To accelerate cross-border payments through the blockchain, a global settlement network platform, Velo Labs has partnered with two other fintech firms to establish a remittance corridor between 27 European countries and Thailand.
In a press statement, Velo Labs indicated that the corridor worth $17 billion will be hosted on the Stellar (XLM) blockchain alongside a partnership with Tempo Payments and Bitazza.
According to Velo Labs, the three companies are focused on solving the current cross-border remittance inefficiencies. The corridor will be anchored on the fintech firm’s network alongside Velo Labs’ decentralized technology.
The remittance platform will also leverage the Velo tokens and Velo digital credits for on-chain transactions. Furthermore, it aims to serve almost 600 million customers across Southeast Asian nations and Europe.
The corridor also seeks to enhance faster and cost-efficient cross-border payments. According to Velo Labs CEO Mike Kennedy:
“What we’ve launched today is a validation of our core mission: building a global, decentralized, and interoperable network that will allow businesses and individuals alike to securely and instantly transfer value across the globe. Velo Labs wants to make cross-border transactions faster, cheaper, and more reliable for everyone; this first step starts us down the path of that reality.”
Growing competition in cross-border payments
The initiative by the three companies is accelerating competition for companies utilizing blockchain to power cross-border remittance.
For instance, U.S.-based Ripple is among firms establishing themselves in Europe as leaders in cross-border payments. Notably, a quarter of Ripple’s current customers are based in Europe.
Additionally, the three companies’ choice of Europe aligns with the region’s growth as a critical fintech leader and source of payment origination. Furthermore, most European countries have enacted open banking regulations supporting the growth of fintech.
Following the remittance corridor’s establishment, the price of Stellar’s native token XLM has surged 12% in the last 24 hours. By press time, the token was trading at $0.34.