Indian start-up Trestor Foundation is trying to advance the virtual currency market's usability at a time when cash flow in the system is low, and arrest the gap left by Bitcoin.
India-based non-profit organisation, Trestor Foundation, has put into action a plan to help Greeks buy basic amenities at a time when their banking system is under a lockdown.
Banks pulled their shutters down a week ago, after Prime Minister Alexis Tsipras rejected the bailout program proposed by the troika of creditors, and instead called for a referendum vote that is underway today. Since then, only about 300-odd bank branches are open, accessible only to pensioners who don't use a debit card. Other debit card holders are allowed to withdraw only a maximum of 60 euros a day per card; 120 euros per card if it is a joint account.
This is where Trestor Foundation, a not-for-profit organisation decided to step in. Trestor Foundation, headquartered in Toronto, Canada, developed a Bitcoin-rivalling virtual “cryptocurrency” called Trests, and is now offering 2,000 euros worth of Trests to Greeks, in exchange of only a promissory note stating that the person will pay back the 2,000 euros when banks reopen.
Trestor Foundation is trying to advance the virtual currency market's usability at a time when cash flow in the system is low, and arrest the gap left by Bitcoin. A cap on withdrawals means that Greeks cannot buy the $259.99 Bitcoin.
A Trest is pegged to the US dollar, and its current value is one cent. However, the company expects the value of it to go higher soon, as has been seen before with Bitcoins, during the time of financial uncertainty, Amanjit Singh Narwal, Trestor Foundation's Co-Director Secondary Markets told dna. "Throughout history, whenever a country has experienced political instability, prices of alternative stores of value, like gold, have spiked. That is history, we're in the 21st century and today's alternative is cryptocurrency", he added.
The Trests that Greeks will get under this program will also be a hedge against currency fluctuation. This is simply because they are pegged to the dollar. This means, if the euro were to tumble on the outcome of the referendum, the US dollar will in turn strengthen, and hence, so will the value of Trests in your wallet.
The market cap of Bitcoin as of June 1 this year was $3.7 billion, while Trest market cap on the same day was $1 billion, the company has said.
A person in Greece interested in opting for this option, can go to Trestor Foundation's one of four retailers in Greece, and produce identity proof and a bank statement to prove their creditworthiness. The retailer will immediately get the necessary forms filled and duly signed, and send them to the Toronto office. The person will receive Trests worth 2,000 euros (according to the current exchange rate) as soon as the forms have been verified, which will not take more than two hours, Narwal said – a departure from the usual bank procedures.
These Trests can be checked on the company's smartphone app, and can be transferred within seconds, using only the person's user id. The retailer here, as opposed to the company's other retailers in the rest of the world is only a middle man. He doesn't have to invest or pay any amount to buy Trests. Instead, he simply has to verify the documents and send the completed forms to the Foundation, who will immediately transfer the Trests to the customer's account once he's created a user id. The entire process of transferring Trests takes well less than a minute. Currently, the organisation has nearly 600 retailers operating in 64 different countries.
These Trests can be used to buy daily necessities from merchants in Greece that accept the virtual currency for as a mode of payment. Since the program was put into action less than a week ago, Trestor Foundation has tied up with four retailers to look after their paper work and transfer of Trests. These retailers will be given incentives on every contract they sign, thereby ensuring that the word of this option spreads among those who need money to buy things. These retailers in turn are also working to convince more and more merchants on the ground to accept Trests as a mode of payment. Trestor Foundation says if more and more merchants come on board, then this option has the potentiality to ensure that business carries on as usual in Greece, despite capital controls and a cap on daily withdrawals.
One of the main concerns in Greece right now is also buying medicines and gas. For this, Trestor Foundation is working to tie up with various medical shops and gas stations. They say, any gas station or medicine shop that accepts Trests as payment, will be paid the amount back in fiat currency (here, the euro) as soon as the shop owner transfers the Trests to the Foundation's id. “This is a win-win-win proposition,” Narwal says. The Trests user will be able to buy his medicines or gas, the shopkeeper gets the money in his account, and more and more Trests are released into the system, he said.
At the time of repayment, Trestor Foundation says that Greeks will only have to pay back 2,000 euros irrespective of the exchange rate on that day. The company got seven takers, all working professionals, in the first 24 hours that this program went live, and after due diligence, Trests worth 2,000 euros were transferred to each one of them, Kunal Dixit, Founder of Trestor Foundation has said.
“Ancient Greeks invented finance. Greece was the starting point of currency and 'movable' wealth. Trestor will do whatever is possible to help Greek citizens hedge economic risks arising out of the current European political circus,” Dixit said.
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