Abstract : Velo utilizes Stellar’s payment friendly blockchain technologies and incorporates it with smart contract functions, and enables business to transfer all kinds of currency types with very low fees at extremely quick speed.
The market share for cross-border payments globally now exceeds $1tn, among which the market value of Southeast Asia alone reaches $150bn. At the same time, more than 170 million people in Southeast Asia still have no card, bank account and cannot access to basic financial services. Now, however, the nature of cryptocurrency can provide perfect solutions for cross-border transfers.
Velo Protocol is a financial protocol capable of issuing digital credits that can be anchored to any fiat currency. These digital credits can be used for business transactions, interactions and operations between trusted partners. Meanwhile, Velo offers some of the typical features of the growing trend towards "cross-border payment protocols".
Therefore, we're here with Velo to explore the cross-border payment protocol, an area that's not what it used to be.This time, ChainDD has invited Tridbodi Arunanondchai, the vice president of Velo Protocol, to be a guest of "CEO On Chain" program to discuss the optimal solution of blockchain for the cross-border remittance.
The following is the dialogue content with the guest, edited by ChainDD:
Q1. Could you please introduce the project Velo to us, and what problems the Velo protocol was created to solve? Could you tell us something about yourself?
Tridbodi: I am a serial tech entrepreneur and investor. I’m the Vice Chairman of Velo Labs and Group CEO of Lightnet, a revolutionary settlement and clearing network.
Velo is a blockchain based financial protocol enabling digital credit issuance and borderless asset transfer for businesses using a smart contract system. Velo Labs’ mission is to build a Federated Credit Exchange Network, powered by the Velo Protocol. By connecting the legacy finance, CeFi and DeFi industries, Velo Labs’ Federated Credit Exchange Network positions Velo Labs as one of few blockchain projects with a clear path towards mass adoption.
Q2. What kind of support is needed in the field of cross-border payment protocols in order to achieve rapid breakthrough?
Tridbodi: Solving problems in the cross-border remittance market requires both technology innovation and a strong business network.
Technology is key to solving problems in the system - Velo leverages the latest blockchain technology such as the Stellar network and smart contract functions to develop the Federated Credit Exchange Network, thereby providing partners with a cheaper, faster and more seamless way of transferring values across borders. Partners are needed to get the technology into real-world adoptions. Technology breakthrough cannot truly show its benefit if it’s not used to empower businesses.
Cross border remittance practice is a complicated business and the market has many established players and businesses, many of which have built solid relationships with Velo. As a result, Velo Labs truly understands the pain points of industry players and can provide them with real solutions that can be adopted to empower their existing business.
Q3. How do you view the current competition in the field of cross-border payment and clearing settlement?
Tridbodi: As our initial focus is on international remittance, I would say projects like Ripple are clear competitors. I have absolutely no doubt that we have the skills and backing necessary to compete with projects like Ripple.
You can also say that we are competing with something like SWIFT. Current online payment solutions such as PayPal or Square still utilizes SWIFT as the solution, therefore still inherits the high cost/high friction problems that SWIFT is plaguing the system.
Velo utilizes Stellar’s payment friendly blockchain technologies and incorporates it with smart contract functions. As a result, we are able to develop solutions such as the Federated Credit Exchange Network that enables business to transfer all kinds of currency types with very low fees at extremely quick speed. With the support of our partners such as CP group and Visa, we are able to empower the payment industry starting in the SEA region, thereby truly achieving wide scale business adoption.
Q4. Crypto payment stablecoins to a certain extent assume the function of cross-border payment protocols, USDT, USDC, DAI and other stablecoins are increasingly becoming the core participants in the market value of the crypto industry. How do you view the challenges of the stablecoin mentioned above? What are the advantages of the Velo protocol in comparison?
Tridbodi: Using the Velo Protocol, trusted partners can put forward VELO tokens to issue digital credits pegged 1-to-1 to any fiat currency. The Velo Protocol solves three issues that plague the adoption of stablecoins:
a. A lack of transparency
b. Limited versatility
c. Inadequate regulatory compliance
Another major reason stems from the VELO token’s unique trait as a “bridge asset.” VELO tokens link the values of various traditional assets to corresponding digital credits. In this way, VELO tokens can serve as a vehicle to transfer liquidity and value onto the Velo Network. As the Velo network accepts more types of assets as collateral when issuing digital credits, the VELO token bridges the gap between all asset types, guarantees the value and liquidity of digital credits, and acts as the Velo Ecosystem’s universal collateral.
Q5. What is the function of VELO tokens in the overall service? How is it to be minted? In what way do VELO tokens capture and transfer value within the system? What is the value of VELO for retail investors?
Tridbodi: VELO token is a cryptocurrency issued on the Stellar Network. The VELO token acts as a universal bridge asset for the entire Velo Ecosystem. It backs every digital credit transaction, thereby guaranteeing settlement among Velo Labs’ partners.
As a “bridge asset,” VELO tokens link the value of traditional assets to digital credits pegged 1:1 with any fiat currency, via the Velo Protocol. As VELO tokens back every transaction made on Velo Labs’ FCX, VELO tokens serve as the network’s universal collateral.
For retail investors, VELO token increase in value as more services and transactions are conducted on Velo’s federated credit exchange network that requires more VELO tokens to be staked as collateral for issuance of digital credits.
Q6. Are there any notable developments for Velo in the next phase? Meanwhile, what are your company's development priorities this year?
Tridbodi: Yes. In 2020, we have completed the development the Federated Credit Exchange Network as well as achieving the first transaction on the network, thereby achieving our target ahead of time. In 2021 we are looking for further enhance functions in the FCX network, with the addition on upgrading the Velocity wallet, as well as developing mobile versions of the FCX to make it easier to access for our partners
Additionally in 2021, we will also be developing lending solution for the FCX, allowing our partners to access lending practices through the FCX.
Lastly, enriching the partnership ecosystem will continue to be our core focus, we will continue to expand our network of partners while progressing forward with our existing collaborations such as Visa and SEBA.
ChainDD's "CEO on Chain"program focuses on hot events and high-quality projects in the blockchain industry, and invites elites with top cognitive in the global cryptography industry, blockchain industry, financial industry or other vertical areas to have a dialogue with us.
This program will be broadcast live in the official community in the form of text, video and audio.The community gathered high-quality resources from within the industry to discuss with guests and express their opinions freely, aiming at promoting cooperation and exchange among quality projects.