The International Blockchain Monetary Reserve (IBMR) and blockchain firm Algorand are jointly launching a microfinance platform and a dedicated token to promote financial inclusion in Southeast Asia.
Per a press release shared with Cointelegraph on Dec. 12, the partnership between the two entities aims to develop and launch a microfinance ecosystem based on Algorand’s blockchain technology in a bid to boost the financial inclusion of the urban working poor in the region. Within the initiative, the parties will also introduce a dedicated token dubbed the Asia Reserve Currency Coin (ARCC).
Not to provide free spending money
ARCC is designed to provide debt-free capital to the urban working poor in Southeast Asia, wherein over 300 million adults do not have a bank account or lack proper access to credit, investment and insurance facilities. People will purportedly be able to earn free ARCC by reporting corruption and receive investments for their businesses in the form of ARCC.
Individuals will also be able to obtain ARCC as a reward through gamified activities. By aggregating data directly from people, the organizations hope to target both corruption and the problem of the unbanked in the region, the IBMR team told Cointelegraph, adding:
“But the main focus of our site is not to provide free spending money, but for users to amass debt-free capital over a 3 year vesting period for entrepreneurial investment.”
Real-world use case
Speaking about how the initiative will actually help people get and cover insurance, IBMR explained that the dedicated ARCC.one will operate as an asset management platform based on the holdings on the users, enabling them to use their own ARCC within the platform to take advantage of services such as credit, investment and insurance facilities.
What makes it possible is the ARCC Reserve, according to IBMR, who establishes relations with microfinance service providers to present financial products to the users that are already guaranteed with funds from the ARCC Reserve.
When it comes to investment services, people will purportedly be able to pool or stake others using ARCC in a kickstarter type of process, with IBMR further converting that ARCC to the appropriate currency for real world deployment. IBMR continued:
“Profits generated from these joint community and entrepreneurial projects can then be automatically distributed to users as ARCC tokens via the platform. All of those earned ARCC tokens, after a period of vesting, will be able to be withdrawn to a user’s own wallet then used to either invest or spend as debt-free capital.”
ARCC tokens supply and governance
According to IBMR, there will be a fixed maximum supply of the tokens on an annual minting schedule based on a 50-year monetary policy. The token will be managed like a hedge fund based on the performance of ARCC in its price, while the actual token economy is governed by the ARCC Monetary Policy Council composed of 88 members.
The initial price of the token is not yet determined as the parties are still adjusting the token economics according to the parameters of issuing as an Algorand Standard Asset (ASA). ARCC “derives its value through traditional currency reserve structures and from exponential decentralized network effects.” Stipulating on the issue, IBMR explained:
“In the case of ARCC, ours is a decentralized information network whereby the more nodes there are providing data, the more integrity and scope there is to the data aggregated and thus providing a more definitive social public mandate. ARCC is earned and distributed as an incentive for this public mandate network and then has further utility in providing liquidity and transaction to asset management platform. Finally we come full circle where this ‘decentralized network effect’ of value is then expressed through the ARCC underlying assets and reserve that ultimately acts as the buyer of last resort for the value of ARCC.”