Oromia Cooperative Bank (COOPBank) has taken a groundbreaking step in the modernization of financial services by integrating blockchain technology into its remittance services for Ethiopians living abroad. The bank has partnered with Estonia-based Inclusive Finance Tech Foundation (InFTF MTU) to launch Ethiopia’s first blockchain-enabled remittance platform. The platform aims to provide faster and more affordable cross-border remittances for the Ethiopian diaspora.
Addressing the challenges of traditional money transfers
Ethiopia has a large diaspora community, with millions of its citizens living abroad regularly sending financial aid to their families back home. However, traditional money transfer methods have long been characterized by inefficiencies such as high transaction fees and long processing times. These delays and costs disproportionately impact those who rely on remittances as their main source of income. COOPBank’s new services aim to address these challenges by providing a more streamlined and cost-effective money transfer solution.
The bank’s leaders expect the new blockchain-based platform to significantly improve the speed and affordability of remittances, benefiting communities across Ethiopia. COOPBank executives emphasized that the collaboration with InFTF will modernize the country’s financial services through the implementation of cutting-edge blockchain technology.
Instant transfer and cost savings
The newly launched service is expected to revolutionize the way Ethiopian diaspora send money. According to COOPBank, its blockchain-powered platform allows users to transfer funds within three seconds, a significant improvement over the slow processing times associated with traditional money transfer services. Additionally, the service aims to eliminate the high fees commonly charged for international money transfers, making the process more affordable for users.
InFTF provided its blockchain expertise to develop this system, which is built on the Xahau blockchain network. Xahau is a decentralized and scalable platform that includes smart contract functionality, a feature that adds automation and security to financial transactions. Smart contracts ensure that all transactions comply with existing regulations, while protecting users from fraud. COOPBank emphasized that these elements of security and compliance are critical to building trust in Ethiopia’s digital financial ecosystem.
InFTF management committee members said their technology aims to create a robust and transparent environment that is accessible to everyone. A key element of this effort is that blockchain platforms focus on underserved areas, particularly those that have been overlooked by the traditional financial system. By leveraging blockchain, InFTF aims to bring the benefits of modern financial technology to more people and address long-standing challenges in cross-border transactions.
Wider digital transformation
A blockchain-based remittance platform is not the only technological innovation that COOPBank will introduce in 2024. Earlier this year, the bank announced an artificial intelligence-supported online banking platform designed specifically for Ethiopians living abroad. The platform will enable diaspora communities to manage various banking processes online, including account opening and management, further expanding the bank’s digital services to meet the evolving needs of its customers.
The COOPBank president emphasized that the bank’s continued focus on modernizing its financial services will have a positive impact on both its customers and the broader Ethiopian economy. He noted that the new blockchain-powered remittance service is part of a larger effort to empower communities across Ethiopia by making financial services more accessible and affordable.
An institution that grows with a vision of innovation
Oromia Cooperative Bank, whose majority shareholders are made up of cooperatives, was established in March 2005 and has grown to become one of the largest private banks in Ethiopia. According to data on the bank’s website, the bank currently has assets of more than 140.52 billion birr and operates a network of more than 760 branches across the country. The bank serves more than 13.4 million account holders and is a major player in Ethiopia’s financial sector.
COOPBank’s recent foray into blockchain and AI-powered financial solutions demonstrates the company’s commitment to leveraging technology to enhance its service offerings. By adopting blockchain technology, the bank is positioning itself as a leader in digital innovation in the Ethiopian banking industry. The launch of this blockchain-enabled remittance service marks an important milestone in the bank’s continued efforts to transform Ethiopia’s financial landscape and serve the needs of its rapidly growing diaspora community.
In conclusion, the introduction of blockchain technology into Oromia Cooperative Bank’s remittance services will revolutionize cross-border remittances for Ethiopians abroad. The collaboration with InFTF, coupled with the advanced capabilities of the Xahau blockchain, is expected to make remittance services faster, more affordable, and more secure for the diaspora. COOPBank continues to innovate and is a leading example of how emerging market financial institutions can leverage blockchain to improve financial inclusion and efficiency.
