BitMinutes makes its mark by creating a token for universal prepaid phone minutes

The world is awash in unused mobile phone minutes. Billions of people buy them every day to replenish their phones. The minutes facilitate communication between people and businesses. They also, in less developed communities, are informally used for financial transactions. BitMinutes (BMTs), which can be converted to mobile phone minutes on a wide range of carriers and used as a store of value for making payments, is formalizing that process and broadening the scope.

The company that created BitMinutes tokens (BMTs), also called BitMinutes, is actively building out its model in Africa, and has an eye on other developing markets globally.

At the heart of its popularity are two factors:

First, there are billions of underbanked people in the world who don’t have access to traditional financial services.

“Today, there are more than two billion adults who are underbanked,” said BitMinutes CEO Tom Meredith. “That means they don’t have the ability to conduct financial transactions. In developing countries, the situation is especially dire, with more than 40 percent not having a bank account. Most of these underbanked people rely on cash and bartering to conduct business. This makes it very hard to expand a promising local economic initiative or new enterprise.”

Second, mobile phone minutes have limitations when it comes to their use as a store of value for financial transactions. For example:

  • The owner of the minutes can only give them to people on the same network – it’s completely siloed.
  • Once the airtime is purchased, it cannot not be converted back into cash. The only use for it is to make a phone call.

This informal currency needed a vehicle for breaking these two walls down. Enter the BitMinute (BMT). Built with the distributed-ledger advantages of blockchain technology, the BitMinute does a number of things to turn the mobile phone minute into a more useful asset.

BMTs are tradeable between networks. A person buying BMTs to use on Vodaphone in one country, can send those BMTs to an Etisalat customer across an international border. Through a Trusted Agent operating in a local distributor’s storefront, the BMTs could then be turned into cash again.

“As BMTs become more widely bought, owned and traded, they may start to replace the network-specific mobile phone minutes sold by mobile operators,” said Meredith. “Breaking the constraints on the free flow of mobile phone minutes between any two phones across the globe is the BitMinutes’ mission. We see our work as part of the global war on poverty, with our role one of removing barriers to entrepreneurial opportunities and fostering greater financial inclusion in underserved communities everywhere. And this isn’t a grant or charity. This has to be self-sustaining. Which means there has to be a way for everyone involve to make a little money, just as happened with M-Pesa in Kenya.”

The “entrepreneurial opportunities”  that Meredith speaks of are created in two ways. First, BitMinutes enhances the free flow of working capital to the underbanked, who are enabled to start their own businesses. Second, the company has created Trusted Agent Network by working with local retailers, distributors and even financial institutions. These agents, once trained by BitMinutes, bring the transparency and confidence needed to draw more informal economic activity into the formal economy.

“Small businesses can make money using BMTs in different ways,” said Meredith. “They can sell BMTs just like the regular prepaid minutes they already sell. And they will soon be able to lend BMTs as an asset-backed token, using a BMT balance as collateral for a microloan.”

“This is the beauty of our network-based financial services distribution system. The local retailer does not have to change behavior dramatically to become a TAN Agent and start offering services. And by having the ‘bank branch’ infrastructure in the cloud, securely accessed by the smartphone in the agent’s hand, network expansion is simplified and our ability to expand accelerates.”

Hundreds of agents are already up and running in Nigeria, facilitating the sale of millions of BMTs, a quantifiable harbinger of things to come.

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