Pakistan is launching its first-ever blockchain remittance service in Malaysia, which it developed with help from Alipay, the online payment platform serving Chinese tech giant Alibaba.
It also marks Malaysia’s first foray into using blockchain for international remittance.
The service, which was unveiled on Tuesday (Jan 15) in Islamabad, will “significantly boost the speed and efficiency of remittances” from Malaysia to Pakistan, fintech company Valyou said in a statement.
It is offered by Telenor Microfinance Bank’s Easypaisa, in partnership with Valyou Malaysia.
The service is available 24-7 and offers users instant money transfers at a “competitive” exchange rate, while reducing the fees typically charged by traditional remittance methods.
While it does charge transaction fees, Alipay said it would waive these fees for a one year trial period.
The blockchain platform will also be “encrypted with advanced protocols in order to protect users’ privacy,” Valyou said, adding that it will also let senders and receivers track their money during the process.
Valyou chairman Roar Bjaerum said that Pakistan currently receives about US$1 billion (4.1 billion ringgit) in remittances from Malaysia, and the new service will “redefine international money transfers” for the country.
Pakistan’s state bank governor, Tariq Bajwa, added that remittances – which totalled around US$20 billion per year – comprise over 6 per cent of Pakistan’s GDP, which is equivalent to over one-third of the country’s imports between 2017 and 2018.
“International remittances are important from the perspective of overall macroeconomic stability,” he said, adding that they also had a “positive spillover” effect in improving the lives of millions of families.
As one of the “very few” countries in the world with blockchain-based international remittance, the new service would put Pakistan on the map, he added.