As it happens with many products, the inspiration for ioCash came from our own needs as blockchain products developers. In the process of creating different enterprise blockchain products and use cases, we encountered the need time and time again to be able to use and interact with payments (regulated) directly from blockchain, but the only option available at the time was dubious stable coins (Tether, etc) which did not meet our security and regulatory criteria (also, no Euro stable coins existed at the time). This made us realize that there was a real need in the market to be able to perform payments with real regulated money on blockchain, and that there was a lot of value that blockchain technology could bring to traditional electronic money systems (traceability, programmability, interoperability, etc). This realization made us really excited and it was the starting point for ioCash.
What it does
ioCash is a fintech platform that enables the use of regulated electronic money on blockchain. It enables the use and interaction with payments directly from blockchain, making regulated money programmable and interoperable with Smart Contracts, while providing a lot of advantages to the use of money as well (improved traceability, functionality, interoperability). One of the main “killer features” is that ioCash makes regulated on-chain atomic Delivery-Versus-Payment transactions against other digital assets a reality.
ioCash connects real world electronic money accounts to ethereum addresses, automatically tokenizing balances and taking the electronic money ledger directly into blockchain. User accounts in ioCash have an unique ethereum address, as well as an independent unique IBAN in the banking system. Accounts can be funded through SEPA transfer or credit card, and are able to send SEPA transfers to any traditional european bank account, as well as sending funds to other ioCash accounts through API or directly through blockchain transactions. The system is regulated and compliant with KYC/AML regulations - all users that want to open an account must pass a KYC, and transactions are monitored and go through AML proceeds; users can only send funds to whitelisted accounts or to bank accounts.
ioCash core functionalities include:
- Electronic money accounts with independent IBAN and Ethereum address
- Account top-up via SEPA transfer and credit card
- P2P instant payments on blockchain between ioCash accounts
- SEPA transfers to external bank accounts
- Secure payments and escrows without a third party
- Cross-chain value transfers
- Embedded on-chain compliance rules
- Programmability and connectivity with Smart Contracts
- Interactions via API or via blockchain
How we built it
- We partnered with an Electronic Money entity in Spain, in order to be able work with regulated money.
- We co-created an specific Token Standard (ERC-2020) for the specific use of Electronic Money on blockchain, adding money-like functionalities to the Smart Contract (fundable, holdable, compliance, etc)
- We deployed a permissioned private network based on Hyperledger Besu for our internal use cases. We also deployed our nodes and Smart Contracts into permissioned consortium networks (Alastria, LacChain, etc) and public networks for use with client applications.
- We created the application (ioCash) that connects the electronic money entity (via API) systems to blockchain (ethereum), automating the tokenization/de-tokenization of money, adding on-chain compliance rules and management tools, and built added-value functionalities (such as escrows without third parties, automation and programmability) to the solution.
- We created testing and production environments, and incorporated API management tools. We created a mobile demo application (Ourion) as an example use case of ioCash applied to a neo-bank wallet.
- We created the product website and developer portal, containing all the documentation and sandbox for developers to test out the solution.
Challenges we ran into
- Current token standards were too limited for the use of real money on blockchain, so we had to create our token standard (ERC2020) and our own set of smart contracts.
- Making sure to abide by compliance regulations in all operations. This meant introducing on-chain checks and rate limits, and in some cases introducing off-chain validations (AML etc) for certain over-threshold transactions.
- Incorporating all the monitoring and conciliation tools necessary for this type of operations
- Making data access easy and fast, especially for large volumes of data (movements, etc). This meant building collecting and mirroring data on blockchain on the centralized systems for easy access through API.
Accomplishments that we're proud of
- The creation of a new token standard (ERC2020) for the use of digital money on ethereum-based blockchains that is being widely accepted as a reference for using regulated money on-chain and has been discussed on the EEA, ITU, etc.
- Being the first licenced and regulated electronic money Euro on blockchain in the European Union (and still one of the few solutions), a regulated alternative to stable coins
- The implementation of secure payments/escrow without third parties based on holds on origin and destination wallets and notary triggers.
- The implementation of cross-ledger value transfers with HTL.
What we learned
- Current blockchain implementations have a long way to go to adapt to current regulations (or the other way around)
- Blockchain brings many benefits to the operations with money and payments, such as traceability, added functionalities, programmability and improved connectivity/interoperability. We are more convinced than ever that the future of payments is in blockchain.
- The whole financial market is adopting blockchain technology, and assets are becoming digitized. A digital regulated cash Being able to perform regulated atomic DVP transactions
What's next for ioCash
- Integration and application on more real world production use cases
- Expansion into other regions and currencies
- Incorporating more functionalities such as payment initiation, linked debit card, etc
- Adding support for other blockchain technologies