DigitalX enters into revenue sharing agreement with Australia’s largest Bitcoin exchange
Blockchain enhanced software solutions company DigitalX (ASX:DCC), a group that assists consumers in making secure and cost-effective money transfers, has entered into a binding agreement with Blockchain Group (BGL), owner of ACX.io, the largest Bitcoin exchange in Australia by volume and order book.
In terms of the agreement, DCC will wind down its DigitalX direct operations by introducing these clients to BGL, and in consideration it will receive 50% of all revenue for customers introduced to the BGL digital currency exchange, as well as on other international exchanges that are rolled out over the next five years.
This agreement comes approximately three months after management announced that it was reviewing its Bitcoin operations with a view to leveraging its knowledge, trading platforms and customer base.
Explaining the value of DCC’s technology and also highlighting the challenges in expanding such a product, Chief Executive, Lee Travers said, “Whilst the platform provided invaluable experience in blockchain technology to the DigitalX development team, it also presented significant challenges in concurrently creating a world-class money transfer service”.
This agreement will effectively allow DigitalX to focus on its money transfer application, AirPocket, while receiving ongoing revenues from the BGL arrangement.
AirPocket is a mobile bill pay and money remittance application providing low-cost, secure and instant transfer solutions. The application is built using blockchain technology, allowing the platform to scale on demand due to the cloud-based technology.
World Bank remittance inflows data for April 2015 suggests the size of the global remittance market is nearly US$600 billion.
Management estimates its initial target markets, Latin America and the Caribbean, will open up a US$65 billion remittance opportunity.
However, how much of the market DCC is able to corner is speculative at this stage and therefore investors shouldn’t act on this fact alone, but should take all publicly available information into account and seek professional financial advice.