NEW YORK–(COMMERCIAL THREAD) – The Fantom Foundation has announced that it has signed a memorandum of understanding with OJSC Orienbank, one of the largest banks in Tajikistan, to test a hybrid CBDC platform for deployment across the country. This monumental deal makes Fantom one of the first blockchain projects in the world to begin development of a CBDC solution for a national government.
Fantom and Orienbank will work with the National Bank of Tajikistan to build commercial and retail payment networks for E-SOM, the digitized version of Tajikistani Somoni. By integrating developer Andre Cronje’s Iron Bank protocol, the Fantom-based product will also include low-cost currency exchange with a simple in-and-out ramp. Fantom, Orienbank and the National Bank will aim for a nationwide deployment following a successful demonstration.
The Orienbank deal signals the emergence of Fantom as a major player in public sector blockchain initiatives. Fantom offers transformative technologies to governments looking to make the transition to the digital economy. Fantom offers the security, reliability and scalability that intensive digital currency applications need.
Digital currencies have been a hot topic lately. Consumers increasingly prefer electronic payments and central banks are keen to offer solutions that encourage the use of national currencies rather than third-party digital payment systems.
In countries with large unbanked populations, the CBDC can encourage financial inclusion. Fantom CBDC makes banking services available through mobile apps connecting to digital wallets. Beyond accessibility, connectivity allows financial institutions to extend services such as microcredit to underserved areas.
The CBDC solution will first undergo a period of testing and refinement. After the first trials, Orienbank and Fantom will seek to roll out the product nationwide in accordance with the sandbox regulations of the National Bank of Tajikistan.
The Fantom solution dramatically reduces costs by eliminating middlemen and transaction fees while speeding up payment processing. The functionality added by the aforementioned Iron Bank protocol makes it easy for senders and recipients of remittances to work with local currencies. Other perks that Fantom offers include automatic tax deduction, streamlined monetary policy, and more.
From interbank and large business payment systems to small business transactions and P2P money transfers, Fantom CBDC is poised to transform the existing monetary and payment ecosystems in Tajikistan and beyond.