This is an excerpt. To hear the full interview, click the Soundcloud or Youtube links.
As more cryptocurrency platforms become available to the general public, the relationship between fiat currency and cryptocurrency continues to change. Traditional payment systems are slowly becoming increasingly obsolete, and blockchain-based networks are taking over.
However, the blockchain takeover may be quieter than most people know. Some services have integrated blockchain into their products so seamlessly that users may not even know that they are using blockchain technology.
Recently, Finance Magnates spoke with Tempo Director Anthony Barker about how Tempo has integrated blockchain into its services and about the shifting relationship between fiat and cryptocurrency.
”The Stuff That Banks Don’t Handle Well”
“[Tempo’s] original focus was remittance and international payments, and it’s since sort of switched to small value payments,” Anthony explained. “The stuff that banks don’t handle well.”
He went on to say that banks are currently responsible for about 55 percent of international foreign exchange, and licensed non-bank companies (ie Western Unions) are responsible for about 33 percent. “These non-bank companies are not small,” he said. “Unlike the banks, we typically have to have our money sitting in the country when we want to do a payment.”
“So when you go to someone like a Western Union, they’ll have some money sitting in the other country and they’ll do a payout from their account in that country to make it faster. So you have this problem of using money using the SWIFT settlement system, and it’s really expensive, cumbersome, and slow,” he said.
“That’s why we migrated to blockchain,” Anthony explained, reiterating that banks don’t do well with payment transfers under $10,000. “It’s really expensive, it’s a nightmare [with correspondent banks]; money gets locked up and there’s no idea where it is or where it’s been blocked.”
”Stellar Was a Natural Fit”
Anthony said that therefore, “Stellar was sort of a natural fit for us.” He explained that because Tempo is licensed by the French government, it can only partner with other licensed companies.
Tempo was also attracted to Stellar because of its non-profit and open-source status; Ripple was a for-profit company, and most of the coins were owned by a couple of individuals in the corporation. “My gut reaction was that [Ripple] is not so good for community building,” Anthony said. “[It’s] much more like a Visa/Mastercard.”
“I have a strong belief that open systems win in the long run,” he said. “For example, Stellar has a development challenge [where] they basically give a lot of Lumens away to software developers who are making open-source projects.”
— Anthony Barker (@anthony_barker) July 9, 2018
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“To be honest, Ethereum is probably the best right now [in terms of] development community,” he said. “The whole Ethereum is really focused on almost a different [sort of] tool. It’s not that Ethereum is worse or anything, it’s just a different type of tool for a different kind of problem.”
He went onto say that Stellar’s flexibility has made it a better fit for Tempo. “We worked with Jed McAleb [Stellar creator] and his developers, and we added compliance, so it’s integrated into Stellar as a standard 2nd-layer protocol,” he explained, “so we know how to send first name, last name, and date of birth across.”
“They added that really quickly simply because they’re really focused on this global remittance use case,” Anthony said.
Additionally, Anthony said that he was attracted to Stellar because it’s possible to create different assets on the network. “About a year and a half ago, we created a stablecoin on Tether called EUROT, so that gets rid of a lot of the volatility.”
— TEMPO Money Transfer (@tempo_eu) August 21, 2018
Tempo Users Might Not Be Aware That They’re Using Blockchain
“Our clients are traditional remittance people,” he said. “They come in with cash and they send their money–they don’t even know in a lot of cases that there’s blockchain behind it, so it’s sort of seamless for the users,” he said.
His description echoed Charlie Lee’s words about the future of blockchain technology in an interview that Finance Magnates conducted with Lee earlier this year–that “cryptocurrency is really hard right now–things will become easier. I see a future where people don’t even have to know that they’re using cryptocurrency. They’ll just be sending payments [through a platform] to another person or to a merchant.”
— Anthony Barker (@anthony_barker) August 9, 2018
“[Tempo] looks more like an Asimo or a WorldRemit–much close to that than if you’re using Coinbase or something else, because you don’t have to know about private/public keys; you don’t have to know about losing your keys or any of these things that drive people crazy…all these things that are kind of hard for users are kind of hidden in our service.”
Crypto Won’t Completely Replace Cash
Still, Anthony said that he doesn’t believe that “crypto will replace cash,” because “people are used to fiat.”
“But I think [crypto] will pay an important role” in the future of the global financial sphere, he added. “If you live in a country with inflation, or in a country [where the government] wants to steal your money, it’s sort of like a Swiss bank account for every person.”
“I don’t think that’ll go away, but I think that certain governments are going to fight against it.”