Electroneum will be partnering with RegTech firm, Yoti, to become the first cryptocurrency to introduce Know Your Customer (KYC) procedures. The introduction of the new KYC procedures is a massive step for both ETN and cryptocurrency as a whole. In the midst of this new development, we sat down with Electroneum’s Founder and CEO, Richard Ells to learn more.
What is “Know Your Customer (KYC)”?
To understand why ETN’s KYC announcement is significant, one must first understand KYC. Know Your Customer (or Know Your Client) is a procedure in which businesses verify the identities of their users. This process helps increase security and transparency while protecting against fraud and other such crimes. The information required by the user will vary, dependant on the volume of currency they are dealing with. KYC benefits both businesses and users by making cryptocurrency transactions safer and more secure.
Intrigued by Electroneum’s recent announcement and what their KYC implementation will look like, we spoke to Richard Ells for more information.
An Interview With ETN Founder, Richard Ells
Blocklr: How will the new KYC procedures change the user experience?
Ells: 95% of our users will have very little to do, and no formal identification to produce. The really interesting thing about the KYC procedures is the fact that we’ve managed to introduce them without compromising our aim of helping the unbanked and the underbanked. The majority of people who typically fall into this demographic would probably come under our lowest tier of KYC, so wouldn’t need to provide a formal proof of identification to complete it. This is because the average wage in these parts of the world is around $120k and it’s highly unlikely they’ll earn half their monthly salary in ETN, so they won’t need to complete anything other than the basic level of KYC, which is just their name and country.
Each of our KYC tiers is based in the European Fifth Directive – a piece of European legislation that is internationally recognized and being adopted by the UK. This means anyone using or holding more than 150 Euros worth of ETN in a three month period will need to provide a little more information and a formal ID, and the very small amount of people that hold or use more than 10,000 Euros worth of ETN over a three month period will need to complete our top tier of KYC, which is also, quite painless. Higher end users are already familiar with KYC procedures from their cryptocurrency exchange accounts, so nearly all users see this as a very positive step for Electroneum.
There’s lots of support and advice in place at our community forum which makes KYC as quick and painless as possible. Users can find our forum linked from our website.
How do you believe this will help you reach your core market of smartphone users in developing and emerging countries?
By knowing who our customers are, in a market that is virtually all anonymous, we stand out as the perfect cryptocurrency partner.
We’ve already seen that MNO (mobile network operators) and MVNO (mobile virtual network operators) are keen to work with us a partner now we have KYC in place. These businesses have direct access to hundreds of millions of smartphone users in our target markets.
How did your partnership with Yoti come about?
We looked at a number of potential partners across the globe and went to Yoti for a variety of reasons. They’re a British company, like us, they were keen to work in the crypto-sphere, and they are a disruptive brand (like us) that is looking to deliver low-cost KYC without cutting any corners. I was really pleased we found them – they share our desire to shake up the FinTech industry in a way that doesn’t compromise security and I know we’ll do some great things together.
How do you think this will impact ETN as a currency and a company?
British and American KYC standards are the highest in the world, so we are embracing the most demanding levels of scrutiny available. This means people can partner with us in a very safe way, with none of the negative associations – inaccurate associations, I might add – that are typically attached to crypto. International jurisdictions see British and American KYC as the gold standard. This makes it easier for us to work around the world. Furthermore, we won’t have to justify the credibility of our system in each and every different country.
What sort of reaction are you anticipating from Electroneum users?
The reaction so far has been very positive. We’ve made it as easy as possible for them to complete their KYC.
Do you predict other cryptocurrencies will follow suit?
Yes. We were the first mobile cryptocurrency; we were the first cryptocurrency to offer mobile mining. Both of these ideas have been copied elsewhere, so it’s inevitable that where we lead, others will follow. Most of the fully decentralized cryptos will struggle to do this, but you may well see a new wave of hybrid cryptocurrencies that follow our lead and embrace KYC.
How does this KYC integration align with your long-term goals?
KYC compliance will be the thing that helps us reach our long-term goals. We are just working through our instant payment beta launch. Though, we now have the partners in place to reach over 100 million users. We have a plan, and the means, to be the cryptocurrency with the largest number of users.
It’s a really exciting time for us. I know KYC is the thing that will help us build a user base of hundreds of millions of people.
You mentioned this development will increase transparency in openness in the world of cryptocurrency. Why do you believe that to be the case?
Knowing exactly who is using, holding, trading and spending our currencies and holding ourselves to the same standards as banks, and electronic payment companies will help us become credible in the eyes of the people we want to accept us, which can only be a good thing for the industry in the long-term.
KYC To Promote Mass Adoption
The world of cryptocurrency is rapidly evolving. Therefore, it is improving each day. Security and transparency in cryptocurrency and blockchain technology continue to advance, KYC is simply another step in the right direction. Making it easier and safer for individuals to operate in the world of crypto is key for mass adoption. Therefore, KYC procedures may be a key factor in doing so. We’re eager to watch the progressions of KYC compliant cryptocurrency.