee worldwide in 2021 was 6.38%.
Telcoin utilizes blockchain technology to remove the reliance on a middle man and replace it with a decentralized immutable ledger. Since there is no intermediary company that must extract profits from the transaction, Telcoin can offer much lower fees than traditional remittance services. Telcoin claims that they are committed to keeping total fees below 2.5%. This 2.5% fee is split by both the sender and receiver who each respectively pay 1.25% of the total transaction value.
Remittances are sent using Telcoin’s mobile app which aims to provide a seamless experience by making the act of sending money abroad as easy as sending an SMS (text) message.
Telcoin users have the choice of either sending the Telcoin token itself or sending traditional fiat remittances. In the case of fiat remittances, Telcoin acts as a temporary bridge currency between the currencies of the sender and the receiver, allowing transfers to be nearly instant.
Telcoin Use Case: Domestic Banking for the Unbanked
Global remittances are not the only example where traditional financial institutions have failed citizens of the developing world. There is also a significant population of the world with limited or no access to traditional banking services.
According to the World Bank, this number is over 2 billion people or roughly 30% of the planet lacking access to financial services in the legacy financial system. This is especially true in Asia and Africa, two of the fastest-growing and most important markets moving forward for the future of the world economy.
This has created a large market for mobile money platforms. These platforms allow mobile users to store money and make payments with their cell phones. According to Telcoin, there are over 300 million monthly active users in the mobile money ecosystem worldwide and mobile money adoption is growing quickly.
Telcoin allows users to have mobile money access and make instant transfers and payments with minimal transaction fees. All of this is done via the user’s Telcoin application. Similar to remittances, users have the option of using TEL itself or to make fiat payments and merely use TEL as the means to transfer value, in this case, automatic conversions are made on behalf of the user.
Telcoin Use Case: Price Speculation
In addition to being the native token of the Telcoin ecosystem, the TEL token can also be held simply for exposure to the price. Like most cryptocurrencies, Telcoin is bought and sold for trading and speculating that the price will continue to rise over time.
Shorter-term trading tends to focus on news cycles and technical analysis (analysis of charts) to try to determine which direction the price will go within anywhere from 10 minutes to several-day periods. Longer-term investing, on the other hand, means holding the token for an extended time period (for example 2 years) in the belief that the value of the token will have increased in that time frame.
Whether or not the TEL tokens price increases will likely be related to how the network expands and grows over time. If Telcoin can continue to gain traction amongst both mobile operators and mobile phone users, then more TEL tokens will need to be purchased by these users to participate, this will, in turn, drive the price higher. If, however, the Telcoin network is not able to gain more users, there will be less demand and thus a lower price for the token.
Does Telcoin Have a Future?
In this guide, we have seen that TEL is a utility token that is necessary to interact with the Telcoin network. The Telcoin network and the subsequent TEL token have two primary use cases: to provide affordable remittance services for those sending money abroad and to give mobile money accounts to those who have been left behind by the traditional banking system, but who have access to a cell phone.
There are, however, valid concerns regarding whether or not Telcoin’s low fees are sustainable given that the TEL token runs on the Ethereum network, where current transaction fees range from $15 to $200. Ethereum is hoping to fix this problem with Ethereum V2, however, there is no set date for its release. In the meantime, Telcoin seems to be subsidizing the difference to continue attracting new customers. This should be taken into consideration when looking at holding the TEL token.
There is a strong case to make, however, that the future will be dominated by technologies that cater to the growing number of mobile phone users in developing countries as they increase their purchasing power. Telcoin is very well positioned for this development. If TEL can pivot to a lower fee chain, or ETH V2’s release comes to fruition successfully, Telcoin will be a cryptocurrency to look out for.