The first blockchain remittance service between Malaysia and Pakistan has been launched. The Telenor group announced the news in Pakistan English daily Dawn.
Telenor microfinance bank signed a contract with Malaysia-based remittance company Valyou for a system that will be supported by AliPay’s blockchain technology. The service claims to allow Malaysia-based Pakistani workers to send remittances back to their homeland. It is important to note that Malaysia has emerged as a major contributor to the overseas remittances for Pakistan during the past five months of the fiscal year, recording a 53.3% increase.
According to initial reports, transaction fees will be exempted for the first year. Moreover, the company ensured that the money transfer would be made safe by encrypting all the information with advanced protocols. Along with that, the sender and the receiver would be able to track their transactions as well.
The launch ceremony was attended by the Governor State Bank of Pakistan (SBP), Tariq Bajwa. In his remarks, he said that international remittances, valued at USD 20 billion annually, are the backbone of Pakistan’s economy. These remittances are essential for the macroeconomic stability and a positive spillover in improving the lives of millions of families. He added that home remittances are equivalent to over 6% in GDP and maintained that the blockchain-based remittance services would help in keeping the flow of money from abroad to Pakistan.
Although the company hopes that the service will enhance the efficiency and speed of the money transfer, it acknowledges that users might still be reluctant to use the technology, especially as other options are available. The lack of awareness regarding blockchain technology can also make it difficult for the users to trust the new service.
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