One under the radar cryptocurrency-powered payment app that's been gaining traction across Latin America is Reserve. The platform acts as a conveni
One under the radar cryptocurrency-powered payment app that’s been gaining traction across Latin America is Reserve. The platform acts as a convenient way for people to convert their local currencies, which may be undergoing high inflation levels, to the United States Dollar via the Reserve stablecoin (RSV). The network also features the Reserve Rights token (RSR), which is used for protocol governance.
Since its launch in March 2021, the platform says it has seen 367,000 total signups. Meanwhile the number of weekly active users has surpassed 100,000, with most located in Argentina, Venezuela, and Colombia. In the past 30 days, the app has handled approximately 547,000 transactions. In addition, over 8,000 businesses, predominantly based in Venezuela, now accept Reserve as a payment method for goods and services.
2/11 Let’s start by taking a look at the growth in customers.
Our customer base often grew faster than our systems at that time could handle, causing us to have to implement the invite-only system.
Despite that, we’re proud of the adoption numbers that we’ve achieved so far ⬇️ pic.twitter.com/E5wsxjNSdD
— Reserve (@reserveprotocol) October 25, 2021
In a live demonstration of the Reserve app to Cointelegraph, Reserve CEO Nevin Freeman withdrew dollars from a USD bank account into a Venezuelan bolívares bank account with RSV acting as the intermediary. The transaction was near-instantaneous, and the app does not charge any fees. Freeman claimed that users could immediately spend the bolívares, such as in online transactions, or swipe one’s debit/credit cards to use the cash. However, liquidity providers, which are vetted by Reserve, charge a spread on the initial foreign exchange transaction. Below is the full interview between Cointelegraph, Freeman, and Reserve’s community manager Yens Michiels.
Cointelegraph: With the rise of the blockchain industry, there are numerous crypto-to-crypto and crypto-to-fiat money payment solutions out there. In your view, what makes the Reserve protocol unique?
Nevin Freeman: The Reserve app is a cloud-custody stablecoin wallet. We hold the crypto in the background, and users transact on our database. We will switch to users transacting on-chain in the future, but because of [high] Ethereum gas fees, this way the only way we could offer this use case in countries like Venezuela. In answer to your question of what makes it different, it’s the ability to deposit and withdraw with all these different currencies. These top five [options in the app] are different Venezuelan bank methods to deposit or withdraw; Argentine pesos, dollars in Panama, PayPal, Zelle, Uphold, Colombian Pesos, our token [RSV] on-chain, and a bunch of other crypto options that people use. We’ve also recently added Axie Infinity tokens, as many people in Venezuela play Axie Infinity. So it’s an easy way to get that money into dollars.
CT: How is the Reserve app helping customers protect against inflation in the aforementioned countries?
NF: It’s a really common practice for Reserve app users to get paid and convert their money into our dollar stablecoin so that they don’t have to worry about the devaluation of their money. And then, throughout the week or the month, they will periodically make small transactions back into the local currency to transact with the local economy. And then, increasingly, because of the growing number of merchants, we are seeing more and more transactions where people don’t have to convert back; they can just pay directly in U.S. dollar stablecoins.
So it’s not really rocket science. The concept is very basic. It’s just, like, save in dollars and live your life in dollars, which is something a lot of people want to do, but the change here is making that [task] significantly easier to do and more accessible.
Let me add one more interesting point here: In Venezuela, for example, a lot of transactions happen via Zelle, which is like the U.S. banking way to send money quickly between U.S. bank accounts. The 1% in Venezuela all have American bank accounts, and they all have a lot of their money in their American bank accounts. So there are a lot of transactions happening back and forth with Zelle. So everyone in Venezuela would love to have a Zelle account. The thing is that you can’t get a Zelle account unless you fly to the U.S. and create an account physically in the United States. And a lot of Venezuelans don’t have the opportunity to do that. So the way that a lot of our users perceive the service is like, oh, it’s like a Zelle account, but anyone can open one, so that’s part of the appeal.
CT: Up until now, we’ve been primarily discussing RSV and fiat money. But what about the RSR token? What are your development plans on that?
NF: The primary role of the Reserve Rights token is governance. The basket that backs any R-token, which is our name for Reserve stablecoins, will have to evolve over time. And you need a very secure and robust method for handling that evolution…
cointelegraph.com