答5：跨境支付是Qitmeer底层网络能够支撑的这种功能，跨境支付有两种场景可以实现，首先，如果跨境支付是要用稳定币来做，要换成法币有两种方式，一种是用户把合规稳定币转到合规交易平台再转换成法币；还有就是币圈常用的点对点OTC支付，如果都是在Qitmeer网络上基于底层网络发行的合规稳定币进行支付的，那消耗的GAS都是MEER。其次。如果是不同的稳定币之间进行兑换又没有中心化的系统来做支撑，那就是现在做的MEER DeFi，或者说，将来的MEER EVM上线之后会在去中心化交易平台或在Swap提供稳定币之间的相互转换功能，也就是现在MEER DeFi生态中的一种应用场景就是稳定币之间通过DApp或通过智能合约来实现各种链上的互换 (EVM平台集成之后就能实现的功能)。现在的MEER DeFi只是MEER EVM生态开始的一个小小的尝试，在MEER EVM集成之后将会衍生出各种去中心化功能的应用，就包括了刚才提的跨境支付里不同稳定币之间在Swap的转换。
Today, I will talk about why Qitmeer is doing a cross-border payment system. The technology that is familiar to me and the exploration of commercial applications will be shared with you and in the process, I hope you will have a deeper understanding of the Qitmeer network, as well as to let the users be more involved in the Qitmeer network, whether from the side of arithmetic, liquidity mining, commercial applications, DApps, or future development, can be helpful.
Blockchain Network Basics
Before talking about cross-border payment, let us first review the basics of the blockchain network. The public chain network is a distributed ledger system, its biggest feature is that everyone is in the same ledger, using the same system to keep accounts, high-efficiency rate, low cost of synchronization, security and to be non-tamperable, this distributed ledger technology is very suitable for use inside the financial system, it has two places that are just necessary for blockchain, public chain or crypto digital currency, it doesn’t matter if it is in the current public chain, alliance chain, private chain, or others.
However, in the track of public chains, I think payment is still the high demand or the real application value of blockchain. Qitmeer’s team has been exploring in which scenarios the public chain network is just needed. After several years of exploration, Qitmeer believes that the public chain networks and cryptocurrencies are in demand in two local scenarios.
First, in countries and regions where financial infrastructure is not yet developed, compliant stable coins issued based on public chains or high-performance public chain systems can be used for micro-payments to solve financial reserve, and such systems with public chains can greatly reduce the cost and improve the efficiency of clearing, so public chain systems are needed in such scenarios.
Secondly, in the field of cross-border settlement or cross-border payment, why? Because the traditional cross-border settlement or cross-border payment is the first layer of settlement between different countries, different currencies, different regions and different levels, and finally cleared by the central bank or two central banks. If it is a domestic payment method, the whole path of payment settlement and clearing is initiated from the payment instrument, then the settlement by commercial banks and then to the central bank clearing system. If it is a cross-border payment method, it reaches the level of the central bank clearing system, which is only the central bank of the region or the country but also needs to go through the foreign exchange bureau to the central bank of another country or the central bank clearing center. (For example, with a traditional payment system or Western Union, the process is for a user in Shenzhen to go from his remitting bank to the Foreign Exchange Bureau, through Swift’s system to the Federal Reserve for review, through an intermediary bank, and then to the user in Hong Kong. If you switch to another payment system, the process is not as complicated and you only need to transfer from a compliant and stable address of the Shenzhen user to the user’s address in Hong Kong or London.
[Cryptographic digital currency is transferred from this address to another address, and then after 51% of the nodes in the whole blockchain network synchronize this information well or record this information, the transfer and clearing work is finished]. It is because the blockchain system or public chain system can greatly improve efficiency and reduce cost in the process of cross-border payment so the public chain system has great value in this scenario, and it is a powerful attraction to enterprises and financial institutions of cross-border trade and cross-border payment, as long as the network chosen is safe and powerful enough.
Blockchain World Stable Coin Market
At present, the most used inside the blockchain industry to do payments is Ripple, although, Ripple this network is very centralized. But it has been developing cross-border payments and cross-border remittances to a certain extent; there is also the well-known USDT that has issued nearly eighty billion; USDC has issued three or four hundred billion.
The entire USD stable coin market adds up to a quantity of only one hundred and forty-five billion, but the trading volume far exceeds that of two coins USDT, not to mention BUSD and other USDs. The annual trading volume of USD stablecoins exceeded ten trillion long ago, and most of these stablecoin transfer payments are used in fiat and digital currency transactions but have gradually started to be derived from cryptocurrency transactions into the trade circle. Many users in the cryptocurrency community are now using stablecoins for settlement when transferring money to cross-border payments, overseas colleagues’/clients, and suppliers. If your friend in the U.S. can now accept a transfer in stablecoin, as soon as the transfer is made and the transfer is synchronized and confirmed by broadcast on the network used, the transfer and list clearing are over. If you want to use a traditional bank transfer, you will first run to your bank and ask for money, take the remittance slip, get approved by the Foreign Exchange Bureau, go to Swift’s international remittance system, get audited by the Federal Reserve, then go through the bank, and then be audited by your friend’s bank’s head office to the branch to his account, this is only the transfer, the clearing work may require the head office of the bank you sent the money from, as well as the clearing center of the People’s Bank of China and other countries It may take a year to complete this transfer and clearing work. It is because the public chain network or the public chain system based on a P2P network or distributed network can be used for cross-border settlement and cross-border trade payment, and the efficiency or the reduction of cost and the improvement of efficiency generated by this payment method is very huge. A simple calculation was done, again, $100 million at $10,000 per transaction.
International remittance cross-border settlement remittance, in the traditional Swift system fees, is at least a million dollars, the time limit is about a few hours to 8 working days transfer to the account, the whole settlement cycle will be complete for approximately a year (because the clearing reconciliation between the two central banks is generally only once a year)
Bitcoin network: cost consumption is roughly $100,000 — $1 million, estimated, 720 minutes
Ethereum network: cost consumption of about 100,000 dollars is as fast as 20 minutes.
Qitmeer network: costing approximately $400, with each transfer and clearing being completed in about 3 minutes or less
Using the above three digital currencies for transferring money is faster and cheaper than the traditional Swift system, especially using the Qitmeer network for transferring money, the speed is in seconds, the process takes about three minutes for the whole network to confirm the transfer, from here we can analyze the advantages of Qitmeer positioning to develop the market of cross-border payment
Theoretically speaking, any cryptocurrency that has the function of transferring funds also has the function of payment and the function of cross-border payment. However, the cross-border payment made by Qitmeer network does not require taking MEER’s local currency to make cross-border payment but issuing compliant and regulated stable coins based on Qitmeer’s high-performance network, and then using it as a cross-border trade settlement, as cross-border labor remittance, bridge remittance or as a cross-border donation for public welfare to make trade settlement, this is what Qitmeer tries and strives to pursue. Qitmeer aims to solve the problems of the traditional payment system by reducing costs and improving efficiency. Only then this network can be demanded by everyone, and the value can be highlighted and will continue to survive and develop.
So why is Qitmeer positioning itself in this market of cross-border payments? Looking at the global cross-border trade settlement scale inside the China Enterprise Development Report: roughly $2.81 trillion in 2018, roughly $3.7 trillion in ’19, and roughly $12.7 trillion in 2020. In comparison, the scale of China’s cross-border trade with foreign countries: about RMB 4.62 trillion in 2018, about RMB 31.54 trillion in 2019, and about RMB 32.16 trillion in 2020. At present, the world’s cross-border trade settlement on such a large scale mainly relies on Swift, a cross-border settlement system, and the fee for each payment between China and Europe and the United States ranges from about 10 to 15 U.S. dollars (remittance of 100 U.S. dollars has a fee of 10–15 U.S. dollars), and if it is used for Western Union or Swift between China and Africa, Africa and Europe, the highest fee may reach 12%, 13%, so, large-scale cross-border trade settlement can use Qitmeer compliant stable coin for trade settlement, cross-border payment, that will be a very huge market, at the same time, the amount of these trade can drive the growth of business in the Qitmeer network. By using this, bottom miners are incentivized which attracts more miners for the Qitmer Network, more miners mean more arithmetic power that will make the network more stable. The cross-border trade market and cross-border trade settlement market are very large, and countries are also trying to improve or explore new channels for Swift and Western Union’s cross-border settlement system because of the high cost and low efficiency of the Swift system.
One of the advantages of using a blockchain network is less reliance on the swift banking system. Russia and other countries sanctioned by the western powers have seen a blow on their economies by banning them on the swift banking system, this prohibits them to do cross border payments and other international trades, the result? Economic problems.
We can compare the birth of the USDT stable coin way back in 2017, the earliest blockchain to be used was the Bitcoin network’s Omni protocol (Omni-USDT), because of Bitcoin’s high fees and slow speed, USDT issued on the Ethereum network (ERC20-USDT) gained popularity from the end of 2018, users then gradually began to accept TRC20 -Then, in 2020, because of the development of DeFi, market users began to use various networks of USDT (BSC-USDT mainly), then in the environment of the continuous derivation of various stable coins, users are seeking lower costs and relatively faster transaction speed. In the case of USDT, for example, the user has to deduct more than 10 USDT for ERC20 USDT in the trading platform, and 0.8–1.6 USDT for TRC20 USDT. The fee for transferring USDT to each other at the wallet side will be lower (because the real USDT transfer in different networks mainly consumes the underlying main network’s Gas, so if USDT is sent on the Qitmeer network, the fee consumed will be lower. The security of TRC20-USDT and BSC-USDT is higher, because under TRC20 is the TRON network, and under BSC-USDT is the Dpos network of the Binance smart chain, and the common feature of these two networks is the use of supernode. The consensus mechanism of Super Dpos is faster than the full node PoW network and Ether, but it is no longer decentralized, it has become centralized, and in theory it can be controlled and double spent by the trading platform it is based on or by the foundation of the genus, so at present, a large number of USDTs are still running on the full node network of Ether, the PoW.
Tether does not issue all USDT amounts in TRC20 or BSC, or because the underlying network of TRC20 and BSC-USDT is not decentralized enough. Tether still chooses a relatively distributed issuance, and will not issue all in the same underlying network, if there is a fully decentralized underlying network in the market, which can guarantee network security, speed and low cost, I believe Tether will choose that network and users will also vote with their “feet”. Imagine if 1/10 or 1% of the annual trade settlement of more than 10 trillion RMB in international trade and 30 million RMB in foreign trade with China could be settled with a compliant stable currency, what would be the volume? Therefore, Qitmeer has a technical network that can support the operation of compliant stablecoins, and then we will continue to seek more business partners to promote the Qitmeer network, so that more compliant stablecoins can be issued on the Qitmeer network for testing and operation, and when e-commercial application development starts to land, various compliant stablecoins are attracted to operate and will be deployed in this network.
At the same time, the scale of this track of compliant stablecoins is already growing. The US Office of the Comptroller of the Currency (OCC) issued a clear regulatory policy on compliant stablecoins in November 2021: “That is, the issuer must first get a stablecoin license in the country where it is located, and at the same time accept the supervision of the financial regulator in the country where it is located, and the issuer must provide a full margin in the bank to issue stablecoins.”
But stablecoin issuance and stablecoin trading volume are completely different. For example, the current global stablecoin I mentioned earlier is mainly USDT, and the compliant stablecoin is USDC. USDT is currently a mystery for this reserve, which is still unknown to everyone, but the consensus and scale of USDT are much larger than USDC, and the total combined issuance of both is about 140 billion USDT, but the trading volume of these two stablecoins has already exceeded ten trillion dollars of trading volume. If these stable coins continue to develop with the global trade and the underlying blockchain technology, I think that, comprehensive last year to this year plus the demand of DeFi, the scale of this track of stable coins will continue to increase, at the same time, the stable coins to traditional trade penetration, traditional trade cross-border settlement and global cross-border e-commerce settlement of stable coins demand will further increase and will stimulate to the development of the stable coin market, so, if Therefore, if the compliance stable coin is to be safe, efficient and low-cost operation will certainly have high requirements for an underlying network, and can be used on such a network is a real trade settlement enterprise to reduce the actual cost, then why not use it?
Qitmeer is positioned for cross-border payments because it is optimistic about the track of compliant stable coins and the volume of cross-border trade. As long as they comply with the Qitmeer network’s issuance rules and are subject to local regulation, they can be used for cross-border trade settlement, cross-border e-commerce settlement, use of DeFi eco-liquidity on EVM, and conversion between cryptocurrencies and fiat currencies. However, the Qitmeer team cannot predict which organizations will come in and participate. All they can do is to make the underlying network more secure and decentralized so that issuers of these stablecoins can participate on the network at lower cost and higher efficiency, and at the same time, attract more commercial organizations and countries with less developed financial infrastructure to issue such compliant stablecoins and operate on the Qitmeer network.
This is only the first step in the exploration of business development cooperation, and there will be a large number of local organizations that have already obtained a stable coin license to issue compliant stablecoins on the Qitmeer network, one after another. At present, Qitmeer Foundation has already been in discussion with the stable coin licensees in Indonesia, Malaysia, Bangladesh, Bahrain, Nigeria and other countries and regions, and some of them will come to the Qitmeer network for testing and will show the test data when they are ready to issue. All Qitmeer community members will see this information. People won’t necessarily be able to use these coins, but they will be able to see more tier 2 tokens being issued and more Gas being consumed from the browser’s transaction data. Such stable coins are continuously applied to the actual trade settlement and will be used in the future DeFi ecosystem of the Qitmeer network EVM, the value of the network can be verified and demonstrated, which in turn attracts more institutions to the Qitmeer network, driving the demand for the underlying coin of the network and increasing its value.
Commercial organizations are welcome to do various DApp applications on the Qitmeer network, especially stable coins, whether they are algorithmic stable coins or fiat stable coins, digital asset-backed stable coins. At the same time, the more these stable coins are used in the actual trade settlement, the more they can reduce the cost of traditional trade settlement. As Qitmeer’s underlying network continues to grow and develop, the integration of the second layer EVM and the continued strong development of the DeFi ecosystem, the Qitmeer network will gradually bring into play its security and decentralized superiority in cross-border trade and combined with the high performance and low fees of the second layer token transfer that can drive the application of the Qitmeer network in cross-border trade. This is the commercial and technical advantage of Qitmeer in choosing to do the cross-border payment.
Definitely, because the network is already integrating EVM, probably in the first half of 2022. There are two ways to issue stable coins, one is based on Qitmeer’s MEER UTXO transformation, and the other is based on smart contracts, both will be issued by institutions, Qitmeer Foundation will publicize the specific information.
Pricing still depends on what it is anchored to be a stablecoin, for example, anchored to fiat stablecoin, that depends on whether it is initially anchored to the US dollar, euro, Canadian dollar, naira, or which fiat currency to develop. Currently, there are three main types of global stablecoins: one is the stable coin anchored to fiat currency, which currently accounts for 90 percent of the entire stablecoin market, whether it is USDT, USDC at the beginning is anchored to the US dollar. The second kind is the over-collateralized digital asset coin, which is the coin generated by the issuer who collateralized a certain amount of digital assets; the third kind is the algorithmic coin, which mainly relies on the consensus algorithm to regulate the quantity of the coin and ensure the stability of the coin.
The two stablecoin projects, Nigeria’s Naira stablecoin and China’s Russian Chamber of Commerce, are both carried out under the supervision of the central bank and the bilateral cooperation agreement has been signed and the technical framework has been done. The Nigerian stable coin will have two companies to do this business under the authorization of their central bank, and one of them has already got the license of the naira stable coin. The application of the stablecoin will be piloted on the cross-border e-commerce platform of both sides first, and the first business can be opened probably in March 2022. At the same time, the Central Bank of Nigeria is also working with the People’s Bank of China on a central bank digital currency swap, and the Qitmeer Foundation has been working on the interface, the two sides have already had their first meeting.
Recently, the application system was made for Wa. It was supposed to be signed with Wa Bank in Kunming before the Chinese Lunar New Year, but because of the epidemic, in the near future, the two sides will organize an online cloud signing, and it is likely to be sent to the community after the recording, the development of the product has entered the internal testing stage, and according to the progress, it should be delivered to Wa Bank by the end of February 2022.
The application of DApp is similar to WeChat, but it is not as comprehensive as WeChat’s function, after all, WeChat also has many years of maintenance operation, the application can meet the users’ basic needs of chatting and transferring money.
Cross-border payment is such a function that Qitmeer’s underlying network can support. Two scenarios can be realized for cross-border payment. Firstly, if cross-border payment is to be made with stable coin, there are two ways to convert it into fiat currency, one is for users to transfer the compliant stablecoin to the compliant trading platform and then convert it into fiat currency; there is also the peer-to-peer OTC payment commonly used in the cryptocurrency circle. If all the payments are made on the Qitmeer network based on the compliant stable coin issued by the underlying network, the GAS consumed will be MEER. second. If there is no centralized system to support the exchange between different stablecoins, it is MEER DeFi, or the future MEER EVM that will provide mutual conversion between stablecoins in the decentralized trading platform or Swap after the launch, which is one of the application scenarios in the MEER DeFi ecosystem. The MEER DeFi is just a small attempt to start the MEER EVM ecosystem. After the MEER EVM integration, various decentralized applications will be derived, including the Swap conversion between different stable coins in the cross-border payments mentioned earlier.
The stable coins that are commonly used around the world are fiat collateralized stable coins (USDT, USDC) and digital currency collateralized generated stable coins, an emerging play now in DeFi universalization, which is an algorithmic stable coin or synthetic asset stable coin. For example, the issuer can use a certain amount of MEER plus a certain amount of USDC (USDT), or they can directly mint a stablecoin with MEER, no matter which of the two methods is used, it is the way of on-chain contract, instead of being able to pledge its assets to a centralized institution, it must be pledged on the chain by way of contract, and through the prophecy machine, when the crypto assets of the issuer reach a certain amount of volatility, it may be forced to close its position, and if it wants to continue to pledge, it has to add additional pledged assets, and this way of pledging is completely controlled by the contract and free of human intervention.