Crypto Service Via Phone Text Launches In Argentina, Turkey

Fintech mobile firm CoinText.io on Monday launched its crypto SMS service in Argentina (population 44 million) and Turkey (80 million) that lets anyone send and receive Bitcoin Cash (BCH) simply by texting on their mobile devices. Both countries are experiencing hyperinflationary conditions in which the Argentine peso has lost 60% and Turkish lira has lost 40% against the U.S. dollar this year.

CoinText offers a cryptocurrency-based alternative to sovereign fiats by enabling users to bypass exchanges and trading platforms. The SMS service lets people send and receive Bitcoin Cash via phone numbers or BCH addresses without requiring internet access, apps or passwords.

Users enter via SMS text the BCH amounts and two-factor authentication to recipients’ mobile numbers. The service works on older-type text phones or smartphones such as iPhone and Samsung, according to Oct. 15 statement. (CoinText supports Dash and Litecoin in other regions in which it operates, but currently not in Argentina and Turkey.)

Tool For Crypto Adoption In Emerging Markets

Money-transmission services via phone texting have gained wide adoption in Africa, becoming electronic money in regions that lack banking and tech infrastructure. Various iterations of the service allow Africans to add mobile credits and to use these like regular money when buying goods and services. It can be especially useful in remote places that don’t have ATMs, banks or internet access. For instance, the phone credits can be used to pay merchants by texting the recipient’s cell number.

If CoinText (a New Hampshire, USA-registered startup) sees market penetration in emerging markets and beyond, its business model could be seen as the more realistic and effective approach to offering cryptos to millions of people who lack internet access, as well as, those who can’t afford expensive devices. There will be 5 billion mobile users globally by 2019 and 36% of gadgets will be smartphones, according to data compiled by Statista.

“Bitcoin is better money,” said founder and CTO Vin Armani in Oct. 15 statement. “Many Turks and Argentinians already understand this due to high inflation. We are excited to provide tools to help them use cryptocurrency.”

The crypto SMS service launched in Hong Kong earlier this month.

Both Argentina and Turkey have dire economic conditions. Argentina’s current inflation rate is 31.8% according to International Monetary Fund (IMF) and Turkey’s is 15%. These rates are among the highest in the world after Venezuela. However, inflation in either country could get worse as local governments and central banks create more fiat cash to pay its bills as well as pay its U.S. dollar-denominated debt.

“Individuals in countries with hyperinflation, including Venezuela, have been discovering how cryptocurrencies can address practical problems impacting their daily lives,” says Dash CEO Ryan Taylor in an interview. “When a country’s fiat is unstable or unreliable, it directly affects every payment method available to consumers and merchants.”

CoinText operates in several continents to varying degrees of success. In the Americas, the firm offers its service in Canada, USA, Mexico, Chile and Argentina. It’s also in South Africa, Israel, Palestine, Turkey, Hong Kong and Australia. It’s available in nearly a dozen countries in Europe.

“To onboard your friends, you had to convince them to do the same process. Now you can just text money to their phone,” said Armani.