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A new blockchain Initiative to Assist Emerging Economies
Editorial Team

On April 16, 2018, Freedium announced at the Dubai Blockchain Forum the launch of the first commodities-backed digital stable currency tracking the US Dollar. Freedium aims to provide financing to commodity owners in emerging countries, such as Africa, Latin America and Middle East. The schedule defines the start of operations in the Q3 2018 while the first issuance of Freedium coin in Q4 2018.

Taking as granted the announcement, we grasp the chance to present the company’s vision and achievements.

The Dubai-headquartered company has built a strong team of technology and investment veterans with precious expertise in Blockchain such as Aron Dutta, former global head of Blockchain development at IBM and chairman of VARHP, who is serving as Freedium’s Chief Strategist Officer.

According to Dutta, the company’s mission is summarized as follows:

“Our mission is to facilitate the seamless exchange of value between developed and emerging market trading entities in a trusted business environment.”

The Freedium Blockchain-based solution is designed to unleash emerging and developing countries from constraints like restricted and limited access to financing, foreign exchange scarcity and volatile currencies.

“Emerging and developing countries have a population of 6 billion people, represent 60% of global GDP and generated 80% of global GDP growth since 2008. Mobile and smartphones have allowed these countries to get connected with the rest of the world and access the global information superhighway. Now, the Blockchain technology can enable emerging and developing countries to efficiently transact with other nations and access global financial markets,” said Keba Keinde, Founder and Chairman of Freedium

“Therefore, we set out to create a financially inclusive ecosystem that would enable people from emerging and developing countries to access financing and banking services to send, receive and store money in a stable and fully backed digital currency and trade in a seamless and efficient way using smart, KYC/AML compliant contracts,” continued Keinde.

Freedium will address these challenges with the creation of the first stable currency backed by a variety of commodities, the Freedium Coin (FDC)

✔ By using commodities as collateral, the company will provide liquidity to commodity producers and establish a cryptocurrency fully backed by value.
✔ The company though hedging and stabilization mechanisms will provide a stable cryptocurrency that tracks the USD within a narrow range, proving a new option to people with limited foreign exchange access.
✔Freedium will provide a platform for the provision of banking services to the unbanked in an ecosystem powered by a stable currency that is globally usable.

☒ The FDC will be backed by a set of diversified and uncorrelated commodities providing a remarkable level of resistance against black swans and differentiating itself from the most of the existing stable coins.

Important! The FDC is a non-speculative stable digital cryptocurrency token fully backed by value. This means that it is fully backed by the real economic value of collateralized commodities, such as gold, steel, rice, oil, sand and fertilizer with an intrinsic value based on commodities stored in a global network of warehouses. The FDC is stable thanks to a number of different features and stabilization mechanisms.

The collateralization process that drives to the issuance of FDC is the following:

√ The commodity owner transfer commodities to a warehouse

√ The warehouse evaluates and verifies the commodities’ quality and stores them

√ The warehouse issues a receipt for the stored commodities. This receipt is published on the Blockchain and into the SG0B. Once a CFD is established for the receipt, the current market price of the commodities is stabilized

√ FDC is issued according to the value of the stored commodities which serve as collateral

Therefore, the Freedium initiative is not going to introduce another cryptocurrency to the market. It is about building an entire ecosystem that will bridge the needs of less fortunate people with the global financial and payment services to foster inclusion.

Our take

Taking into consideration the innovations that FDC brings, we see enormous potential in the creation of the Freedium Financial Inclusion Ecosystem, whose is the first piece. Freedium Financial Inclusion Ecosystem will address the main economic challenges in emerging markets and the developing world. However, this could easily become an effective mechanism for the developed economies as well on behalf of commodities owners through the aggregation mechanism which will increase liquidity and provide a better price discovery tool for smaller owners. Furthermore, in a world full of black swan events, the certain degree of resistance against them could be proved to be an extra motive for “no-coiners” to take the plunge and enter a nascent and immature market.  At a later stage, the Freedium ecosystem will be able to provide pre-export finance and reserve-based lending services allowing countries and people around the world to raise capital-based on their assets to finance social and economic progress.