SEOUL, South Korea, Dec. 7, 2017 /PRNewswire-USNewswire/ — EBCoin, an international cryptocurrency venture, is launching both a digital coin and a currency exchange platform to appeal to tourists. Short for Eximbay Coin, this venture focuses specifically on tourists traveling between Korea, Japan, and China, but has the potential to enhance tourism all over the world.
EBCoin seeks to address the expensive obstacles that tourists currently face when shopping abroad. Chief among these is consumption taxes. In theory, tourists can recoup the costs of these taxes through refunds, but the complexity and high cost of the refund system means that most travelers regain, at most, a fraction of the money they lost. Combined with the cost of exchanging currencies, this limits both the number of people who are willing to travel in the first place and the amount that those who do travel are willing to purchase.
By providing a decentralized platform for claiming tax refunds, EBCoin allows tourists to recoup most of the money they lose through consumption taxes. Releasing a new coin that can be exchanged for multiple other fiat and digital currencies, along with a decentralized exchange platform, further saves tourists money by reducing the cost of exchanging their money. These efforts should make it substantially easier for Korean, Japanese, Chinese, and other citizens to travel and shop across the globe.
Addressing the Limits of Tax Refunds
One of the most important factors that affects how much tourists spend when visiting other countries is those countries’ taxes. Consumption taxes often make up a large portion of national, provincial, and local government budgets. This is particularly true in European countries, where such taxes can account for upwards of 15 percent of the cost of retail goods. While consumption taxes are generally accepted as fair by citizens, who benefit directly from the services that they pay for, they are an unqualified loss to tourists. For this reason, many countries offer foreign visitors refunds on the consumption taxes they pay while in the country.
While refunds have the potential to attract more tourists, in practice, they are of limited effectiveness. This is because the system for reimbursement is so difficult. To claim a refund, tourists must record their purchase histories and present them to customs authorities in airports and other designated locations. But because there are only so many of these locations, this tends to require waiting in long lines. Combined with the complexity of filling out the necessary paperwork and making sure that their refunds are the correct sizes, this leads many tourists not to bother to claim tax refunds. As a result, roughly USD $24 billion in refunds goes unclaimed.
Even when tourists do claim their refunds, they often do not receive the full value that they deserve. The current system for processing refunds is highly expensive, consuming as much as 30 percent of the total value of tax reimbursements. This makes it less worthwhile for tourists to seek refunds in the first place.
In order to simplify refunds and lower administrative fees, EBCoin provides an app where tourists can enter all the relevant information on their own. Users must scan their passports and enter the information into the app; this confirms their identity and their country of citizenship. They can then scan the receipts from different items they buy during the trip, creating a reliable purchase history that can be used to calculate the total amount of consumption taxes they’ve paid. The platform uses this information to claim the user’s refund, which it pays to them in its own digital currency.
Because the EBCoin platform is highly decentralized, there are no intermediaries who charge fees for processing refunds. There is also no need for users to stand in line at airports or go through a complicated process of recording and verifying their purchases. More users are thus likely to claim their rightful refunds, and in doing so, they will receive close to the total value of those refunds. This has the potential to put billions of dollars back in the pockets of tourists, giving them an incentive to travel more and make more purchases abroad.
Currency Exchange & the Eximbay Coin
Besides allowing users to claim tax refunds, the EBCoin platform is releasing its own digital currency. These Eximbay coins (EBC) are backed by the Korean payment services firm KRP, which serves more than 6,000 businesses across Japan, China, Korea, and other parts of East and Southeast Asia. Many of these businesses are likely to begin accepting the coins for purchases, allowing tourists to use EBC rather than having to obtain the local currency. The EBCoin platform also allows users to exchange the coins for local currency, their home countries’ money, or other national and digital currencies.
As with refund processing, EBCoin offers a decentralized means of exchanging its own and other currencies. This eliminates intermediary fees and other currency exchange charges, lowering the cost of traveling and shopping abroad. Releasing its own currency also provides EBCoin users a standard against which to measure the value of other currencies, making it easier for them to make sure they are getting a good deal on exchanges.
EBCoin plans to create 1.5 billion of these coins, exactly half of which will be issued to the public through token sales. The platform will release 150 million of these coins during a pre-sale in December of 2017, and will then distribute 375 million during an ICO in January of 2018. The coins will initially be pegged at a value of 6,000 EBC for one ETH. This value will likely change as the platform grows in popularity and demand for Eximbay coins increases.