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The Telenor Microfinance Bank, a subsidiary of the Norwegian telecommunications multinational Telenor Group, based in Pakistan, has launched cross-border payments using the blockchain technology of the Alipay payment company.
Claiming it as the first international remittance service based on the blockchain in Pakistan, the bank announced on Tuesday that the product is a joint effort between the subsidiary filippech of the Telenor group Valyou and its Pakistani mobile banking arm Easypaisa, which offers money transfers on time real between the two nations.
Blockchain "will significantly increase the speed and efficiency" of payments, the bank said in a statement, adding that the money transfers will be "highly secure and transparent".
"Pakistan currently receives about $ 1 billion in remittances domiciled in Malaysia and this Easypaisa-Valyou collaboration will change for the better," said Roar Bjærum, senior vice president of Telenor Financial Services.
"Home remittances contributed to over 6% of GDP, accounting for over 50% of our trade deficit, 85% of exports and over one third of imports during the 2017-2018 fiscal year. ", added Tariq Bajwa, governor of Pakistan's state-owned bank.
Alipay, operated by Ant Financial Group of Alibaba Group, has waived the transaction fees for the use of its technology during an initial trial period of one year.
"By eliminating brokerage costs, the new remittance service reduces transaction costs for end users," the bank said in a statement.
While Pakistan seems to be passionate about the potential of blockchain technology, it has taken a negative position in cryptocurrencies to date. In April, the country's central bank, the State Bank of Pakistan, issued a statement stating that the country's financial companies were working with cryptocurrency companies.
"Any such transaction must immediately be reported to the Financial Monitoring Unit (FMU) as a suspicious transaction," the central bank said at the time.
Image of the Pakistani rupee through Shutterstock
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