The Bank Account Based Blockchain (BABB) is an incredibly disruptive concept, but its cryptocurrency BABB (BAX) might be a lousy investment.
The BABB platform is designed to achieve two goals with the potential to totally disrupt the financial system. The first goal is described in this description of BABB as “a decentralized banking platform that leverages blockchain and biometrics to offer anyone in the world access to a UK bank account for peer-to-peer (P2P) financial services.”
The revolutionary notion here is that anybody, anywhere in the world would be able to bank in the City of London via an app on his or her phone. To achieve that BABB is building an app that can be best described as “Apple Pay on steroids.”
Apple Pay on Steroids
With current apps like Venmo and Google Pay, a person can make payments, or send cash to friends. BABB would let you open an account and utilize any sort of banking service through its App.
The BABB app is essentially a digital wallet that would use either near-field communication (NFC) or quick read (QR) code to communicate with cash registers and ATMs. That means it would theoretically work with any register that accepted Apple Pay or WeChat Pay.
QR code apps like WeChat Pay and Alipay communicate with registers by scanning a code through a phone’s camera. NFC solutions like Apple Pay and Google Pay send a wireless signal to registers or ATMs. BABB is designed to do both and covert cryptocurrency into fiat currencies.
BABB Plans to Change the Way you Bank
If it works advertised, the BABB would change the way bank because anybody would be able to set up a UK bank account by taking a selfie and creating a passphrase.
Access to the account would be determined by biometrics such as face scans which would create a digital identity. The digital identity would form the basis of the bank account and serve as a Know Your Customer (KYC) solution. That means instant banking without paper documents or a visit to a teller.
One potentially lucrative use of the BABB app would be to transfer money anywhere in the world. It sounds as if BABB wants a piece of the huge internal remittance market. The term remittance refers to the money that individuals transfer to friends and family in other countries.
How Babb Plans to Tap the Remittance Market
Remittances are a big business the World Bank estimated the value of all global remittances for 2017 at $596 billion for 2017. That number increased by 3.9% in 2017. Global remittances are expected to grow by 3.4% to $616 billion in 2018.
BABB seems well positioned to cash in on the large portion of the remittance market transfers to developing nations. Immigrants in developed countries sent $450 billion in remittances to folks back home in places like Africa and Latin America in 2017. Remittances to developing countries grew by 4.8% during 2017.
Most remittances are still sent through wire services like Western Union (NYSE: WU) and MoneyGram (NASDAQ: MGI). BABB hopes to change that by enabling direct individual to individual transfers which would be a billion-dollar idea.
If it worked the BABB app would give anybody even peasants in remote villages the ability to receive remittances on their phone. That idea would be incredibly disruptive by allowing the transfer of vast amounts directly to individuals in developing nations.
Central Bank Issued Digital Currencies
The other big idea at BABB is central-bank issued cryptocurrencies. BABB would allow central banks to operate portions of its network in order to distribute funds.
The hope here is to get around bans on cryptocurrencies like the one imposed by the Reserve Bank of India. That is important because India is the world’s largest market for remittance money, people there received around $65 billion in remittances in 2017 according to the World Bank.
One obvious hope for BABB is that central banks in developing countries will adopt its technology as an alternative to paper money. BABB’s cryptocurrencies would be cheaper and easy to distribute than paper.
This can save money because, contrary to popular belief, most nations do not print their own currency. Instead, they pay companies like the United Kingdom’s De la Rue (LON: DLAR) to print banknotes. That is expensive because the cash has to be shipped from De la Rue’s printing plants to the customers.
BABB wants to create a Cryptocurrency that would be legal tender and government-backed
A big advantage to BABB would be to give central banks more control over the money supply. Another would be to give people in developing countries direct access to stable currency, something that many of them lack.
Another for BABB would be to give people who live in places like Sub-Saharan Africa and regular cross borders the ability to use several fiat currencies at once. A Kenyan truck driver would be able to use BABB to pay for diesel fuel in Uganda for example. Tourists would no longer need travelers’ checks or moneychangers because they would use BABB.
This means BABB is trying to create a cryptocurrency which would be legal tender and government-backing. That is potentially a trillion dollar idea because it might form the basis of a global market of hundreds of millions of people.
Other uses for BABB would be to offer banking services to people in developing countries some of whom might live hundreds of miles from the nearest brick and mortar bank.
One service BABB would offer is the Black Card presumably a debit card. That product is still on the drawing board, and it has no backing from Visa or MasterCard which it would need to access the payment system. Similar products like TenX’s Visa were shut down after Visa pulled the plug on them.
Would BABB be Legal?
Nobody knows if BABB would be legal because it would need permission from the government and central bank in every country it operated in. BABB would need approval from other authorities such as the Federal Deposit Insurance Corporation (FDIC) in the United States as well.
Until it gets such permission or the support of one central bank, BABB is nothing but an interesting concept, not an investment. That means investors should stay away from BABB because there is nothing solid to invest in right now.
Even at an incredibly low Coin Price of .002.5¢ on 25 April 2018, the ERC20 protocol BAX is overvalued. People are buying a concept not a cryptocurrency at BABB.
BABB also seems to lack the resources to achieve its ambitious goals. BAX achieved a market capitalization of $36.02 million on April 25, 2018. That seems like a fraction of what will be needed to achieve its goals. There is some market interest in BABB, BAX had a Market Volume of $2.588 million on April 25, 2018.
The BAX token had a Circulating Supply of 14.249 billion and a Total Supply of 50 trillion which makes the ambitions grander than the reality. Investors would be well advised to stay away from BABB until the company demonstrates it can make the ambitions a reality.