Fantom Foundation partners with Orienbank to pilot Central
New York, NY, September 27, 2021 (GLOBE NEWSWIRE) – The Fantom Foundation has announced that it has signed a memorandum of understanding with OJSC Orienbank, one of Tajikistan’s largest banks, to test a hybrid CBDC platform for possible deployment across the Republic of Tajikistan. This monumental deal makes Fantom one of the first blockchain projects in the world to begin development of a CBDC solution for a national government.
Fantom and Orienbank will work with the National Bank of Tajikistan to develop and test commercial and retail payment networks for E-SOM, the digitized version of Tajikistani Somoni. Incorporating renowned developer Andre Cronje’s Iron Bank protocol, the Fantom-based product will also feature low-cost currency exchange with a simple on-and-off ramp. Fantom, Orienbank and the National Bank will aim for a nationwide deployment following a successful demonstration.
The Orienbank deal signals the emergence of Fantom as a major player in public sector blockchain initiatives. Fantom offers transformative technologies to governments looking to transition to the modern digital economy. The platform’s near-zero fees and fast transactions provide the security, reliability and scalability required by intensive digital currency applications.
Digital currencies have been a hot topic of discussion lately. Consumers increasingly prefer electronic payments and central banks are keen to offer solutions that encourage the use of national currencies rather than third-party digital payment systems.
In countries like Tajikistan where the population is large and unbanked, the CBDC can encourage financial inclusion. Fantom CBDC makes banking services available through mobile apps that connect to digital wallets. Beyond user accessibility, connectivity enables financial institutions to extend services such as microcredit to underserved areas.
Remittances is another area where Fantom CBDC will have a significant impact. Overall, the average cost of sending a wire transfer is 6.38% of the total amount. These fees add up quickly, especially considering that remittances to Tajikistan were around 26% of GDP (2020).
The Fantom solution dramatically reduces costs by eliminating middlemen and transaction fees while speeding up payment processing and settlement. The features added by the Iron Bank protocol mentioned above will make it easy for senders and recipients of remittances to work with their local currencies. Other perks that Fantom offers include automatic tax deduction, streamlined monetary policy, and more.
The CBDC solution will first undergo a period of testing and refinement. After the first trials, Orienbank and Fantom will seek to roll out the product nationwide in accordance with the sandbox regulations of the National Bank of Tajikistan.
Commenting on this milestone for Fantom, CEO Michael Kong said, âThis agreement with Orienbank validates our efforts to create a viable CBDC solution combining research on the economics and usability of digital currencies with the technology of our platform at high speed and low cost. . Referring to Tajikistan’s recovery from a pandemic-induced recession, COO Barek Sekandari added that “We seek to implement tools that will not only support but accelerate this economic expansion.”
From interbank and large business payment systems to small business transactions and P2P money transfers, Fantom CBDC is poised to transform the existing monetary and payment ecosystems in Tajikistan and beyond.