Cash App, the fourth most popular financial application in the US, boasts 50 million monthly active users in 2024. This represents about 17.6% of the US population, or roughly one in six consumers. Cash App's parent company, Block (formerly Square), continues to drive innovation in the financial technology space including a small startup called TBD.

TBD, Unlike traditional blockchain technologies, tbDEX is an open-source, decentralized exchange protocol designed to bridge the gap between conventional financial systems and decentralized technologies like cryptocurrencies. TbDEX leverages decentralized identifiers (DIDs) and verifiable credentials (VCs) to establish trust and facilitate compliant transactions between counterparties without centralized intermediaries.

TbDEX brings two key features to the table: the decentralization of Know Your Customer (KYC) data and a workflow for a Request for Quote (RFQ) system. These innovations raise important questions: Is this enough to drive adoption in the 28 Trillion dollar international payments business? Will it result in cost savings for the end customer? There are several factors indicating the project is on the right track.

First, by excluding blockchain, digital assets, or stablecoins from its core solution, tbDEX alleviates concerns for remittance companies wary of jeopardizing their banking relationships, bank account access, and regulatory compliance. This strategic move makes tbDEX an attractive option for companies looking to innovate without risking their existing banking connections. Digital assets such as Stablecoins can be used - and are by US firms such as Conduit - but are not a required part of the solution.

Integrating an ISO 20022 payment gateway into tbDEX would be straightforward. For our proof of concept, we used a payment in USDC, sending funds to Nigeria via Stellar. The KYC and other steps are currently mocked up, but the underlying workflow can be easily adapted for any remittance company or wallet.

Many remittance companies already rely heavily on third-party providers for KYC services, such as Reuters, Onfido, Veriff, GBG, Sum & Substance, and dozens of others. In Europe, PSD3 regulations already support this model of KYC validation, where banks serve as KYC providers. This existing reliance on third-party KYC services demonstrates a readiness within the industry for tbDEX's decentralized approach.

Existing B2B financial workflows using Bloomberg terminals or the Financial Information Exchange (FIX) do handle RFQ Message Workflow but they are not really used in the remittance space and they do not handle the settlement aspect that well. Will remittance companies allow open Request For Quote solutions? Will this drive profits to be like the airline industry which is riddled with extra addons?

Bankaya, Conduit, and Chipper Cash have all signed up and tbDEX recently held a road show around Africa. Can this be a way to drive remittance volume while removing the agent fees? It is too early to confirm but let's see if the solution gets any traction.

Interested in doing a tbDEX pilot? Call us today!