Zerobank - A global money transfer and exchange system based on Blockchain, Smart Contract Technologies and Sharing Economy
The blossoming of blockchain technology and cryptocurrencies has inspired the pioneers of today. These technologies
have opened previously locked doors, one of which led to the creation of new currencies. These novel currencies are unlike
any we have ever seen, and they are set by history in a unique position to change the world economy – to be accepted as
a means of payment, capable of trade and transfer across borders (bypassing governments and central banks), all while
being completely secure and hassle-free. So far, although cryptocurrencies have substantially impacted the global economy,
no cryptocurrencies are widely recognized as “money” per se. It will take more time for these brand new markets to
stabilize, and for the pioneers of this sophisticated field to figure out how to compete with entrenched fiat currencies.
In the meantime, the world economy still functions by the legacy network of 164 official national currencies (all fiat), and
the problem of sending and exchanging between these currencies still persists. Only considering non-commercial transactions,
the remittance market and money exchange market extract billions of dollars every year from migrants, international
students, and international tourists, among others. This happens because the market between these hundreds of
different currencies depends almost solely on the centralized banking systems and financial organizations handed down
to use from a non-digital era.
Redefine Remittance Business model
Cryptocurrencies may not replace fiat currencies immediately, but the blockchain technology behind them can make a
difference in huge markets right now. We created ZeroBank platform to do just that, by embracing the concept of an
open, secure and distributed global ledger, based on blockchain and smart contract technologies. We aim to help
customers in the money transfer and exchange markets reduce their service costs substantially, with a secure and
verifiable way to make transactions around the world.
Besides technology, ZeroBank also applies the proven concept of a peer-to-peer sharing economy where the earnings cut
from centralized organizations go back towards the community. Many blockchain-powered payment and remittance
gateway projects claim to follow decentralized models and to reduce costs to end users, yet propose business processes
wherein banking systems play some crucial role. This proposal is simply delusional due to two reasons:
- Connecting with the banking systems is technically and administratively burdensome, bringing all the drawbacks
of the traditional banking systems into these projects.
- The obvious conflict of interest between the current centralized banking systems and any project with a decentralized
model makes it nearly impossible for cooperation.
Unlike these projects, ZeroBank utilizes a sharing economy model, which depends on our network of agents within a
community instead of any centralized institutions. Our model maximizes the system users’ benefit by cutting all excessive
intermediary costs from the current banking and money transfer organization (MTO) systems, bringing opportunities
back to the community: a taxi driver, a tour-guide, a hotel receptionist, a student, they can all become agents of ZeroBank,
earning extra income while bringing a valuable service to those around them (see Figure 1: Redefine Remittance Business
This whitepaper will clarify the current market problems, and showcase the solutions created by ZeroBank’s decentralized
sharing economy business model. We will detail the comprehensive technical solutions serving as a solid foundation for
ZeroBank system. We will also discuss how this system fits in the current stage of the world money market, how it follows
a community-oriented model, our vision and future roadmap.
How ZeroBank Works
The money transfer and exchange industry is not immune to the global movement towards decentralization and
peer-to-peer sharing economies. In fact, these areas are poised to be some on the leading edge of those that thrive in this
new paradigm. With the help of blockchain and smart contract technologies, along with the sharing economy model,
ZeroBank will disrupt the outdated transfer and exchange models centralized around “too-big-to-fail” banking and MTO
systems by bringing out a “money barter” model fit right in the current position of world money market.
Instead of attempting to create a substantial new currency per se, ZeroBank utilizes the power of blockchain to create
ZeroBank tokens acting as the collateral instruments of money transfers and conversions. Blockchain technology allows
these tokens to transfer securely in a verifiable and permanent way along an open, distributed global ledger, bypassing all
banking systems or centralized organizations. Thus, rather than moving cash through any banks or MTOs, ZeroBank uses
these “money barter” tokens as a means of moving value from one place/one currency to another, while achieving the
lowest negotiable costs for users (apparently no foreign exchange spreads, only service fees).
Typical end-users and agents of ZeroBank system
In the first phase, ZeroBank tokens (ZB tokens) will be distributed to ZeroBank crowd-funders, who can also become
ZeroBank agents once the system goes into operation. These tokens will be used as the collateral instruments for
ZeroBank agents to make money transfer and exchange transactions and earn from the service they provide. A ZeroBank
agent can make transactions with values equal to or less than the value of all of the ZB tokens he processes. Individuals
wanting to become a ZeroBank agent in the later phases can either buy ZB tokens in the system’s reserve, or from any
exchanges where the token is listed.
For More Details Read White Paper:
ZeroBank Token Economy
A tokenize model for non-commercial money transfer and exchange transactions allows the value of a sharing economy
works best for ZeroBank’s network participants.
- Increased value: The development of ZeroBank user and agent network, along with the growth in number of transactions,
naturally increases the value of ZeroBank system. Thus, ZB token holders gained as they can make larger transactions
using the same amount of ZB tokens.
- Decreased costs: As mentioned in the earlier sections, ZeroBank users can largely benefit from the sharp decrease in
commission fees. They can transfer or exchange the same amount of money for much lower fees, while those fees make
up substantial earnings for individual community workers.
- Convenience and time value: The potential span of individual agent network in ZeroBank system is much larger than
any brick-and-mortar institution service can reach. Thus, ZeroBank tokenized model can make money transfer and
exchange transactions much faster and more reachable to end-users.
- Security value: Instead of wasting enormous resources on massive IT inter-systems like how banking systems and MTOs
currently do to verify and secure transactions, blockchain and smart contract technologies permit ZeroBank tokenized
system to make verifiable and highly secure transactions at minimal costs.
- Compliance value: Blockchain technology allows all system participants and transactions information to be permanently
and immutably stored forever, creating a detailed reporting database for ZeroBank. Any suspicious transactions can be
easily traced and reported. Therefore, compliance can be simpler executed and compliance costs can be minimized.
Referral programs will also be implemented into ZeroBank’s operation. For example, existing users or agents who refer
others to become new participants in ZeroBank system will receive service discounts (for users) or ZeroBank tokens (for
agents) once the new participants’ first transaction on the platform is complete.
ZeroBank follows a peer-to-peer business model similar to Uber and Airbnb – the successful startups of the sharing
economy era. We aim to create a platform for individual customers and service providers to connect and interact on
demand. Thus, ZeroBank will open our local offices in each market we operate in to foster the platform.
ZeroBank local offices:
First, ZeroBank local offices will be opened in the most dynamic tourism cities where our team’s networks are already in
place, e.g. Tokyo, Seoul, Bangkok, Hanoi, Warsaw, London, Paris and New York. From there, we aim to have local offices in
all major remittance and tourism countries around the world. The responsibilities of ZeroBank local offices include:
- Facilitate ZeroBank’s operation and legal compliance in the local market;
- Run marketing campaigns to raise awareness of ZeroBank system over the market;
- Help agents and users sign up on the ZeroBank platform;
- Perform KYC procedures on all agents and users;
- Provide support on any other matter in the market.
ZeroBank local office in each market operates independently, following the business strategies set by the ZeroBank headquarter.
Structure and fees:
ZeroBank headquarter controls the network of ZeroBank local offices around the world, and each local office controls the
whole market it operates in, including all local agents and end-users.
Each transfer or exchange transaction made by an agent and an end-user in a local market results in a commission fee.
This commission is taken from the end-user in the form of ZeroBank tokens, and is redistributed to the local office and the
agent involved. The redistribution ratio is to be determined based on each market where ZeroBank operates. A part of
ZeroBank local office’s earnings goes back to ZeroBank headquarter for system maintenance and administration.
The commission fee structure in each market will be different. Other factors in a transaction such as the distance between
the end-user and the agent, or other special requirements from the end-user, may result in higher or lower commission
fees. Overall, ZeroBank aims to keep the total commission fees at around 2% to 2.5% for a standard transaction (1,000 USD
ZeroBank headquarter may invest in our newly-opened market through the local offices for rebate programs. Such
program lowers the transaction fees for end-users in order to help engage new customers and enlarge the user base. The
growth of income for ZeroBank later on comes from the increase the number and amount of transactions made by these
users. Other revenue model including running ads will be carefully measured in later phases.
A nine-month vesting schedule is applied to ZeroBank team including co-founders and advisors. Each team member will
receive a portion of their allocation according to the following schedule:
- 2 months afer the end of Public sale : 30%
- Each month afterwards : 10%
Until the end of the nine-month vesting schedule.
The details of funds utilization are as follows:
ZeroBank Roadshow Recap at Blockchain Forum 2018
ZeroBank roadshow started off on Thursday, 14th June 2018 at one of the biggest blockchain forums in Vietnam — “Blockchain Forum: Vision and Development” hosted by VNExpress and Ministry of Science and Technology at JW Marriott Hotel.
In this prestigious forum about blockchain technology which ZeroBank is one of the honored sponsors, its aims are to spread the spirit, awareness and knowledge about the importance of blockchain technology to Vietnam’s development in near future.
At our roadshow event, we had been sharing about ZeroBank project details including the explanation about non-commercial versus commercial money transfer, the market size for ZeroBank project.
Our team also pointed out the 3Cs problems of the money exchange market and remittances: Cost, Coverage and Compliance and how ZeroBank brilliantly resolves them.
We also had an engaging ZeroBank Q&A sessions with all of the attendees followed by a fun Lucky Draw session. ZeroBank team is glad that our attendees show great interest in the project by asking a lot of questions revolving around ZeroBank application. We also received many praises and welcomes of our project’s breakthrough ideas.
Highlighted questions at ZeroBank roadshow
Q: Is there possibility that transactions within ZeroBank violate the law of Vietnam?
A: Token is cryptocurrency and its existence is for exchanging money value, not for direct payment between users. Considering current laws of Vietnam, ZeroBank transactions do not violate or against the laws.
From the talks of representatives from the government at today’s Blockchain Forum, we all can see the positive signals towards cryptocurrency as well as blockchain technology applications.
Moreover, ZeroBank project currently already has its own solutions to adjust its service operation to be a legal service at any country it’ll be reaching to.
Q: In case an agent and a money receiver meet up at a place with no Internet connection, how can the transaction can be proceeded?
A: It’s a fact that there are remote places that have no Internet connection. However, the coverage of the Internet worldwide for sure, is much wider than the coverage of the banking system. With the current fast-paced growth of the internet, its limited coverage will soon no longer a problem to online transactions.
Q: Will ZeroBank network be bigger than MoneyGram’s?
A: Yes, from our vision, more and more agent will join ZeroBank’s system and there will be no boundary for its network.
Q: How do you ensure the security for agents and money exchangers during their real life transaction? For example, prevention of robbery, criminals, etc? Which locations are safe? Who will be the transaction supervisor?
A: ZeroBank transactions will be secured not only on the cyber side but also in reality. We have a system of verified agents who are trusted and highly rated by the people participating in the transaction activities themselves. There also will be an user guideline for everyone joining in the ecosystem.
ZeroBank project is led by an excellent team who has extensive experience in money transaction security, especially Mr. Kai Yee — our CEO and co-founder. He is the specialist in Anti-money Laundering and Combating the Financing of Terrorism.
Thank you for all your support! ZeroBank roadshow was an overall success, with loads of fun and inspirations. It also was a great starting point for the team to reach out more potential investors as well as users in the near future.
A new-age money transfer method is what international students have been waiting for
According to GoAbroad, there are 4.5 million students in the world currently studying abroad, 65% of whom are from developing countries relocating to developed ones with the hope for better education. This number implies huge demand in sending money overseas to cover up the living expenses in those first-class countries. Also, according to surveys, financial support is a critical aspect of foreign education and one of the main pressures for international students. Due to these reasons, making cross-border money transfers more accessible and less costly for international students is ripe for change.
Problems of using banking services when studying abroad
Bank account abroad has its flaws
Remittances for tuition, boarding and many other expenditures are vital to a foreign student because it’s the main financial support they can rely on. And the only way to receive money from home safely and constantly is to have a bank account abroad. In the most convenient scenario, non-tech-savvy parents will send a huge sum of money at once and let their children decide on budget allocation. Is it actually convenient as it seems? It isn’t, considering the transaction fee and time-consuming procedure of the traditional money transfer via banks or money transfer organizations.
Behind the scenes of the banking system are a lot of human’s manual processes, the costs of sending money abroad as well as the amount of time to handle one transaction’s paperwork; therefore, are usually piled up.
Take money transfer from Vietnam to the U.S. for example. Parents have to wait in lines of people for their turn at a major bank, just to fill in required forms and then again, wait for the bank clerk to process the papers manually. If these papers are correct, parents have to pay around 5%, which means for every $3,000 they send, they will lose $150. This can translate into astronomical budget for any 4-year college term.
In a worse case, if there were errors in those paper work, whether parents or the bank clerk fills in the wrong information for example, the whole process and procedures need to be redone, so it will take you even more days and cost even more than that already-high 5% transaction fee just to finish a transaction.
Debit/Credit cards cannot address the problem
Another way to manage students’ budget more effectively is registering a debit/credit card in the home country. Parents will top up a specific amount of money each month in advance or pay later according to bank’s credit report. Again, it sounds cost-effective at first, but the truth is that for every transaction, the exchange rate and spread between currencies will be added up to the cost. This may be trivial in each separate transaction, but for around 30 transactions per international student per month on average, according to the Guardian, the extra cost would be exorbitant.
Alternatives are still inaccessible
These above problems could be addressed by alternatives. However, the majority of parents are not familiar with such alternatives as MTOs (money transfer organizations) or online banking procedures so that they need to transfer money directly at the bank’s counter, which might waste them unnecessary shoe leather costs. Considering the limited coverage of banks in the remote areas, parents living here even have to face more difficulties sending money abroad.
International students and their parents need a better, cheaper and easier money exchange system
ZeroBank, a new-age tech-backed money transfer and exchange ecosystem with blockchain technology, smart contracts and an integrated sharing economy model offers international students a much more convenient and effortless way of sending and receiving money abroad.
Via ZeroBank’s platform, students can receive money sent from home more quickly, directly, at any time, anywhere they want through a network of community agents. Thanks to blockchain and smart contracts, ZeroBank allows everyone to easily make a transaction without having to worry about intermediary fees.
As these costs are minimized and the transaction steps are simplified, ZeroBank not only helps lighten the financial burden for international students as well as their family but also makes cross-border transactions a no-brainer task for everyone including those without cryptocurrency knowledge.