Mongolia’s capital city of Ulaanbaatar has unveiled plans to launch a pilot program that will see the city’s Nalaikh district deploy a blockchain-based payment system developed by stablecoin startup Terra.
The pilot program will launch within the next six months and offer two main features: peer-to-peer (P2P) payments for instant transfers among users of different banks, and mobile payments. The initiative aims to move the largely cash-based economy of Mongolia into the digital era by introducing transparent and convenient digital payments, according to a release. A special task force was formed to oversee the project.
“We believe this pilot program with Terra will reform how the people of Nalaikh City make everyday payments,” said Radnaabazar Choijinsambuu, governor of the Nalaikh District of Mongolia’s capital city Ulaanbaatar.
“It will contribute to the development and enrichment of the nation’s digital payment infrastructure, while creating a new online platform to easily share information and offering great opportunities to connect with our citizens through advanced technology.”
Co-founded by Korean entrepreneur Daniel Shin, who founded and chairs TicketMonster, one of South Korea’s leading e-commerce startups valued at US$1.4 billion, Terra is a young startup with offices in Singapore and South Korea developing a new stablecoin designed for mainstream adoption. The venture was launched with a clear focus on the e-commerce industry.
As an immediate next step part of its partnership with Ulaanbaatar, Terra will work with the local government to replace the payment method of utility bills and government subsidies with its stablecoin.
“Facilitating P2P and recurring utility payments with Terra are important first steps towards building a blockchain-based financial infrastructure in Mongolia,” Shin said. “From there, we will build out a wider range of financial services, reforming the remittance, loan, and overall banking industry.”
The capital city of Mongolia is the latest addition in Terra’s rapidly growing list of partners, which include TicketMonster, Baemin from South Korea, Carousell from Singapore and Tiki from Vietnam. These form the the Terra Alliance, a group of e-commerce companies which have all committed to incorporating the stablecoin into their business. To date, the Terra Alliance has a collective annual transaction volume of US$25 billion and 40 million customers.
Shin told TechCrunch in an interview that Terra aims to complement existing payment solutions by offering its own Stripe-like payment option that would allow customers to pay using its crypto-coin. In the long run, it intends to evolve into an open platform offering financial decentralized applications (DApps).
Terra is backed by four of the world’s largest cryptocurrency exchanges, namely Binance Labs, OKEx, Huobi Capital, and Dunamu. These exchanges came together in August 2018 to lead a US$32 million investment into the venture, which also included participation from Polychain Capital, China’s FBG Capital, Hashed, 1kx, Kenetic Capital and Arrington XRP, the crypto fund from TechCrunch founder Michael Arrington.