Written by Mohamed P.Hassan
Singapore is taking an active role in efforts to validate Bitcoin and Tembusu gets ready to carve its name alongside Bitcoin’s adoption across the ‘Lion City’.
Singapore, commonly referred to as the ‘Lion City’ is on the precipice of releasing a framework to govern financial intermediaries that operate on virtual currency platforms. According to Bloomberg, the Bitcoin governance framework will be similar to regulations governing money exchangers and remittance agencies. Singapore’s tax authority has also released guidelines on how it will regulate bitcoin transactions.
Decision Insider recently caught up with Jarrod Luo, the COO of Tembusu Terminals Pte Ltd, the first company to release Bitcoin vending machines in Singapore. Tembusu was founded by Jarrod Luo (COO), Andras Kristof (CEO) and Peter Peh Sik Wee (Chief Strategist), all well-positioned to enter the Cryptocurrency industry with entrepreneurship skills and experiences. According to Jarrod, the company’s founders chose Singapore because they are Singaporeans. The supportive government policies also complemented their commercial ambitions.
The company, which got funded for the first time on March 4, is a partnership between “Estates General”, a cryptocurrency research and consultancy firm, and “Red Steed Studios”. Tembusu started out in late-February 2014, with the rollout of their first bitcoin dispensers in Asia. They plan on to installing five more dispensers in quick succession, with the second deployed just days before this interview. The company managed to raise as much as USD 237,000 by March 12, 2014, when they closed their seed funding round.
Before Tembusu, the founders were engaged in consulting work related to crypto-currency implementations for 1.5 years at “Estates General”. This was followed by a 3-month period of R&D to study the market and the venture potential.
Tembusu’s business model is based on creating machines that are “easy to use”. According to Jarrod, they want to cut the clutter and let general public be able to buy bitcoins instantaneously, more importantly, without having to open a bank account and engage in the usual process to buy bitcoins, which might take as much as 10 days. “Ten days is a lot of time, so much can happen in 10 days,” says Jarrod. It is also worth mentioning that the company was able to able to attain a valuation of over SGD 5.1 million in less than 10 days, within the first fundraising round. The traditional process of buying bitcoins also involves verification and a few dollars can be wasted on just that.
The company is expecting to launch a series A round of fundraising soon. That is to raise around USD 2 million for about 10% of its shares, at a valuation of around USD 20 million.
As of now, Tembusu proposes a model to its partners, operating its Bitcoin exchange machines, where Tembusu is directly managing the back end server interface of the bitcoin dispensers, while allowing operators to manage commissions set over the live selling price. Since machines are currently targeted towards indoors areas, operators now control the operational hours of such machines. However, Tembusu does not rule out the possibility of having outdoor versions of the machines in the future. It is worth to note, Tembusu machines are sold on a flat rate basis, while the company stands to share the revenue with the operator, as an exchange for their continuous remote server-side support.
During their R&D journey, Tembusu focused on “keeping it simple”. As Jarrod explains, “we also did the backend from scratch,” that is to fit into their simple and easy to use philosophy. The cash-acceptor in the machine is a high quality model; it is a Casino-grade piece of equipment sourced from Singapore and selected to complement the same philosophy.
The Bitcoin company does not exclude any location for future expansion, but they chose to start its overseas deployment in Malaysia, as the country is a major population centre and is Singapore’s direct neighbour.
Jarrod explained Tembusu does not have many competitors, where in this huge market they consider themselves their own competitor. “The market has a huge potential; too many customers to sell for,” adds Jarrod.
Tembusu Terminals, as Jarrod points out, extends the added value presented to their potential customers as being transaction costs, which is much lower than the current available options. Currently, Tembusu’s machine works based on a QR code, which carries the private key that users can use to spend their purchased bitcoins. The relatively big standalone machine offers a great addition to the general public as even a paltry sum of MYR 1.00 (Malaysian Dollar), can be used to purchase bitcoins through the machine. The machine is capable of dispensing bitcoin denominations of up to 8 decimal places.
Tembusu Terminals currently support apps for the Android market place, where many Bitcoin wallets are available compared to the iOS market, which unsurprisingly banned most Bitcoin wallet apps except for one. These mobile applications, Bitcoin wallets, can scan the QR codes provided by Tembusu machines with every purchase and that is how customers get full ownership of the bitcoins they purchase.
As of now, there are about 13 million bitcoins (XBT) in circulation worldwide and the exchange market is continuously expanding. Nevertheless, Tembusu sets itself apart from the competition because as Jarrod puts it, “We are focused on convenience, security and quality… We may not be the world’s first, but we work hard to make sure that the quality is of a different level altogether.”
XBT 1.00 = USD 420.65
SGD 1.00 = USD 0.79
MYR 1.00 = USD 0.31
–Edited by R.M.