Global finance is rapidly evolving, and digitization is pioneering a switch to a more inclusive financial future. Striving to expedite that future, First DAG is now working with Celo, a global payment ecosystem facilitating access to unique financial tools available to anyone with a smartphone — here’s why.
Banking the unbanked
Celo is a novel cryptocurrency ecosystem with some lofty ambitions. Namely, it aims to bring a faster, cheaper, more effective way to exchange money for over 6 billion smartphone users around the globe.
Celo uses an individual’s phone number as their public key — making it possible to send money to anyone listed in an individual’s contacts. When coupled with the fact that there are currently over 3.8 billion smartphone users globally, Celo’s payment infrastructure can redefine the global remittance landscape and help an entirely new investor base gain seamless access to financial services.
According to the World Bank, financial services remain out of reach for a staggering 31% of the global adult population. Celo’s native blockchain architecture hosts several smart contracts and decentralized applications designed to help the unbanked gain access to the various financial services offered within decentralized finance (DeFi) and digital currency.
Transparency and Celo’s open-alliance approach
Celo’s use of hashed phone numbers as public keys in conjunction with the enhanced visibility and immutability of blockchain technology allows for transparency and accountability while also providing an appropriate level of financial privacy.
Celo reaffirms this commitment to transparency within its publicly available reserve strategy. Every Celo Coin in circulation is backed by the Celo Reserve, which is made up of CELO (a native, fixed-supply asset) and a basket of other cryptocurrencies. Since Celo is based around an elastic supply rule, the number of Celo Coins in circulation can adapt to fluctuations in demand. And thanks to local coins, the reserve can theoretically release more Celo Dollars into circulation while taking Celo Euros out of circulation, and vice versa.
To help expand its global reach and fulfill its goal to foster financial inclusion, Celo has struck up alliances with a growing list of mainstream financial entities. For example, the company’s partners include premier cryptocurrency exchange Coinbase, European telecommunications leader Deutsche Telekom and a host of others, including Ontology, Paxful, Andreessen Horowitz, and Bison Trails.
A practical payment ecosystem
Another reason we chose to work with Celo was their efficient payment system. Payments made via Celo are substantially cheaper than traditional avenues such as bank-based transfers, MoneyGram, Western Union, etc. To put things into perspective, companies like PayPal can charge up to 5% on every payment as convenience fees. However, Celo eliminates the need for any middlemen, allowing users to send money to friends and family across the globe at extremely affordable rates.
Lastly, from its encrypted blockchain system to its elected verification process, which approves new users, Celo ensures that users’ assets are protected from any sort of external, third-party threats, including financial fraud.
Celo’s growth is unstoppable
In the past year, the Celo network has gone from strength to strength. For instance, earlier in 2021, Valora, a mobile remittance and peer-to-peer payments app built on the Celo platform, went live after a successful pilot program. Using Celo’s native financial infrastructure, Valora is able to help reduce global transaction costs to as little as $0.01 per transfer.
Similarly, Celo also recently teamed up with Blockdaemon, a blockchain infrastructure and node provider targeting developers and enterprises. Blockdaemon CEO Konstantin Richter accurately describes Celo as the “Paypal of the crypto world,” pointing to the platform’s unique digital infrastructure as well as its use of a native cryptocurrency as being a game-changer.
For these reasons and much more, First DAG has opted to work with Celo to promote a more inclusive financial system for all. And we’re eager to see where the collaboration takes us.