For the first time in the telecommunications industry, one of the biggest players is entering the cryptocurrency market. Deutsche Telekom announced on Tuesday that it was buying tokens issued by Celo.
Deutsche Telekom buys tokens
The German telecom giant has not disclosed the size of the investment, but the corporate director said Decryptthat we are talking about large purchases. The company is also investing in infrastructure to support the Celo network, which is working on building a decentralized version of Venmo-style peer-to-peer payment platforms.
Celo entered the market in 2017. The distinguishing feature of the project is a tool that maps users’ phone numbers on the blockchain. This serves to simplify access to cryptocurrencies, especially for people in developing countries.
According to corporate director Andreas Dittrich, who helps lead the company’s blockchain initiatives, Deutsche Telekom sees various options for using Celo (e.g. money transfers). He admitted that it came as a surprise to himself that the giant became involved with a partner with “Exotic alternative coin”, but he added that the Celo team impressed Deutsche Telekom and believes that the platform can “be great. “
Dittrich also stressed that Deutsche Telecom will engage as an investor and infrastructure provider. In the latter role, the company will run a validation node that is independent of its cellular network, but will also use its network to provide services such as an API that facilitates SMS-based validation. He added that Deutsche Telecom is investing in the decentralized network that Celo is building, and not in the company itself.
We also learned that the telecommunications giant has made a major strategic shift in its approach to cryptocurrencies, moving from a narrow focus on the HyperLedger protocol to exploring all kinds of blockchains.
The beginning of something big?
Deutsche Telecom’s decision to invest in cryptocurrencies may only be the beginning of a new trend for the industry. Rene Reinsberg, co-founder of Celo, predicts that most large organizations, including telecommunications companies, will have different tokens.
Reinsberg also noted that Celo was about to issue a euro-based stablecoin. The new currency is likely to play an important role. It is possible that it will be used by Deutsche Telecom.