Singapore start-up takes bitcoin into real world with Visa
A recurring challenge for bitcoin and other cryptocurrencies is how to make them work in the real world. A Singapore-based start-up says the answer is its Visa card.
TenX is pitching its debit card as an instant converter of multiple digital currencies into fiat money: The dollars, yen and euros that power most everyday commerce. The company said it takes a two per cent cut from each transaction and has received orders for more than 10,000 cards. While transactions are capped at $2,000 a year, users can apply to increase the limit if they undergo identify verification procedures.
“You’re mixing two worlds that are night and day,” co-founder Julian Hosp said in an interview. “When the user spends the cryptocurrency, we have to instantly switch these currencies to fiat and pay to Visa straight away. It’s a lot of pathways.”
TenX currently processes about $100,000 of transactions a month. By the end of 2018, it’s targeting $100 million in monthly transactions and a million users.
TenX has an advantage in moving early, but the start-up can expect competition in the future from major financial institutions and venture capitalists with deeper pockets and direct access to clients and databases, said Mati Greenspan, a Tel Aviv, Israel-based analyst at social trading platform eToro.
“It’s an incredible concept,” said Greenspan. “At the end of the day, it’s going to depend a lot on customer relations. Are they meeting the customers’ expectations? Can somebody else do it better?”
TenX’s efforts to make digital currencies spendable come as it joined the many blockchain-based start-ups taking advantage of initial coin offerings (ICO). ICOs are a cross between crowdfunding and an initial public offering that firms use to raise funds by issuing digital tokens rather than stock.
The company had previously raised $120,000 from angel investors and $1 million in a seed round led by venture capital firm Fenbushi Capital, which lists Ethereum’s co-founder, Vitalik Buterin, as a general partner. TenX isn’t expecting to become profitable in the next two years as it focuses on expanding services.
“One thing we want to offer in the end, is that you can switch cryptocurrencies within the app,” said Hosp. “If we do this, we can become the market maker, which can bring in a lot of revenue.”