- Hong Kong-based fintech firm Octo3 is launching an initial coin offering as part of its plans to revolutionize how payments are done
- By using blockchain technology, the platform will aim to decentralize existing payment networks
- Buyers will be able to bypass intermediaries like banks and financial service firms when paying sellers
A Hong Kong-based fintech firm is launching an initial coin offering as part of its plans to revolutionize how payments are conducted.
Octo3 Group is a start-up that currently sells a range of financial technologies, but it's hoping to bring its global payment processing network onto a blockchain platform. As part of that move, the company plans to hold a digital token sale from Oct. 3 to 31.
The move could change the entire payment landscape, Chairman Ajmal Samuel told CNBC.
Currently, "many merchants cannot accept different payment methods and consumers ... cannot pay with those particular payment methods which they have," Samuel told CNBC.
Those challenges stem from the large number of intermediaries, such as banks and financial service firms, involved in issuing, processing and acquiring payments. But the situation could soon change, he said.
"With the advent of blockchain type of technologies, a lot of innovation is starting to happen, which opens up room for parties like us to go in and make these networks fully accessible to the community," Samuel said.
The new platform will open up and decentralize existing payment networks, and make it easier for buyers to bypass intermediaries on their way to paying sellers, he added.
The initial coin offering (ICO) is the first step to making the new blockchain platform a reality.
ICOs are a means for start-ups to raise capital by allowing users to buy into their platform. In return for money, investors are issued new cryptocurrency created by the firm. Although the functions vary depending on the digital token, users can often use them to purchase goods and services on a start-up's platform or to take a profit should the asset appreciate in value.
The digital token market is worth billions of dollars. Around the world, firms are increasingly turning to ICOs as a fundraising method. Around $1.78 billion have been raised through initial offerings since 2014, according to an ICO tracker from industry outlet CoinDesk.
But many are worried that ICOs expose investors to higher risks of fraud and money laundering due to a lack of regulation. And regulators are beginning to clamp down on the industry.
For Samuel's part, increased crypto regulation is a "positive thing."
"The market in the past has just been completely without any regulation, and there were things which were happening which would not be really seen as appropriate," he said.