6 Oct 2020

New financial services firm launches digital currency payments service

5:05 pm on 6 October 2020

A new financial services company is launching a digital currency payments service, which may be the first steps to a digital New Zealand dollar.

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Photo: 123RF

PowerFinance has created a technology platform which will allow businesses to offer secured financial services to customers.

The so-called power dollar is the equivalent of a New Zealand dollar, and finance for deals is backed by currency held by Inland Revenue using provisions that govern tax pooling.

Chief executive Dave Corbett said the programmable money supply would allow businesses to offer a complete service to customers, from the sale of a product or service, installation where necessary, and finance for the transaction.

"Our purpose is enabling local businesses to offer financial services with lower costs, greater transparency and the ability to enhance both customer experience and revenue."

He gave the example of a heat pump company, which might want to offer finance to a customer on top of just a sale and installation.

The company would have created a line of credit in Power Finance, which would be offered to the consumer, who in turn would repay using the platform. The identity of all parties would be verified and all transactions recorded, cutting down on opportunities for theft, money laundering, and fraud.

Corbett said the new power dollar has been established within the scope of current laws and with the co-operation of the Reserve Bank and Inland Revenue Department, although it is not an officially backed or recognised digital currency.

"This is part of a broader trend globally, in other countries they call them central bank digital currencies, this isn't exactly that, this is a sovereign backed digital currency and we think it's going to bring us into a new age if finance."

Power Finance is backed by British financial venture capital company Centrality Ventures as well as local high net-worth local investors, and Corbett said it intended to apply for a full banking licence.

He said the move to use blockchain technology for mainstream financial services in competition with established players was taking a leap ahead of open banking, which is essentially data sharing within the industry.

"This is us saying we've invented the light bulb, when everywhere is being lit by gas lamps."

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