I first met the team from Coconut at the MIT Bitcoin Expo 2018 where they presented their solution at the pitch competition, winning the award for best new nascent blockchain project. I had the opportunity to sit down with Kunho Kim, founder of Coconut and B.A. in Environmental Science and Public Policy from Harvard and his team members Brad Riew B.A. candidate at Harvard University in Cognitive Neuroscience and Evolutionary Psychology, Tree Saengja B.S. candidate in Computer Science and Engineering at MIT, Catherine Tuntiserirat B.A. candidate in computer science at Harvard and Pond Premtoon B.S. candidate in Computer Science and Linguistics at MIT to discuss the growth of their company.
Coconut is a universal payment platform that allows customers to use any cryptocurrency to purchase goods and services. Clients choose the token they want to pay with and merchants choose a fiat or crypto currency in which to receive payment. Coconut verifies the transaction and exchanges the currency of payment for the currency of receipt. Coconut’s protocol automatically selects the optimal partner exchange platform as a liquidity provider to exchange the currency of payment for the currency of receipt, resulting in lower transaction fees of around 0.5% over those currently paid by merchants for credit card transactions which can be as high as 2-3%. Transactions are processed in real time and by accepting their payments in fiat currency, merchants can avoid any unwanted volatility in token value. In essence, Coconut has found a way to solve the problems with real world implementation of cryptocurrency transactions by allowing universal coin to coin or coin to fiat transactions simply and in real time at a lower cost than current options.
However, Coconut does not sacrifice security for convenience. “We do want to prevent illegal activities that are happening in the crypto world. We want to work closely with regulatory bodies, and if an account seems like it has illegal activities happening we want to cooperate with them,” said Kunho. To that end their systems are robust and employ fintech industry-standard solutions such as 2-factor authentication at the point of sale for fraud deterrence as well as KYC to prevent money laundering and other suspicious activities. By partnering with existing point-of-sale system, no new architecture is required for deployment and finely tuned data analytics can be run with ease.
The Coconut team has self funded the development of their solution, making it an even more impressive accomplishment. Catherine explained, “We are very harsh about the execution of our product. We have secured all these partnerships and we will be rebooting our product in an alpha phase which will be tested text month, and all of this is a product before we ask for any kind of money, which is not a common thing in this landscape where usually you raise the money first before anything comes out.”
Though the technology was developed in Boston, MA they plan to incorporate the company in Singapore. Their first seed rollout will be in Q2 of this year in Seoul, South Korea due to the market’s enthusiasm for cryptocurrency solutions. By Q3 they plan to have their Beta released, with full product rollout by Q4. In 2019 their goal is to expand globally starting with Thailand and Southeast Asian markets. Coconut then plans to expand to larger economic markets like China and the US as the regulatory environment matures and stabilizes.
Coconut’s advisory group includes prominent figures like Seohyeon Bae, Director of the Fintech Business Team at KB Bank, Jungsoo Lee, CEO of one of the top 3 Point-of-Sale (POS) systems in South Korea, Munk Seo, Director at the second-highest owner of blockchain patents company in the world, and SoonChul Kwon, Director of the top OTP solution provider used by every bank in South Korea. These industry leaders have not only helped with the development of the platform, but also with the strategies and partnerships needed for the successful execution of their rollout.
After questioning them for an hour, I was left with several strong impressions about the Coconut team. All of them have the highest ethical standards, striving to provide an innovative solution to the market in truest sense of corporate responsibility. Their brilliance shined through, each having a unique strength they bring to the company to drive it forward. I will end with a quote from Kunho that summarizes it best, “We are a young group, and we are really passionate, and we are a set of go-getters.”