Terra, a blockchain company building the next-generation payment system, today announced a partnership with Mongolia’s capital city of Ulaanbaatar, to launch instant money transfer and lending services.
Terra’s payment solution will first launch in Ulaanbaatar City’s Nalaikh District through a pilot programme, with plans to expand citywide. The programme is set to launch within the next six months.
Mongolia’s fintech market is still in its early stages, but has recently experienced a series of successful IPOs from local startups that display the market’s rising potential. As a reaction to this success, the Mongolian government has implemented progressive regulations that intend to facilitate the growth of startups and fintech, such as the Central Bank of Mongolia approving the launch of its first national digital currency license.
With the support of the government, Terra aims to simplify and secure the payment process with the click of a button, and provide other financial services such as fast and low-cost remittance and lending.
The partnership aims to reform the largely cash-based infrastructure of Mongolia by enabling more transparent and convenient digital payments. The pilot programme in Nalaikh City will launch with two main features: peer-to-peer (P2P) payments to allow instant transfer among users of different banks, and mobile payments to build the infrastructure for secure, contactless payments. As an immediate next step, Terra will work with local government to replace the payment method of utility bills and government subsidies with its stablecoin.
“Facilitating P2P and recurring utility payments with Terra are important first steps towards building a blockchain-based financial infrastructure in Mongolia,” said Daniel Shin, Co-founder of Terra. “From there, we will build out a wider range of financial services, reforming the remittance, loan, and overall banking industry.”
“We believe this pilot programme with Terra will reform how the people of Nalaikh City make everyday payments. It will contribute to the development and enrichment of the nation’s digital payment infrastructure, while creating a new online platform to easily share information and offering great opportunities to connect with our citizens through advanced technology,” said Radnaabazar Choijinsambuu, Governor, Nalaikh District of the Capital City.
A special task force made of key players from Terra, Nalaikh District, and XGround – a fintech company with a strong base in Mongolia – will oversee the initiative.
Founded by a team of business, finance and blockchain experts, Terra is designing a digital currency that it claims will power the next-generation payment network on the blockchain. It uses a dual-token model to fully collateralise its stablecoin Terra, with a decentralised asset and second token called Luna.
Terra has offices in Singapore and Korea.
Nalaikh City is located 36 km east from Capital City Ulaanbaatar and hosts a population of about 40,000. It is Mongolia’s first industrial hub, serving as the home to the first state coal mining company since 1922. Today, the industry is still developing rapidly, with the City supporting other growing sectors such as agriculture and the production of consumer goods.
In support of the Action Program of the Government of Mongolia for 2016-2020, which aims to revitalize the economy and promote growth, Nalaikh City is focusing on increasing internet accessibility and advancing financial inclusion for its citizens.