Bv DAVID SWAN
Former communications minister and Labor powerbroker Stephen Conroy has backed a new cryptocurrency platform promising to allow its users to buy a coffee – and eventually a house – with crypto, capitalising on commitments from both the Liberal and Labor parties to regulate the controversial digital tokens after the election.
The Digital Currency Reserve – or TDCR – has kicked off a $5m capital raise at a $34m valuation to build out a platform that founder John Fenga says is aiming to become the Visa or MasterCard of the crypto world, and has brought on Mr Conroy as a key advisor.
TDCR’s payments rail will allow users and organisations to exchange cryptocurrency both locally and across borders by placing customers, retailers, services and merchants on a single network, much like the credit card platforms.
Customers and businesses will be able to transact in cryptocurrency without having to first convert into fiat currency like the Australian dollar, eliminating wait times that can sometimes take days, according to its executives.
“We are building a safe, regulated platform that people feel comfortable to trade on,” Mr Fenga said.
“People feel like they need a maths degree in order to figure out crypto at the moment. We’re building that bridge that is desperately needed, and we are creating a platform that will eventually feel like a bank.
John Fenga and Stephen Conroy
“Our goal is to have a platform that allows our members to buy a home with a cryptocurrency loan that they can service with cryptocurrency that they earn from their employer. We want to create a world where crypto is treated like a real currency.”
The Melbourne company is aiming to release a pilot by the end of the year, and is raising up to $5m through equity crowd-funding platform OnMarket at a $34.6m pre-money valuation.
The company’s executive team includes digital technology veteran Jeffrey Cole and marketing expert Steve Lewis, along with management consultant John Markos.
Retail statistics provided by TDCR show that for merchant early-adopters of cryptocurrency payments, 40 per cent of crypto users are new customers to their business, leading to a more than 300 per cent return on investment.
According to Mr Fenga there are more than 300 million cryptocurrency investors around the world yet only about 18,000 establishments globally accept the currency as payment.
“In Australia alone, about one million people have some form of cryptocurrency but can’t use it for day-to-day transactions,” he said.
Crypto has been plagued with controversy since its inception, including numerous reports of hacks and the fact the technology is sometimes used to fund crime.
Mr Fenga said TDCR would bring cryptocurrencies “out of the dark web and into the light”, given its platform enables it to regulate and monitor all transactions and report any suspicious activity.
Put in its simplest terms the platform saves the actual currency and creates a duplicate for transactions. If that duplicate is stolen it is promptly deleted.
“TDCR can monitor these duplicated ‘coins’ because it is the issuer, acquirer, and processor throughout the entire transaction.“
Mr Conroy said his experience in government would be crucial for the business which will require regulatory ticks from Canberra. Ahead of May’s federal election, the former politician said both major parties had demonstrated they’re up to the task of prioritising crypto regulation in Australia.
“Whoever wins, there are enough of these young up and comers who aren’t frightened by the concept and also understand there needs to be a safe space for it to happen,” Mr Conroy said.
“Some countries are trying to ban crypto, some are trying to work out how to safely integrate it into their systems, and I think if Australia is smart we can make ourselves a really attractive place for crypto transactions.”