Jun Hasegawa, founder and CEO of Omise Holdings’, a Southeast Asian payments provider visited the Cayman Islands in April to explore opportunities to expand the company’s operations.
As the sixth largest financial center in the world, Cayman is potentially an attractive jurisdiction for fintech companies such as Omise, which started as a traditional online and offline payment gateway in Thailand, Japan and Singapore, and is now building a blockchain-based payment network.
Speaking after his keynote address at GAIMOps Cayman on 29 April, Hasegawa told The Journal that the original idea for blockchain payments stemmed from the difficulties Omise experienced in building the connectivity between financial institutions and its own system. The siloed Southeast Asian banks were simply not moving fast enough.
Omise first considered bitcoin as an alternative. But because bitcoin’s functionality is limited to sending currency from point A to point B, the company became involved in Ethereum to eventually build its Ethereum-based OmiseGO (OMG) network.
“We thought about covering institutions but also the underbanked,” who do not have access to basic financial services such as savings, lending or basic payment methods and who represent 73% of the population in South East Asia, Hasegawa said. “Our company mission is payments for everyone. The answer to that is the blockchain.”
The appetite for blockchain-based solutions in Asia is great because it avoids having to build on top of the existing, hampered banking technology.
Omise says its OMG network is a decentralised public network that can bridge legacy financial systems with blockchain technology to help alleviate performance problems, remove friction and ease capital flow bottlenecks.
“We want to help institutions but also empower the unbanked population with an open financial system to improve quality of life and give more people the opportunity to invest. That is the opportunity we see here in Cayman,” Hasegawa said.
“While on-island, we learned a lot about the local ecosystem, and we were blown away by the island’s calibre of service providers and robust regulatory and compliance framework. We are keen to work with the jurisdiction to set-up a fully-compliant infrastructure that meets Cayman’s globally-recognised compliance standards to support our business objectives.”
OmiseGO is building a global platform for open financial services, which aims to enable transparent, peer-to-peer transactions in real-time and facilitate self-sovereign financial services across geographies, asset classes and applications.
The team also works with companies to form its payment and eWallet strategy, co-create new products and provides consulting services and implementation support. These developments promise to streamline processes like know-your-customer (KYC) and directorship services.
For example, instead of physically stamping the document copy, a notary can use a private key to digitally sign the document and use the intended service provider’s public key to secure and encrypt the document. The intended service provider can then use its private key to decrypt the document while also using the notary’s public key to identify and authenticate that the notary was the true originator of that action.
The company recently incorporated in Malta with the aim of launching its retail digital assets exchange business GO.Exchange from there.
The OMG network is currently undergoing alpha testing and several applications have started to build on top of the network, Hasegawa said. “So, we hope to launch our main network very soon, this year.”
Currently the scaling of the solutions, building the infrastructure and regulation are the main obstacles to a wider adoption of blockchain payments. Omise is working with regulators and governments around the world to help ensure that they are aligned with global regulations. However, Hasegawa said, these barriers will be overcome as the infrastructure continues to scale up.
While offshore centres like Bermuda have taken on the blockchain space with much fanfare and new legislation, Cayman has taken a more measured approach.
So far Cayman is known as a major hub for crypto funds and initial coin offerings, but Hasegawa believes it also has the potential to be an operational base for fintech businesses.
Asked whether Cayman was too late to court blockchain technology companies, the Omise Holdings CEO said: “It is never too late because the blockchain space is only just starting to implement the first solutions. Jurisdictions have a good reason to observe but that does not mean they are late.”
Two years ago, blockchain solutions were unknown in Omise’s home jurisdiction of Thailand. Today the stock exchange is starting to use blockchain on the security side and with cryptocurrency exchanges, Hasegawa said. “In less than two years they are ahead of other jurisdictions in the region. I feel that Cayman has a lot of potential to emulate that.”