How Velo Labs is making the world flat
In his 2005 book “The World Is Flat”, New York Times Journalist Thomas Friedman posits that a borderless world of commerce is inevitable. He believes that the rapid development of technology is creating a level playing field for individuals around the world. Today, the world is increasingly resembling the “flattened” landscape that Friedman proposes. As technology progresses, the old barriers that once fragmented the world are gradually being torn down.
The end of geographical barriers
With the widespread use of the internet, people can now connect with others in previously unreachable parts of the world. Residents of small towns in Thailand, for instance, are now selling locally made goods to Americans in Manhattan through online platforms like Amazon.
The end of corporate barriers
Sales of goods are increasingly influenced by the opinions of individuals with a strong online social media presence. Corporations are no longer the strongest voice influencing consumers’ purchase decisions.
The end of communication barriers
Technological developments have made it easier for business to be conducted irrespective of language barriers. Anyone can use online translators or templates to conduct business with minimal friction.
The disappearance of geographical, corporate and communication barriers is creating a world where the individual is elevated and where historical and geographical divisions are becoming steadily more irrelevant. However, as these traditional trade barriers are being removed, people are still restricted in the payment methods available to them.
In contrast to the technological innovations that have revolutionized operations, logistics and marketing, the international remittance industry continues to operate using traditional institutional structures that are nearing obsolescence. For example, people are still forced to rely on the problematic SWIFT system to make transactions. This means that some people’s payments are required to pass through multiple intermediaries, resulting in high fees and lengthy processing times. This is the case even without considering the challenges caused by regulatory differences between regions.
In many ways, payments have become the last barrier hindering Thomas Friedman’s “flattened world”.
Multiple attempts have been made to break down, circumvent and resolve payment barriers. For example, notable platforms such as PayPal provide electronic payment systems to replace traditional paper methods. However, cross-border payment solutions still operate under multiple restrictions due to today’s international remittance system.
The emergence of blockchain technology and the cultural trend toward decentralized systems present an exciting opportunity to revolutionize the traditional international remittance system. Nevertheless, the traditional players in the international remittance industry — whose collaboration is a prerequisite to adoption — have been reluctant to integrate blockchain solutions into their traditional business and financial frameworks as blockchain solutions are still unproven in their view
The Velo Protocol combines the applicability of mainstream electronic payment solutions with the advantages of blockchain technology. As a blockchain financial protocol, the Velo Protocol enables digital credit issuance and borderless asset transfer for businesses using a smart contract system. Unlike fully decentralized blockchain models that seek to replace existing financial institutions and systems, the Velo Protocol is plotting a more practical path. Rather than trying to replace, the Velo Protocol adapts and enhances.
One of the biggest challenges facing digital credit solution providers is convincing the public at large that they have in place an effective regulatory compliance framework and system. Velo Labs has placed regulatory compliance at the forefront of its objectives and implemented a robust compliance framework which not only detects but prevents participants from engaging in AML/CFT breaches. In order to become a Trusted Partner, individuals are required to complete a series of qualification audits and AML/KYC procedures before being able to issue digital credits corresponding to any fiat currency. In this way, the Velo Protocol has chosen regulatory compliance as a design concept.
The Velo Protocol is designed with regulatory compliance in mind. It is precisely this approach that makes it able to achieve real-world adoption. With the Velo Protocol, the end of payment barriers is near, and Thomas Friedman’s “flattened world” is finally more than just a dream.
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