Nimiq, whose main development hub is in Santa Teresa, in Cóbano de Puntarenas, and the German bank TEN31, will implement the Nimiq OASIS (Open Asset Swap Interaction Scheme) blockchain platform for purchases and transactions with cryptocurrencies through bank transfers.
The deal was rated by Yahoo! News as “a breakthrough in compatibility between blockchain and traditional banking.” Blockchain is the blockchain technology that facilitates the development of cryptocurrencies with higher levels of traceability.
The alliance will allow the use of Nimiq OASIS, the digital wallet Wallet Nimiq and the cryptocurrency NIM in a variety of services and payments, which will be enabled in stages. “The user will be able to make daily payments,” explained Ricardo Barquero, Nimiq’s communication manager.
For Costa Rica
In Costa Rica, the initiative will present a request to the Central Bank of Costa Rica (BCCR) next July to join Sinpe and for the population to make transfers and payments with cryptocurrencies. As of press time, the BCCR had not responded to EF’s inquiries on this issue.
If digital change puts pressure on commerce with online sales and new business models, cryptocurrencies do so on the monetary system and the centralized scheme of central banks, as they allow decentralized finance (transfers, currencies, and credits) without high costs or commissions.
The challenge lies in knowing its benefits and risks. “The authorities, including the BCCR, must increase their knowledge of cryptocurrencies, because it will allow them to consider integration into the local system as a trend that will not stop”, said businessman Adrián García. “There are already people accepting payments and investing in cryptocurrencies. More people, more companies and more governments are going to enter”.
El Salvador has already approved its use, especially focused on remittances sent from the United States and other countries. At a global level, there are some 10,000 cryptocurrencies that are developed so far from the controversy over the volatility of bitcoin prices (it fell from US$ 64,000 to US$ 36,000 between April and May, 2021, due to Elon Musk’s tweets) as strangers were the 12,000 participants in a recent event on the first virtual currency in Miami, including Jack Dorsey, the CEO of Twitter and the Square payment company.
Facilitating access to this cryptocurrency
In this framework, the purpose of the Nimiq OASIS protocol is to facilitate secure access to virtual money with a view to the mass market, allowing the purchase, exchange and sale of euros, dollars, Swiss francs or other currencies and cryptocurrencies, as well as other transactions and payments.
“Nimiq OASIS is a revolution in cryptocurrency trading,” he told Yahoo! News TEN31 CEO Mattias von Hauff. TEN31 was created by WEG Bank AG of Germany to drive innovation in its services, especially in the field of virtual currencies. WEG Bank AG will be renamed TEN31 Bank AG in the coming months.
With this step, bank customers with an account in the Single Euro Payments Area (SEPA), the European Union’s transfer and payment system similar to Costa Rica’s Sinpe, can carry out transactions with bitcoin, NIM or other cryptocurrencies in the 27 markets of that economic region.
This opens the possibility of connecting Nimiq OASIS with traditional payment networks, so that a person makes payments in retail stores. For this, there are also conversations with card issuing brands. This last step is expected to begin in 2022.
The development of the Nimiq platform is decentralized: a team in Santa Teresa and different working groups elsewhere. They are about 20 Costa Rican, German, French, Portuguese, Hungarian and Romanian computer scientists led by Philipp von Styp-Rekowsky and Elion Chin, under the umbrella of the Silicon Paradise movement, which has other initiatives. Also, they rely on 15 other external collaborators. Another feature is that it uses a programming language called Hash Time Lock Contract (HTLC), which is a type of smart contract with the ability to create payment channels.
Barquero highlighted that, unlike other forms of money exchange, the system guarantees transactions through smart contracts (known as Fiat Smart Contracts) that operate with blockchain, where the transfer of money is completed when everyone fulfills their part: if they buy dollars, for example, transfers between colones and dollars are effective only when each person makes the corresponding deposit; if one does not comply, the other withdraws their money.
For the maintenance and operation of the platform, a commission of 1.25% to 1.50% is charged for each transaction, which the developers describe as “very low”.
Another purpose of Nimiq OASIS is to solve several problems related to bitcoin transactions: duration (from 20 minutes currently, decreasing to one minute and then to second), energy consumption (bitcoin uses powerful servers) and economic costs and associated environmental issues.
Above that Nimiq (whose current price is US$ 0.006) stands out because it allows the use or purchases of bitcoins (and in the future of different cryptocurrencies) and of national or regional currencies (such as the euro) for that “atomic” exchange of money between people and companies.
Jeffrey Esquivel, blockchain developer at Nimiq, explained that euros, dollars, or colones can be exchanged without the need for cryptocurrencies. In the case of a digital or physical store that does not accept cryptocurrencies; the user can pay with virtual money from their wallet as the system converts them into colones, dollars or the local currency of use.
To be integrated into local systems like Sinpe, there would be no major technical difficulties, since Nimiq OASIS is an API-type programmable interface. Barquero assured that they already have the corporation established in Costa Rica and with the approval of the General Superintendency of Financial Entities (Sugef) to be a supervised entity.
Stages of use of Nimiq OASIS:
•Purchase and sale of cryptocurrencies. It allows transfers and transactions from the Wallet Nimiq wallet.
•Integration. It also allows transfers and transactions from any existing digital wallet.
•Online purchase. Through a plugin, Nimiq and soon the Etherium cryptocurrency are integrated as a means of payment with bitcoins to e-commerce stores based on the WordPress platform.
•Physical purchase. Users can do their payments in supermarkets, restaurants, hairdressers and barbershops, convenience stores, as well as other businesses and services.