​ASX-listed Digital X partners with Telefonica for money transfer in Latin America

Former bitcoin miner Digital X has signed a deal with telco giant Telefonica to market its cross-currency cash remittance platform in Latin America.
Written by Asha Barbaschow, Contributor

Digital X has partnered with telco giant Telefonica to market its app-based cash remittance product, AirPocket in Latin America via an SMS campaign.

The marketing deal builds on the existing distribution and sales agreement the companies signed earlier this year, which gives customers in North America access to transfer funds directly into mobile phone accounts of Telefonica users in Argentina, Columbia, Costa Rica, Ecuador, El Salvador, Guatemala, Mexico, Nicaragua, Panama, Peru, and Uraguay.

"This partnership is transformational for our company, and I am not only talking from a revenue opportunity perspective," CEO Alex Karis said in a statement.

"This deal puts our emerging technology company on the global stage and cements our positions as a first mover in providing a blockchain application of commercial scale."

The company told shareholders Tuesday it also expects that AirPocket will be launched on both Google Play and the App Store in the US before the month is over.

Although Digital X is based in Perth, AirPocket is not available in Australia.

Previously, Digital X was listed on the Australian Securities Exchange (ASX) as DigitalBTC, undergoing not only a name change in October, but a shift in business model as well.

DigitalBTC, trading as Digital CC, was formerly solely involved in bitcoin mining, a procedure whereby a company is rewarded with the cryptocurrency for performing calculations that secure the blockchain and confirm the validity of a transaction.

In May 2015, Digital X raised AU$3.5 million to fund the development and rollout of AirPocket and after rebranding, Digital X announced its focus would be on the AirPocket platform, saying that the new name and direction represented a strategic change from a focus on bitcoin as a mechanism to store value to a focus on software development.

However, the company did not ditch the cryptocurrency altogether, posting an update on its coindesk trading earlier this week, announcing revenues for the month of April surpassed $4 million.

The strong revenue was attributed to the increase in demand from US-based customers, which put them on par with Chinese-based exchanges for the first time in years, Karis said.

In its third quarter results posted earlier this month, Digital X reported an operating loss of $1.27 million.

For the three months ended March 31, 2016, Digital X's bitcoin trading activity produced approximately $5.7 million in revenue, which the company said helped to offset the cash burn AirPocket caused, as well as the "winding down" of bitcoin mining.

Within the three month period, the company spent $6.7 million on the purchase of bitcoins for its liquidity desk, and over half a million on the power and hosting requirements for the cryptocurrency.

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