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Virtual money is a concept less than wholeheartedly embraced by nation states, not least of all because it circumvents central banks. Recently, UK and Belgian regulators have issued warnings associated with virtual money, and singled out one virtual currency in particular, OneCoin, warning consumers that they will get no protection for their investments.
BNamericas spoke to Ruja Ignatova, CEO and founder of virtual money platform OneCoin, about the advantages of cryptocurrencies, and the company's plans to target Latin American migrant workers with its OneLife network.
BNamericas: Virtual money seems to be a poorly understood idea. What advantages does this alternative provide?
Ignatova: Virtual money allows people to set up means of value exchange independent of both banks and the state. That means that virtual money, or cryptocurrencies, challenge the traditional way money is issued and backed up, therefore rivaling fiat money issued by central banks.
This comes at a time when the state and central banks have lost credibility in their ability to manage fiat money due to the 2008 financial collapse.
In terms of innovation, cryptocurrencies have the potential to impact various aspects of the financial markets and the wider economy by dramatically reducing transaction costs and avoiding pitfalls in certain monetary systems.
Cryptocurrencies challenge the status quo and also offer a viable alternative because they are not affected by inflation and are impossible to counterfeit. However, as an innovative concept based on the blockchain technology, there are risks associated with their safety, as evidenced by the many examples given about Bitcoin in the media.
BNamericas: What makes OneCoin different to other digital currencies?
Ignatova: The main difference between OneCoin and Bitcoin or other altcoins is its centralized business model, which allows the company to take care of the servers and the safety of the coins.
While traditional cryptocurrencies have an open-source code, which allows anyone to mine the coin, OneCoin requires user information through a know-your-customer procedure, which makes it a lot safer and does not allow anonymous transactions.
Another element that sets OneCoin apart from its competitors is the blockchain, a key tool in tracking and tracing value. The OneCoin blockchain is based on protocols that authenticate, validate and store information in consistent, unbroken sequences that make the system safer by eliminating any attempts of fraud, duplicity, and forgery. In fact, it allows for more potential transactions than major credit card providers.
In addition, OneCoin is the first cryptocurrency company in the industry to introduce a monthly audit of its blockchain. All OneCoin blockchain audit reports have proven that the OneCoin blockchain is consistent and that the number of mined coins is genuine.
BNamericas: What challenges do you find in you goal of making OneCoin the most solid cryptocurrency in the world?
Ignatova: From a reputation perspective, we are rising to the challenge of operating in a highly competitive industry, where there are numerous attempts at discrediting our work. We are confident our cryptocurrency and the corresponding ecosystem around it has what it takes to lead OneCoin to the top.
By launching our new blockchain this month, we made it clear that we are technologically prepared for future-proof mass transactions and will soon start working with merchants.
BNamericas: How does OneCoin respond to accusations that its business model is similar to a pyramid scheme?
Ignatova: OneCoin has achieved impressive growth over a two-year span, which sparked unrest among leading companies in the industry. One of OneCoin's major competitors has also started a full-scale attack on the company.
Keep in mind that companies offering cryptocurrencies have been around for less than a decade. Today there are over 700 cryptocurrencies worldwide and experts say only three in five of those will succeed. These predictions spark anxiety among leading companies struggling to survive.
OneCoin has already proven that a cryptocurrency can grow quickly and be successful, and those who feel threatened start acting against it.
Leaving aside the image war being waged against our company, we believe we are making steps in the right direction. Just like our competitors, we have the technology, but that is not enough to succeed in the long term. We are confident we will succeed in the long term because we are good at doing business.
OneCoin relies heavily on transparency, usability, and credibility to keep the value of the coin stable. That is why there are hundreds of people joining our company every day.
BNamericas: How does OneCoin plan to approach the Latin American market, and which countries in the region look the most promising at the moment?
Ignatova: Every region OneCoin has entered so far presented unique challenges and specific conditions, and Latin America is no exception.
Cryptocurrencies in general, and OneCoin in particular, offer the option to transfer funds at a low cost. Remittances sent to Latin America and the Caribbean last year was slightly under US$70bn, and that amount is expected grow. We believe that OneCoin can offer migrant workers a cheaper option when they make transfers to support their families.
We noticed that Latin American immigrants pay attention to exchange rates when they consider how and when to send money home. That is where our OneLife exchange can prove exceptionally beneficial for them.
We have approached Latin American countries, inviting people to join OneLife, a concept that gives them the opportunity to use the OneCoin cryptocurrency and also have a personal business that allows them to earn money from bonuses and commissions based on sales.
The OneLife network currently has 2.5mn members worldwide and our goal is to reach 10mn over the next two years, 25% of which will be from Latin America.
BNamericas: What are some of the cross-industry opportunities OneCoin is assessing?
Ignatova: In a little over two years the company has transformed its initial business model. Today the OneCoin ecosystem consists of the cryptocurrency company OneCoin, the direct sales company OneLife, the education-oriented OneAcademy, the charity OneWorld Foundation, and a number of other products and services. Since its launch, OneCoin was never bound to a single industry.
In an environment characterized by advanced technologies, connectivity solutions, and value-laden emerging markets, industry boundaries are not as clear as they used to be, especially when it comes to innovative and young industries. We see opportunities for our company in e-commerce, innovations related to payment infrastructure, and value transfer systems, which we currently find quite inadequate.
About Ruja Ignatova
Prior to founding OneCoin, Ruja Ignatova was an associate partner at McKinsey & Company and led one of the largest asset management funds in Bulgaria, CSIF.
Ignatova holds a PhD in law from the University of Konstanz.
About the company
OneCoin is a cryptocurrency company with offices in Europe and Asia, and key markets in Europe, Southeast Asia, Africa, and Latin America. OneCoin is also the name of its digital currency, which uses cryptography and a process called mining.