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August 30, 2021

OrunPay

OrunPay is a company dedicated to improving the financial inclusion and flexibility of Cubans. This is to be accomplished by putting money directly into the hands of Cuban nationals and giving them the freedom to decide what to do with it and when. Our mission was created from an enthusiasm to contribute to a vision of an open and shared global economy.

SUMMARY

OrunPay is a company created to bring financial freedom to the Cuban people. Cuba's suffering from financial isolation and a lack of financial autonomy is due the combination of an undeveloped Cuban financial sector, a government mismanagement and a strong internal focus on Cuban government-led businesses/institutions, and crippling US sanctions. Financial independence is particularly relevant today, where a choked Cuban economy, compounded by a serious decline in tourism brought on by the Covid 19 pandemic, is desperately driving the need for innovative solutions to bring fresh funds to Cuba.

 
OrunPay offers a payment platform that, while fully compliant with US and EU regulation, ensures that money reaches the hands of the Cuban people directly and outside of any government control. We do this by providing Cuban invididuals and companies with a set of tools and services that allow them to send money to each other cheaply and efficiently. Using OrunPay, Cuban individuals and companies can also manage and safekeep their wealth in a user-friendly way with considerable less risk of currency devaluation. OrunPay's solution is built around three products supported by the Stellar Network:

 

       •A non-custodial wallet - the OrunPay wallet- built to support family remittances to Cuba, as well as payments between Cuban nationals.
       •A non-custodial web application - OrunPay Connect- for cryptocurrency payment processing and corporate payments related to Cuba.
       •A propietary digital representation of the Euro - the EBI token- issued to act as a bridge currency for Cuban-related payments on Stellar.

 

OrunPay's solution is what we hope to be the first step in the digitilisation of the Cuban economy, starting with Cuban individuals and companies, and sets a new horizon to reduce the financial isolation that Cubans have suffered for more than six decades.

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SUMMARY

OrunPay is a company created to bring financial freedom to the Cuban people. Cuba's suffering from financial isolation and a lack of financial autonomy is due the combination of an undeveloped Cuban financial sector, a government mismanagement and a strong internal focus on Cuban government-led businesses/institutions, and crippling US sanctions. Financial independence is particularly relevant today, where a choked Cuban economy, compounded by a serious decline in tourism brought on by the Covid 19 pandemic, is desperately driving the need for innovative solutions to bring fresh funds to Cuba.

 
OrunPay offers a payment platform that, while fully compliant with US and EU regulation, ensures that money reaches the hands of the Cuban people directly and outside of any government control. We do this by providing Cuban invididuals and companies with a set of tools and services that allow them to send money to each other cheaply and efficiently. Using OrunPay, Cuban individuals and companies can also manage and safekeep their wealth in a user-friendly way with considerable less risk of currency devaluation. OrunPay's solution is built around three products supported by the Stellar Network:

 

       •A non-custodial wallet - the OrunPay wallet- built to support family remittances to Cuba, as well as payments between Cuban nationals.
       •A non-custodial web application - OrunPay Connect- for cryptocurrency payment processing and corporate payments related to Cuba.
       •A propietary digital representation of the Euro - the EBI token- issued to act as a bridge currency for Cuban-related payments on Stellar.

 

OrunPay's solution is what we hope to be the first step in the digitilisation of the Cuban economy, starting with Cuban individuals and companies, and sets a new horizon to reduce the financial isolation that Cubans have suffered for more than six decades.

GOAL

STEPS

 BUDGET REQUEST

GOAL

• Finalize the development of OrunPay's products during Q4 2021.

• Go live with the OrunPay platform in Q1 2022.

• Support the Cuban Peso interoperability with the EBI token in Q2 2022.

• Grow the OrunPay team, our customer base and work on a Series A funding round during Q3 and Q4 of 2022.

STEPS

Q4 2021: Preparation for the go-live phase
Our main focus during Q4 2021 would be to finalize the development and testing of all of our products. This would require us to:
       • Incorporate Ebioro B.V as a subsidiary of Orunpay B.V. in the Netherlands.
       • Obtain our registration as an Electronic Money Agent Intermediary with the Central Bank of Lithuania.
       • Issue the EBI token on the Stellar PublicNet.
       • Finalize the development of the OrunPay wallet supporting the EBI token.
       • Finalize the development of OrunPay Connect supporting the EBI token.

Q1 2022: The go-live phase
We plan to go live with our products at the beginning of the year 2022. An overview of our steps can be viewed below:
       • January: Make the Orunpay wallet and the OrunPay Connect products available on the Stellar PublicNet.
       • February: Add USDC support to the OrunPay wallet via Finclusive anchor services
       • Start integrations with Cuban liquidity providers. This phase involves a custom API integration between OrunPay and the Cuban liquidity providers because they currently don't have enough knowledge about how the Stellar Network works.

Q2-2022: Cuban currency interoperability phase
Focus on allowing our users to exchange their EBI tokens for Cuban currencies. This will be applicable for both individuals and companies (nationals or foreign) with bank accounts in the Cuban Financial system.

Q3-Q4-2022: The growth phase
Focus on growing our client base, the OrunPay team and raising more capital.

 BUDGET REQUEST:

$236,763

worth of XLM

GOAL

 BUDGET REQUEST

• Finalize the development of OrunPay's products during Q4 2021.

• Go live with the OrunPay platform in Q1 2022.

• Support the Cuban Peso interoperability with the EBI token in Q2 2022.

• Grow the OrunPay team, our customer base and work on a Series A funding round during Q3 and Q4 of 2022.

$236,763

worth of XLM

OUR REQUEST

OrunPay is hoping that the Stellar Community Fund can support us with $236,763.00, which is the budget required to launch our infrastructure around the EBI token and finalize the development of our products during Q4. We are currently evaluating other sources of investment to finance the rest of our costs for next year ($419,254.8).

OUR WORK SO FAR
We have been very busy in 2021. Here are some of the key takeaways on what we’ve worked on during the year.


•Development: As of now, OrunPay has made around 13 API integrations with different parties, including our European banking partner, KYC/KYB provider, Fireblocks and Coinqvest. Our platform is about 80% ready, and we are planning to finalize development around Q4 2021.
•Regulatory: Regulatory advisory services as well as all the documentation around our license application with the Central Bank of Lithuania demanded a considerable amount of time and resources from the founding team. We are currently waiting for the official registration in Q4 to be able to issue the EBI token on the Stellar PublicNet.
•Strategic relations: 2021 has been a productive year for nurturing relations and creating partnerships. One worth mentioning is our relationship with Fincluvise, who’s extensive expertise in the US regulatory environment will allow OrunPay to support the Cuban American market in a compliant manner. We are very excited about this partnership and are looking forward to seeing the impact it will have, giving Cuban nationals the financial independence they rightly deserve.

FINANCIAL SITUATION
The OrunPay founding team has invested approximately 201k USD in the company to date. We haven’t paid any salaries yet and the company has already spent around 95% of that budget. All the investment has been allocated to support the development work of all our products and our license application as an Electronic Money Institution Intermediary Agent with the Central Bank of Lithuania. The investment was spent as follows:
       • Regulatory advisory fees and EMI intermediary license application - $64,900.00
       • Travel costs from Europe to Cuba & Cuban expenses of OrunPay management team - $11,800.00
       • IT Hosting Fees - $9,440.00
       • Blockchain infrastructure service providers set-up and sandbox fees - $20,060.00
       • Platform development work - $94,400.00

A pie chart illustrating our investment into OrunPay up-to-date can be seen in Figure 16 by accessing the following link.

BUDGET ROADMAP DESCRIPTION
For the past 1.5 years, we have been working hard on our product suite and building key partner relationships. We also experienced several disappointments, with many European banks not wanting to support our business because we were dealing with two sensitive topics (cryptocurrencies and Cuba). Today, we are proud of what we have achieved so far and are looking forward to seeing our application live to support compliant payment transactions to Cuba. Below is an overview of our total budget roadmap. Figure 17 on the following folder which displays how we plan to allocate the proceeds from the SCF

Budget request to the SCF (EBI Token infrastructure launch and finalizing product development)

•Issuing the EBI token on the Stellar PublicNet: The issuing of the EBI token requires developing banking and blockchain infrastructures. A description of the estimated costs can be seen below:

     o Banking infrastructure: To support our banking infrastructure, we would need a budget of $103,840 for the first year of operations that will cover:
         -EMI partner fees.
         -Server and compliance IT suite for fiat transaction monitoring.
         -Identity verification provider fees.
     o Blockchain infrastructure: To support our blockchain infrastructure, we would need a budget of $82,923 for the first year of operations that will cover:
         -Fireblocks fees.
         -Coincover fees.
         -Elliptic fees

• Product Development: To finalize the development of the OrunPay wallet and OrunPay connect products respectively we would need a budget of $ 50,000

Budget not requested to the SCF that OrunPay will fund via additional investments:

• Ebioro B.V. incorporation and registration of OrunPay as an EMI intermediary: Regulation requires us to separate the entity issuing the stablecoin on the blockchain from the entity managing the corresponding fiat money, meaning we need to incorporate Ebioro B.V. as a new entity separate from OrunPay.

•Euro fiat reserves: The OrunPay founding team will deposit 80k USD for the first issuing of EBI tokens. We want to do this ourselves to accomplish the following objectives:

  o Execute transactions on the Stellar PublicNet using the Orunpay wallet and Connect products with a closed group of individuals and small-size companies. We need to test the overall time it takes for Euro deposits & withdrawals, customer support processes and compliance processes as well as other internal operations.
  o Test our market-making strategies using for the XLM/EBI pair on the Stellar DEX.


•Salaries: We have estimated a total of $287,785 for a year’s worth of salaries for the employees that will help OrunPay reach the next level. This will cover employees working in the following areas:
       • Regulatory and Compliance.
       • Marketing and Growth.
       • Operations and Finance.
       • Customer Support.
       • DevOps.

•Others
       • Marketing related activities - $36,000
       • IT Hosting Fees - $11,328.00
       • Other Operating Costs (Small office/co-working space) - $4,141.80

PROBLEM & SOLUTION

OrunPay’s mission to provide financial freedom to all Cubans was borne out of frustration over their lack of autonomy to make financial decisions. Financial independence is particularly relevant today, where a choked Cuban economy, made worse by government mismanagement, stringent US sanctions and a serious decline in tourism brought on by the Covid 19 pandemic, is driving the need for fresh funds to reach the hands of the Cuban people. This is pushing Cubans to find innovative solutions to send and receive payments, as well as to manage their personal finances.

Cubans’ lack of financial autonomy is the result of several factors, including an undeveloped financial infrastructure (i.e. payment services, investment options, borrowing capabilities, etc.), a strong internal focus on Cuban government-led businesses and financial institutions, and US sanctions which stifle the Cuban economy’s access to external markets.

The US Embargo has blocked all US companies from working with Cuba, but this has also had a serious chilling effect on non-US entities as well. While non-US companies are allowed to work in Cuba, many do not out of fear of direct or indirect US reprimand. For example, the vast majority of European banks refuse to deal in any way with Cuban transactions, even when fully compliant with all rules, as a result of heavy fines imposed on several European banks because of their Cuban dealings. Consequently, many fully owned European companies, that are by law authorized to conduct business with Cuba, cannot make payments to their Cuban counterparties because their European banks will not authorize the transactions. The same happens for payment flows exiting Cuba because the receiving banks will not accept the payments. Ironically, this chilling effect has also harshly affected the Cuban private sector despite the intention of the US sanctions legislation to encourage its growth.  Instead, most Cuban merchants and small businesses cannot accept credit card payments for products/services they wish to sell online or at a point of sale because credit card processing companies will not onboard Cuban customers.

The strong internal focus by the Cuban government on its government-led businesses also means that the foreign capital that does manage to enter Cuba through foreign investment is usually managed by other entities linked to the Cuban government, rather than by the foreign investors bringing the money in. Similarly, Cuban companies who have operations outside of Cuba face the same issue when entering foreign capital into Cuba. For both these types of companies, access to their funds is essentially given to them based on a hierarchical structure decided by Cuban government-affiliated entities. Even remittances, the largest source of income and a lifeline for many Cuban individuals, is first received by Cuban authorities before being distributed to individuals in local currency.


Throughout the years, Cubans have developed a deep mistrust towards their and government institutions and national currency, due to government mismanagement and currency devaluation as a result of many periods of economic uncertainty. Cuba is currently experiencing a drastic devaluation because of difficulties faced by the Cuban government in unifying the Cuban Peso (the official currency) with an alternative currency that has been circulating in parallel since 1994.

All of these issues have largely isolated Cuba from the world overtime, severely affecting its economic development and the financial options of its population. What remains is a chaotic, expensive and highly inefficient way of dealing with day-to-day finances for everyday Cubans and businesses. There is therefore a great need to provide a comprehensive solution that equips Cubans with the financial independence that they need.

OrunPay is developing a payment platform that places autonomy back into the hands of Cuban nationals and companies. Our solution is outside of any government control and allows Cuban individuals and companies to send and receive payments in a variety of different currencies. Additionally, Cuban nationals will have a lower level of exposure to currency devaluations because it will be possible for them to store their money in foreign-denominated stablecoins, outside the control of Cuban government financial institutions. This will all be done in a compliant manner and is what we hope to be the first step in the broader digitalization of the Cuban economy.

PRODUCTS & SERVICES

OrunPay’s solution for improving Cuban financial flexibility and inclusivity revolves around providing individuals, as well as businesses, with a set of tools and services that give them access to more stable currencies, such as the Euro, and that improves the sending and receiving of payments supported by the Stellar Network.

WHY STELLAR?      

Stellar is a blockchain network built for currencies and payments. It has a set of standards, the Stellar Ecosystem Proposals, that allow ecosystem participants (i.e. payment providers, asset issuers and wallets) to build their offerings on top of the Network in a way that ensures maximum interoperability. This means that companies providing services on the Stellar Network can move money in seconds under the same set of standards, even if they are in different regions, follow different regulatory requirements or use different local payment systems.        

The Stellar Network has allowed us to build the products that will facilitate the interaction of Cuban individuals and businesses with the global financial system. By doing this, we aim to reduce the financial isolation that Cubans have suffered from for more than six decades.

ORUNPAY'S PRODUCTS & SERVICES OFFERING

OrunPay’s current focus is on facilitating the movement of remittances from Cuban expats around the world to their families in Cuba, as well as improving the payment flows for Cuban companies. We will do this by providing three specific products and services:        

• OrunPay’s proprietary digital representation of the Euro - the EBI token - issued by our subsidiary Ebioro.      

• A non-custodial, Stellar-based mobile wallet for individuals - the OrunPay wallet.        

• A non-custodial web application for corporate cross-border payments involving Cuba - OrunPay Connect.

The EBI Token

The EBI token (EBI) will be a clawback-enabled Stellar Euro token that will be issued by Ebioro B.V., a subsidiary of OrunPay B.V. The EBI token will have three main purposes:        

• To act as a bridge currency for Cuban related payments on the Stellar Network.        

• Provide Cuban individuals and companies the possibility to hold, send or receive payments in a currency that is more stable and less exposed to devaluation compared to the Cuban Peso.        

• Guarantee Cuban currency liquidity with our Cuban financial partners - when they exchange Cuban currencies for our EBI token, they can convert it back to Euro fiat and use it for their international transactions.

Why issue a new Euro token and not use any of the available ones on the Stellar Network (i.e. EURT, EURB)?        

This was our first approach since it would be easier to implement and less expensive. However, fiat token issuers are generally licensed companies that are either a bank or work closely with banks to maintain 1:1 reserves for token redemption. Banks are therefore ultimately the parties that have control over token redemption due to their close connection to local payment systems, such as SEPA, ACH or Faster Payments. Most European banks do not onboard companies that support Cuba in any significant way or facilitate transactions to Cuba due to the considerable risk of reprimand by the US due to sanctions surrounding Cuba. Relying on a fiat Euro token supported by any of these financial institutions was consequently too risky for OrunPay.        

Another reason for issuing our proprietary Euro token was due to the discomfort felt by our Cuban liquidity providers in holding an EUR token issued by a company that they did not know and trust.

Regulatory requirements around the EBI token      

Ebioro B.V (Ebioro), a subsidiary of OrunPay B.V, will act as the sole issuer of the EBI token. Ebioro will issue the tokens at a 1:1 ratio, backed by Euro reserves deposited at our banking partner’s Ebioro account that is dedicated to stablecoin redemption. Figure 1 shows an illustration of the EBI token, as found in the following folder.

OrunPay B.V (OrunPay) will act as a Stellar anchor and distributor of the EBI token. To do this, OrunPay B.V is undergoing a registration process to act as an Electronic Money Institution (EMI) intermediary supervised by the Central Bank of Lithuania. This registration will allow OrunPay B.V to perform, among others, the following activities:        

• Allow deposits and withdrawals of fiat Euros.        

• Execute Euro payment transactions within the European region.        

• Complete money remittances.The registration also requires OrunPay to fulfill the following requirements:        

• Maintain comprehensive Compliance and AML programs.        

• Perform KYC checks for every new customer.        

• Perform ongoing transaction monitoring on the Stellar Blockchain and identify potentially high-risk Stellar addresses linked to OrunPay customers (addresses linked to scams, money laundering, etc.)Our partners supporting the issuing of the EBI token on the Stellar blockchain

Elliptic Enterprises Limited        

In addition to following standard regulatory procedures (i.e., AML/KYC, fiat transaction monitoring, etc.), regulators are starting to request that fiat token issuers ensure that blockchain wallet users depositing or redeeming the issuers’ tokens are not considered high-risk. Creating a risk profile for those wallets is a challenge, requiring a combination of different types of subject expertise (i.e., blockchain, data mining, regulatory, statistics) that OrunPay does not have.        

By using Elliptic Blockchain Analytics and Compliance tools, OrunPay has been able to combine blockchain-related monitoring activities with traditional ones related to fiat transactions, creating a more robust compliance and AML program. This partnership has helped OrunPay greatly during our discussions with regulators and financial institutions in Europe and in Cuba.

Fireblocks      

OrunPay has put a lot of effort into thinking about the management of the private keys linked to OrunPay’s Stellar accounts, including the issuer, distribution, market-making, and any other accounts we would use. We knew that we did not want to host any of the private keys on our servers since we did not deem that safe and we are not a security company. Additionally, we did not want to have the private keys stored away in cold storage because they would still be kept in a single place offline and that would greatly increase our operational tasks.        

Traditionally, the approach followed by fiat token issuers on the Stellar Network has been to keep the issuer account’s private key via cold storage techniques and the distribution account’s key via hot storage ones. Other issuers also use multisig for the issuer account as an extra layer of security, but this requires coordination between the signers for every amount of asset to issue.        

OrunPay came across Multi-Party Computation (MPC) Technology used by Fireblocks for the issuing of the EBI token and we were highly satisfied with the results. Fireblocks’ MPC technology is based on breaking up the private key of a blockchain account into multiple encrypted pieces, or shares, divided among multiple parties. The private key share that each party holds is independently computed to produce the signature of the blockchain transaction. Based on the success we experienced for the EBI token, we decided to use Fireblocks for all other activities on the OrunPay platform that require signing Stellar transactions in a secure way without compromising our private keys.Coincover        Fireblocks is a non-custodial service provider. We therefore use Coincover as a backup recovery provider that stores some of the shares of our Stellar account’s private keys from Fireblocks in the case of a disaster, such as losing our share of a private key.

The OrunPayWallet        

Most Cubans, whether expats or nationals, are non-crypto users. Before 2020, Bitcoin and other cryptocurrency usage in Cuba was almost nonexistent. The same year, Western Union, one of the largest remittance service providers in the world, cancelled its remittances services to Cuba due to its Cuban partner being sanctioned by the Trump administration, pushing Cuban expats in the US to start looking at Bitcoin as an alternative option to send remittances to their families. This, however, remains limited because cryptocurrency exchanges are not authorized by the Cuban Financial Authority and Cuban nationals don’t have any easy way to exchange the cryptocurrencies they receive for local currencies.        

We looked at several amazing wallets developed by the Stellar Community for non-crypto users, but it was difficult to find one that could satisfy our requirements. We therefore decided to build our own non-custodial wallet, giving us the opportunity to design it keeping the user experience in mind as our top priority. As such, we took advantage of the latest updates made to the Stellar Protocol and decided to handle lumen requirements on behalf of our users. Screenshots of the wallet can be seen in Figures 2-4 by accessing the following folder.    

In addition to traditional wallet features, the OrunPay wallet will be supporting:        

• Sponsored reserves: OrunPay wallet users won’t need to go to an external crypto exchange to buy Stellar Lumens to create their Stellar account on the Network, or for creating trust lines for assets issued by Stellar.  These operations will be fully sponsored by OrunPay.      

•Claimable balances: The OrunPay wallet will support claimable balances by default when interacting with Stellar Anchors via SEP-006 or SEP-0024. Claimable balances will be displayed in the transactions overview and could be claimed easily by the user. Claiming a balance will create an atomic transaction containing the operations for sponsoring the trustline, the trustline creation and the balance claim.        

•Fee bumps: Stellar network fees will be paid by accounts hosted by OrunPay.      

•Other wallet functionalities:                

- It will allow users to buy Lumens directly using several payment methods (i.e. SEPA, credit cards and Apple Pay).                

- It will support SEP-006, SEP-007, SEP-0010 and SEP-0024.              

- It will allow users to trade wallet supported assets on the Stellar Decentralized Exchange.

How  can the OrunPay wallet support Cuban individuals?

As a first step, we expect Cuban expats around the world to use the OrunPay wallet to send remittances to their families in Cuba. A high-level workflow of this step and what follows is explained in greater detail below:        

1. Cuban expats living in the US or in Europe, for example, can download the OrunPay wallet and proceed to go through KYC.        

2. After KYC verification, Cuban expats from Europe can add EBI tokens into their wallet by sending fiat Euros to OrunPay via OrunPay’s anchor service. Similarly, the Cuban expat living in the US can top-up the wallet with USDC. This will be done via our partnership with Finclusive (see next section).        

3. The Cuban expat in Europe can send the EBI token directly to his/her family member in Cuba who also has an OrunPay wallet. The Cuban expat living in the US will send USDC and his/her family member will receive EBI tokens. This is because Cuban nationals will not be able to exchange USDC with our Cuban liquidity providers. The OrunPay wallet will therefore use the path payment operation going through the following path: USDC->XLM->EBI.        

4. Once the EBI token in hand, the Cuban national will have the freedom to choose what to do. He or she could:                

a. Keep the EBI token in his/her wallet and use it to pay other people that also have a Stellar compatible wallet.                

b. Exchange the EBI token for a Cuban currency in his/her Cuban bank account via one of our Cuban liquidity providers.                

c. Pay at a restaurant or other merchant that is using the OrunPay Connect product.

Finclusive - our partner supporting the Cuban American market while adhering to US regulation      

The Cuban expat community faces multiple challenges to send money to their families in Cuba due to the reluctance most banks, including non-US ones, face to authorize transactions to Cuba, as mentioned earlier. US sanctions targeting Cuba are administered by The Department of the Treasury’s Office of Foreign Assets Control (OFAC), providing guidelines about what can and cannot be done regarding payment transactions from the US to Cuba in their Cuban Assets Control Regulation (CACR). A key point to mention here regarding CACR is that payments to Cuba from the US are not strictly forbidden, but rather need to fall under specific categories that are authorized by OFAC. For example, “family remittances” is a category that is authorized as long as the remittance amount is under a certain threshold and is not distributed in Cuba by entities affiliated with the Cuban military, among others. The intention of this measure is to ensure that most of the funds from the remittance are received by the Cuban national directly, without any intervention by of Cuban companies that are sanctioned by OFAC.        

Complying with these measures using traditional financial infrastructure is very difficult, however. Most remittances entering Cuba are handled and distributed into Cuban bank accounts through a tightly controlled chain of companies associated with the Cuban military. This was the reason why Western Union withdrew their services to Cuba in 2020, after 20 years of supporting money remittances to the island. The Cuban expat community in the US, approximately 1.35 million, relied almost exclusively on Western Union to send funds to their loved ones in Cuba.        

Supporting use-cases like this one is a great fit for the Stellar Network, where funds can flow directly from the wallet of a Cuban American to the wallet of the Cuban national without any intermediaries in seconds. However, we wanted to ensure that we were building a solution for the Cuban American community that followed OFAC guidelines and decided to partner with Finclusive. Finclusive is a Compliance-as-a-Service (CaaS) provider that specializes in empowering the underbanked around the world. Finclusive’s team have a strong track record concerning complicated compliance issues and have vast expertise surrounding US regulations, making them a great fit for us. OrunPay will be using Finclusive’s compliance platform and its USDC anchor services to allow deposits and withdrawals of USDC in the OrunPay wallet for Cuban Americans while complying with OFAC regulation.

OrunPay Connect        

OrunPay Connect was created to tackle the payment challenges facing Cuban companies and merchants, as described in the Problem and Solution section. It is a non-custodial web application that allows Cuban companies send and receive payments using the EBI token as their underlying asset. Foreign non-European based companies will in the future also create an account and deposit fiat money in exchange for a corresponding fiat token from their respective Stellar local anchors (i.e. US Dollar -> USDC). Our initial plan is to first start supporting European companies by providing on/off ramping of the Euro with the EBI token. After that, we will integrate other Stellar anchors to the OrunPay Connect application so that non-European companies doing business with Cuba can also use our service. Screenshots of OrunPay Connect can be seen in Figures 5-13 by accessing the following link.

How can OrunPay Connect supports Cuban companies?Initially, OrunPay Connect will support two types of payments. Namelly, inflow and outflow of payments for Cuban Companies and Cryptocurrency payment processing for Cuban merchantsCuban company inflow and outflow payment example      

1. A European company that needs to make a payment to its Cuban counterparty registers with OrunPay Connect and fulfills Know Your Business (KYB) requirements to deposit Euros and receive EBI tokens.        

2. The European company can then make a payment in EBI tokens to its Cuban counterparty that also has an OrunPay Connect account.        

3. The Cuban company can either:

                a. Exchange the EBI tokens for a Cuban currency via one of OrunPay’s Cuban liquidity providers.

               b. Hold the EBI tokens and use them to make a payment to:

                        i. A European provider that can redeem the EBI tokens for fiat Euros via Orunpay’s anchor services (subject to KYB requirements).

                       ii. A Mexican provider, for example, that would receive Mexican Pesos via a Path Payment Operation using the Stellar DEX.

Cryptocurrency payment processing example for Cuban merchants

Cuban merchants could use OrunPay Connect to receive online payments in any cryptocurrency or Stellar-based stablecoin the application supports.

The process works as follows:        

1. Cuban merchants can register first with OrunPay Connect as a standard business. Upon successful registration, they can use OrunPay Connect to send and receive payments to/from any other Stellar account. This is called the Business Main Account.        

2. To activate a merchant account, the merchant can open a support ticket directly from the OrunPay application itself. The OrunPay support team will then set up the merchant account after requesting extra information from the merchant. From a technical point of view, the merchant account is essentially a new Stellar account linked to the business applying for the merchant services.        

3. Successful merchant registration will activate the merchant section in the OrunPay Connect application, which will display:

               a. An account section, where the merchant can see all payment transactions received. Payments received in the Merchant Account can be easily transferred to the Business Main Account by simply pressing a transfer button.

                b. A section where the merchant can manage the API keys necessary to interact with the OrunPay merchant API.        

4. With the OrunPay merchant API keys, the Cuban merchant can then integrate the OrunPay payment widget into his/her website and start accepting cryptocurrency payments settled in EBI tokens in his/her Merchant Account.

Coinqvest - OrunPay's partner supporting cryptocurrency payments for Cuban merchants        

OrunPay heard about the Coinqvest team just after the announcement of the SCF Round 7 winners. At the time, we were just about to start developing our own crypto payment processing solution for merchants and were quite happy to learn that this was not needed anymore. Coinqvest’s great product has allowed us to reduce our development work from several months to just a couple of weeks. We only needed to built our own checkout widget on top of Coinqvest’s services, and our Cuban merchants will soon be able to accept online cryptocurrency payments that will automatically settle with the EBI token in their OrunPay merchant account.

OrunPay Connect’s non-custodial approach        

Building a non-custodial solution tailored to businesses requires different features compared to building a non-custodial wallet for individuals. More specifically, businesses are used to logging in and registering for applications using the username/password approach, making it difficult to change this behavior. In addition, a business will not accept to rely solely on a backup/seed phrase as the only security measure that protects its funds.         For OrunPay, designing a non-custodial platform that fulfills these requirements was particularly challenging considering that our customers would be traditional businesses unfamiliar with blockchain technology        

We therefore spent a great deal of time working on the application’s UI to create a seamless experience for traditional businesses with little crypto knowledge. Coupled with Fireblocks’ MPC Technology, we could build a non-custodial solution more suitably designed for non-crypto businesses while fulfilling their security needs.

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PRODUCTS & SERVICES

OrunPay’s solution for improving Cuban financial flexibility and inclusivity revolves around providing individuals, as well as businesses, with a set of tools and services that give them access to more stable currencies, such as the Euro, and that improves the sending and receiving of payments supported by the Stellar Network.

WHY STELLAR?      

Stellar is a blockchain network built for currencies and payments. It has a set of standards, the Stellar Ecosystem Proposals, that allow ecosystem participants (i.e. payment providers, asset issuers and wallets) to build their offerings on top of the Network in a way that ensures maximum interoperability. This means that companies providing services on the Stellar Network can move money in seconds under the same set of standards, even if they are in different regions, follow different regulatory requirements or use different local payment systems.        

The Stellar Network has allowed us to build the products that will facilitate the interaction of Cuban individuals and businesses with the global financial system. By doing this, we aim to reduce the financial isolation that Cubans have suffered from for more than six decades.

ORUNPAY'S PRODUCTS & SERVICES OFFERING

OrunPay’s current focus is on facilitating the movement of remittances from Cuban expats around the world to their families in Cuba, as well as improving the payment flows for Cuban companies. We will do this by providing three specific products and services:        

• OrunPay’s proprietary digital representation of the Euro - the EBI token - issued by our subsidiary Ebioro.      

• A non-custodial, Stellar-based mobile wallet for individuals - the OrunPay wallet.        

• A non-custodial web application for corporate cross-border payments involving Cuba - OrunPay Connect.

The EBI Token

The EBI token (EBI) will be a clawback-enabled Stellar Euro token that will be issued by Ebioro B.V., a subsidiary of OrunPay B.V. The EBI token will have three main purposes:        

• To act as a bridge currency for Cuban related payments on the Stellar Network.        

• Provide Cuban individuals and companies the possibility to hold, send or receive payments in a currency that is more stable and less exposed to devaluation compared to the Cuban Peso.        

• Guarantee Cuban currency liquidity with our Cuban financial partners - when they exchange Cuban currencies for our EBI token, they can convert it back to Euro fiat and use it for their international transactions.

Why issue a new Euro token and not use any of the available ones on the Stellar Network (i.e. EURT, EURB)?        

This was our first approach since it would be easier to implement and less expensive. However, fiat token issuers are generally licensed companies that are either a bank or work closely with banks to maintain 1:1 reserves for token redemption. Banks are therefore ultimately the parties that have control over token redemption due to their close connection to local payment systems, such as SEPA, ACH or Faster Payments. Most European banks do not onboard companies that support Cuba in any significant way or facilitate transactions to Cuba due to the considerable risk of reprimand by the US due to sanctions surrounding Cuba. Relying on a fiat Euro token supported by any of these financial institutions was consequently too risky for OrunPay.        

Another reason for issuing our proprietary Euro token was due to the discomfort felt by our Cuban liquidity providers in holding an EUR token issued by a company that they did not know and trust.

Regulatory requirements around the EBI token      

Ebioro B.V (Ebioro), a subsidiary of OrunPay B.V, will act as the sole issuer of the EBI token. Ebioro will issue the tokens at a 1:1 ratio, backed by Euro reserves deposited at our banking partner’s Ebioro account that is dedicated to stablecoin redemption. Figure 1 shows an illustration of the EBI token, as found in the following folder.

OrunPay B.V (OrunPay) will act as a Stellar anchor and distributor of the EBI token. To do this, OrunPay B.V is undergoing a registration process to act as an Electronic Money Institution (EMI) intermediary supervised by the Central Bank of Lithuania. This registration will allow OrunPay B.V to perform, among others, the following activities:        

• Allow deposits and withdrawals of fiat Euros.        

• Execute Euro payment transactions within the European region.        

• Complete money remittances.The registration also requires OrunPay to fulfill the following requirements:        

• Maintain comprehensive Compliance and AML programs.        

• Perform KYC checks for every new customer.        

• Perform ongoing transaction monitoring on the Stellar Blockchain and identify potentially high-risk Stellar addresses linked to OrunPay customers (addresses linked to scams, money laundering, etc.)Our partners supporting the issuing of the EBI token on the Stellar blockchain

Elliptic Enterprises Limited        

In addition to following standard regulatory procedures (i.e., AML/KYC, fiat transaction monitoring, etc.), regulators are starting to request that fiat token issuers ensure that blockchain wallet users depositing or redeeming the issuers’ tokens are not considered high-risk. Creating a risk profile for those wallets is a challenge, requiring a combination of different types of subject expertise (i.e., blockchain, data mining, regulatory, statistics) that OrunPay does not have.        

By using Elliptic Blockchain Analytics and Compliance tools, OrunPay has been able to combine blockchain-related monitoring activities with traditional ones related to fiat transactions, creating a more robust compliance and AML program. This partnership has helped OrunPay greatly during our discussions with regulators and financial institutions in Europe and in Cuba.

Fireblocks      

OrunPay has put a lot of effort into thinking about the management of the private keys linked to OrunPay’s Stellar accounts, including the issuer, distribution, market-making, and any other accounts we would use. We knew that we did not want to host any of the private keys on our servers since we did not deem that safe and we are not a security company. Additionally, we did not want to have the private keys stored away in cold storage because they would still be kept in a single place offline and that would greatly increase our operational tasks.        

Traditionally, the approach followed by fiat token issuers on the Stellar Network has been to keep the issuer account’s private key via cold storage techniques and the distribution account’s key via hot storage ones. Other issuers also use multisig for the issuer account as an extra layer of security, but this requires coordination between the signers for every amount of asset to issue.        

OrunPay came across Multi-Party Computation (MPC) Technology used by Fireblocks for the issuing of the EBI token and we were highly satisfied with the results. Fireblocks’ MPC technology is based on breaking up the private key of a blockchain account into multiple encrypted pieces, or shares, divided among multiple parties. The private key share that each party holds is independently computed to produce the signature of the blockchain transaction. Based on the success we experienced for the EBI token, we decided to use Fireblocks for all other activities on the OrunPay platform that require signing Stellar transactions in a secure way without compromising our private keys.Coincover        Fireblocks is a non-custodial service provider. We therefore use Coincover as a backup recovery provider that stores some of the shares of our Stellar account’s private keys from Fireblocks in the case of a disaster, such as losing our share of a private key.

The OrunPayWallet        

Most Cubans, whether expats or nationals, are non-crypto users. Before 2020, Bitcoin and other cryptocurrency usage in Cuba was almost nonexistent. The same year, Western Union, one of the largest remittance service providers in the world, cancelled its remittances services to Cuba due to its Cuban partner being sanctioned by the Trump administration, pushing Cuban expats in the US to start looking at Bitcoin as an alternative option to send remittances to their families. This, however, remains limited because cryptocurrency exchanges are not authorized by the Cuban Financial Authority and Cuban nationals don’t have any easy way to exchange the cryptocurrencies they receive for local currencies.        

We looked at several amazing wallets developed by the Stellar Community for non-crypto users, but it was difficult to find one that could satisfy our requirements. We therefore decided to build our own non-custodial wallet, giving us the opportunity to design it keeping the user experience in mind as our top priority. As such, we took advantage of the latest updates made to the Stellar Protocol and decided to handle lumen requirements on behalf of our users. Screenshots of the wallet can be seen in Figures 2-4 by accessing the following folder.    

In addition to traditional wallet features, the OrunPay wallet will be supporting:        

• Sponsored reserves: OrunPay wallet users won’t need to go to an external crypto exchange to buy Stellar Lumens to create their Stellar account on the Network, or for creating trust lines for assets issued by Stellar.  These operations will be fully sponsored by OrunPay.      

•Claimable balances: The OrunPay wallet will support claimable balances by default when interacting with Stellar Anchors via SEP-006 or SEP-0024. Claimable balances will be displayed in the transactions overview and could be claimed easily by the user. Claiming a balance will create an atomic transaction containing the operations for sponsoring the trustline, the trustline creation and the balance claim.        

•Fee bumps: Stellar network fees will be paid by accounts hosted by OrunPay.      

•Other wallet functionalities:                

- It will allow users to buy Lumens directly using several payment methods (i.e. SEPA, credit cards and Apple Pay).                

- It will support SEP-006, SEP-007, SEP-0010 and SEP-0024.              

- It will allow users to trade wallet supported assets on the Stellar Decentralized Exchange.

How  can the OrunPay wallet support Cuban individuals?

As a first step, we expect Cuban expats around the world to use the OrunPay wallet to send remittances to their families in Cuba. A high-level workflow of this step and what follows is explained in greater detail below:        

1. Cuban expats living in the US or in Europe, for example, can download the OrunPay wallet and proceed to go through KYC.        

2. After KYC verification, Cuban expats from Europe can add EBI tokens into their wallet by sending fiat Euros to OrunPay via OrunPay’s anchor service. Similarly, the Cuban expat living in the US can top-up the wallet with USDC. This will be done via our partnership with Finclusive (see next section).        

3. The Cuban expat in Europe can send the EBI token directly to his/her family member in Cuba who also has an OrunPay wallet. The Cuban expat living in the US will send USDC and his/her family member will receive EBI tokens. This is because Cuban nationals will not be able to exchange USDC with our Cuban liquidity providers. The OrunPay wallet will therefore use the path payment operation going through the following path: USDC->XLM->EBI.        

4. Once the EBI token in hand, the Cuban national will have the freedom to choose what to do. He or she could:                

a. Keep the EBI token in his/her wallet and use it to pay other people that also have a Stellar compatible wallet.                

b. Exchange the EBI token for a Cuban currency in his/her Cuban bank account via one of our Cuban liquidity providers.                

c. Pay at a restaurant or other merchant that is using the OrunPay Connect product.

Finclusive - our partner supporting the Cuban American market while adhering to US regulation      

The Cuban expat community faces multiple challenges to send money to their families in Cuba due to the reluctance most banks, including non-US ones, face to authorize transactions to Cuba, as mentioned earlier. US sanctions targeting Cuba are administered by The Department of the Treasury’s Office of Foreign Assets Control (OFAC), providing guidelines about what can and cannot be done regarding payment transactions from the US to Cuba in their Cuban Assets Control Regulation (CACR). A key point to mention here regarding CACR is that payments to Cuba from the US are not strictly forbidden, but rather need to fall under specific categories that are authorized by OFAC. For example, “family remittances” is a category that is authorized as long as the remittance amount is under a certain threshold and is not distributed in Cuba by entities affiliated with the Cuban military, among others. The intention of this measure is to ensure that most of the funds from the remittance are received by the Cuban national directly, without any intervention by of Cuban companies that are sanctioned by OFAC.        

Complying with these measures using traditional financial infrastructure is very difficult, however. Most remittances entering Cuba are handled and distributed into Cuban bank accounts through a tightly controlled chain of companies associated with the Cuban military. This was the reason why Western Union withdrew their services to Cuba in 2020, after 20 years of supporting money remittances to the island. The Cuban expat community in the US, approximately 1.35 million, relied almost exclusively on Western Union to send funds to their loved ones in Cuba.        

Supporting use-cases like this one is a great fit for the Stellar Network, where funds can flow directly from the wallet of a Cuban American to the wallet of the Cuban national without any intermediaries in seconds. However, we wanted to ensure that we were building a solution for the Cuban American community that followed OFAC guidelines and decided to partner with Finclusive. Finclusive is a Compliance-as-a-Service (CaaS) provider that specializes in empowering the underbanked around the world. Finclusive’s team have a strong track record concerning complicated compliance issues and have vast expertise surrounding US regulations, making them a great fit for us. OrunPay will be using Finclusive’s compliance platform and its USDC anchor services to allow deposits and withdrawals of USDC in the OrunPay wallet for Cuban Americans while complying with OFAC regulation.

OrunPay Connect        

OrunPay Connect was created to tackle the payment challenges facing Cuban companies and merchants, as described in the Problem and Solution section. It is a non-custodial web application that allows Cuban companies send and receive payments using the EBI token as their underlying asset. Foreign non-European based companies will in the future also create an account and deposit fiat money in exchange for a corresponding fiat token from their respective Stellar local anchors (i.e. US Dollar -> USDC). Our initial plan is to first start supporting European companies by providing on/off ramping of the Euro with the EBI token. After that, we will integrate other Stellar anchors to the OrunPay Connect application so that non-European companies doing business with Cuba can also use our service. Screenshots of OrunPay Connect can be seen in Figures 5-13 by accessing the following link.

How can OrunPay Connect supports Cuban companies?Initially, OrunPay Connect will support two types of payments. Namelly, inflow and outflow of payments for Cuban Companies and Cryptocurrency payment processing for Cuban merchantsCuban company inflow and outflow payment example      

1. A European company that needs to make a payment to its Cuban counterparty registers with OrunPay Connect and fulfills Know Your Business (KYB) requirements to deposit Euros and receive EBI tokens.        

2. The European company can then make a payment in EBI tokens to its Cuban counterparty that also has an OrunPay Connect account.        

3. The Cuban company can either:

                a. Exchange the EBI tokens for a Cuban currency via one of OrunPay’s Cuban liquidity providers.

               b. Hold the EBI tokens and use them to make a payment to:

                        i. A European provider that can redeem the EBI tokens for fiat Euros via Orunpay’s anchor services (subject to KYB requirements).

                       ii. A Mexican provider, for example, that would receive Mexican Pesos via a Path Payment Operation using the Stellar DEX.

Cryptocurrency payment processing example for Cuban merchants

Cuban merchants could use OrunPay Connect to receive online payments in any cryptocurrency or Stellar-based stablecoin the application supports.

The process works as follows:        

1. Cuban merchants can register first with OrunPay Connect as a standard business. Upon successful registration, they can use OrunPay Connect to send and receive payments to/from any other Stellar account. This is called the Business Main Account.        

2. To activate a merchant account, the merchant can open a support ticket directly from the OrunPay application itself. The OrunPay support team will then set up the merchant account after requesting extra information from the merchant. From a technical point of view, the merchant account is essentially a new Stellar account linked to the business applying for the merchant services.        

3. Successful merchant registration will activate the merchant section in the OrunPay Connect application, which will display:

               a. An account section, where the merchant can see all payment transactions received. Payments received in the Merchant Account can be easily transferred to the Business Main Account by simply pressing a transfer button.

                b. A section where the merchant can manage the API keys necessary to interact with the OrunPay merchant API.        

4. With the OrunPay merchant API keys, the Cuban merchant can then integrate the OrunPay payment widget into his/her website and start accepting cryptocurrency payments settled in EBI tokens in his/her Merchant Account.

Coinqvest - OrunPay's partner supporting cryptocurrency payments for Cuban merchants        

OrunPay heard about the Coinqvest team just after the announcement of the SCF Round 7 winners. At the time, we were just about to start developing our own crypto payment processing solution for merchants and were quite happy to learn that this was not needed anymore. Coinqvest’s great product has allowed us to reduce our development work from several months to just a couple of weeks. We only needed to built our own checkout widget on top of Coinqvest’s services, and our Cuban merchants will soon be able to accept online cryptocurrency payments that will automatically settle with the EBI token in their OrunPay merchant account.

OrunPay Connect’s non-custodial approach        

Building a non-custodial solution tailored to businesses requires different features compared to building a non-custodial wallet for individuals. More specifically, businesses are used to logging in and registering for applications using the username/password approach, making it difficult to change this behavior. In addition, a business will not accept to rely solely on a backup/seed phrase as the only security measure that protects its funds.         For OrunPay, designing a non-custodial platform that fulfills these requirements was particularly challenging considering that our customers would be traditional businesses unfamiliar with blockchain technology        

We therefore spent a great deal of time working on the application’s UI to create a seamless experience for traditional businesses with little crypto knowledge. Coupled with Fireblocks’ MPC Technology, we could build a non-custodial solution more suitably designed for non-crypto businesses while fulfilling their security needs.

PRODUCTS & SERVICES

OrunPay’s solution for improving Cuban financial flexibility and inclusivity revolves around providing individuals, as well as businesses, with a set of tools and services that give them access to more stable currencies, such as the Euro, and that improves the sending and receiving of payments supported by the Stellar Network.

WHY STELLAR?      

Stellar is a blockchain network built for currencies and payments. It has a set of standards, the Stellar Ecosystem Proposals, that allow ecosystem participants (i.e. payment providers, asset issuers and wallets) to build their offerings on top of the Network in a way that ensures maximum interoperability. This means that companies providing services on the Stellar Network can move money in seconds under the same set of standards, even if they are in different regions, follow different regulatory requirements or use different local payment systems.        

The Stellar Network has allowed us to build the products that will facilitate the interaction of Cuban individuals and businesses with the global financial system. By doing this, we aim to reduce the financial isolation that Cubans have suffered from for more than six decades.

ORUNPAY'S PRODUCTS & SERVICES OFFERING

OrunPay’s current focus is on facilitating the movement of remittances from Cuban expats around the world to their families in Cuba, as well as improving the payment flows for Cuban companies. We will do this by providing three specific products and services:        

• OrunPay’s proprietary digital representation of the Euro - the EBI token - issued by our subsidiary Ebioro.      

• A non-custodial, Stellar-based mobile wallet for individuals - the OrunPay wallet.        

• A non-custodial web application for corporate cross-border payments involving Cuba - OrunPay Connect.

The EBI Token

The EBI token (EBI) will be a clawback-enabled Stellar Euro token that will be issued by Ebioro B.V., a subsidiary of OrunPay B.V. The EBI token will have three main purposes:        

• To act as a bridge currency for Cuban related payments on the Stellar Network.        

• Provide Cuban individuals and companies the possibility to hold, send or receive payments in a currency that is more stable and less exposed to devaluation compared to the Cuban Peso.        

• Guarantee Cuban currency liquidity with our Cuban financial partners - when they exchange Cuban currencies for our EBI token, they can convert it back to Euro fiat and use it for their international transactions.

Why issue a new Euro token and not use any of the available ones on the Stellar Network (i.e. EURT, EURB)?        

This was our first approach since it would be easier to implement and less expensive. However, fiat token issuers are generally licensed companies that are either a bank or work closely with banks to maintain 1:1 reserves for token redemption. Banks are therefore ultimately the parties that have control over token redemption due to their close connection to local payment systems, such as SEPA, ACH or Faster Payments. Most European banks do not onboard companies that support Cuba in any significant way or facilitate transactions to Cuba due to the considerable risk of reprimand by the US due to sanctions surrounding Cuba. Relying on a fiat Euro token supported by any of these financial institutions was consequently too risky for OrunPay.        

Another reason for issuing our proprietary Euro token was due to the discomfort felt by our Cuban liquidity providers in holding an EUR token issued by a company that they did not know and trust.

Regulatory requirements around the EBI token      

Ebioro B.V (Ebioro), a subsidiary of OrunPay B.V, will act as the sole issuer of the EBI token. Ebioro will issue the tokens at a 1:1 ratio, backed by Euro reserves deposited at our banking partner’s Ebioro account that is dedicated to stablecoin redemption. Figure 1 shows an illustration of the EBI token, as found in the following folder.

OrunPay B.V (OrunPay) will act as a Stellar anchor and distributor of the EBI token. To do this, OrunPay B.V is undergoing a registration process to act as an Electronic Money Institution (EMI) intermediary supervised by the Central Bank of Lithuania. This registration will allow OrunPay B.V to perform, among others, the following activities:        

• Allow deposits and withdrawals of fiat Euros.        

• Execute Euro payment transactions within the European region.        

• Complete money remittances.The registration also requires OrunPay to fulfill the following requirements:        

• Maintain comprehensive Compliance and AML programs.        

• Perform KYC checks for every new customer.        

• Perform ongoing transaction monitoring on the Stellar Blockchain and identify potentially high-risk Stellar addresses linked to OrunPay customers (addresses linked to scams, money laundering, etc.)Our partners supporting the issuing of the EBI token on the Stellar blockchain

Elliptic Enterprises Limited        

In addition to following standard regulatory procedures (i.e., AML/KYC, fiat transaction monitoring, etc.), regulators are starting to request that fiat token issuers ensure that blockchain wallet users depositing or redeeming the issuers’ tokens are not considered high-risk. Creating a risk profile for those wallets is a challenge, requiring a combination of different types of subject expertise (i.e., blockchain, data mining, regulatory, statistics) that OrunPay does not have.        

By using Elliptic Blockchain Analytics and Compliance tools, OrunPay has been able to combine blockchain-related monitoring activities with traditional ones related to fiat transactions, creating a more robust compliance and AML program. This partnership has helped OrunPay greatly during our discussions with regulators and financial institutions in Europe and in Cuba.

Fireblocks      

OrunPay has put a lot of effort into thinking about the management of the private keys linked to OrunPay’s Stellar accounts, including the issuer, distribution, market-making, and any other accounts we would use. We knew that we did not want to host any of the private keys on our servers since we did not deem that safe and we are not a security company. Additionally, we did not want to have the private keys stored away in cold storage because they would still be kept in a single place offline and that would greatly increase our operational tasks.        

Traditionally, the approach followed by fiat token issuers on the Stellar Network has been to keep the issuer account’s private key via cold storage techniques and the distribution account’s key via hot storage ones. Other issuers also use multisig for the issuer account as an extra layer of security, but this requires coordination between the signers for every amount of asset to issue.        

OrunPay came across Multi-Party Computation (MPC) Technology used by Fireblocks for the issuing of the EBI token and we were highly satisfied with the results. Fireblocks’ MPC technology is based on breaking up the private key of a blockchain account into multiple encrypted pieces, or shares, divided among multiple parties. The private key share that each party holds is independently computed to produce the signature of the blockchain transaction. Based on the success we experienced for the EBI token, we decided to use Fireblocks for all other activities on the OrunPay platform that require signing Stellar transactions in a secure way without compromising our private keys.Coincover        Fireblocks is a non-custodial service provider. We therefore use Coincover as a backup recovery provider that stores some of the shares of our Stellar account’s private keys from Fireblocks in the case of a disaster, such as losing our share of a private key.

The OrunPayWallet        

Most Cubans, whether expats or nationals, are non-crypto users. Before 2020, Bitcoin and other cryptocurrency usage in Cuba was almost nonexistent. The same year, Western Union, one of the largest remittance service providers in the world, cancelled its remittances services to Cuba due to its Cuban partner being sanctioned by the Trump administration, pushing Cuban expats in the US to start looking at Bitcoin as an alternative option to send remittances to their families. This, however, remains limited because cryptocurrency exchanges are not authorized by the Cuban Financial Authority and Cuban nationals don’t have any easy way to exchange the cryptocurrencies they receive for local currencies.        

We looked at several amazing wallets developed by the Stellar Community for non-crypto users, but it was difficult to find one that could satisfy our requirements. We therefore decided to build our own non-custodial wallet, giving us the opportunity to design it keeping the user experience in mind as our top priority. As such, we took advantage of the latest updates made to the Stellar Protocol and decided to handle lumen requirements on behalf of our users. Screenshots of the wallet can be seen in Figures 2-4 by accessing the following folder.    

In addition to traditional wallet features, the OrunPay wallet will be supporting:        

• Sponsored reserves: OrunPay wallet users won’t need to go to an external crypto exchange to buy Stellar Lumens to create their Stellar account on the Network, or for creating trust lines for assets issued by Stellar.  These operations will be fully sponsored by OrunPay.      

•Claimable balances: The OrunPay wallet will support claimable balances by default when interacting with Stellar Anchors via SEP-006 or SEP-0024. Claimable balances will be displayed in the transactions overview and could be claimed easily by the user. Claiming a balance will create an atomic transaction containing the operations for sponsoring the trustline, the trustline creation and the balance claim.        

•Fee bumps: Stellar network fees will be paid by accounts hosted by OrunPay.      

•Other wallet functionalities:                

- It will allow users to buy Lumens directly using several payment methods (i.e. SEPA, credit cards and Apple Pay).                

- It will support SEP-006, SEP-007, SEP-0010 and SEP-0024.              

- It will allow users to trade wallet supported assets on the Stellar Decentralized Exchange.

How  can the OrunPay wallet support Cuban individuals?

As a first step, we expect Cuban expats around the world to use the OrunPay wallet to send remittances to their families in Cuba. A high-level workflow of this step and what follows is explained in greater detail below:        

1. Cuban expats living in the US or in Europe, for example, can download the OrunPay wallet and proceed to go through KYC.        

2. After KYC verification, Cuban expats from Europe can add EBI tokens into their wallet by sending fiat Euros to OrunPay via OrunPay’s anchor service. Similarly, the Cuban expat living in the US can top-up the wallet with USDC. This will be done via our partnership with Finclusive (see next section).        

3. The Cuban expat in Europe can send the EBI token directly to his/her family member in Cuba who also has an OrunPay wallet. The Cuban expat living in the US will send USDC and his/her family member will receive EBI tokens. This is because Cuban nationals will not be able to exchange USDC with our Cuban liquidity providers. The OrunPay wallet will therefore use the path payment operation going through the following path: USDC->XLM->EBI.        

4. Once the EBI token in hand, the Cuban national will have the freedom to choose what to do. He or she could:                

a. Keep the EBI token in his/her wallet and use it to pay other people that also have a Stellar compatible wallet.                

b. Exchange the EBI token for a Cuban currency in his/her Cuban bank account via one of our Cuban liquidity providers.                

c. Pay at a restaurant or other merchant that is using the OrunPay Connect product.

Finclusive - our partner supporting the Cuban American market while adhering to US regulation      

The Cuban expat community faces multiple challenges to send money to their families in Cuba due to the reluctance most banks, including non-US ones, face to authorize transactions to Cuba, as mentioned earlier. US sanctions targeting Cuba are administered by The Department of the Treasury’s Office of Foreign Assets Control (OFAC), providing guidelines about what can and cannot be done regarding payment transactions from the US to Cuba in their Cuban Assets Control Regulation (CACR). A key point to mention here regarding CACR is that payments to Cuba from the US are not strictly forbidden, but rather need to fall under specific categories that are authorized by OFAC. For example, “family remittances” is a category that is authorized as long as the remittance amount is under a certain threshold and is not distributed in Cuba by entities affiliated with the Cuban military, among others. The intention of this measure is to ensure that most of the funds from the remittance are received by the Cuban national directly, without any intervention by of Cuban companies that are sanctioned by OFAC.        

Complying with these measures using traditional financial infrastructure is very difficult, however. Most remittances entering Cuba are handled and distributed into Cuban bank accounts through a tightly controlled chain of companies associated with the Cuban military. This was the reason why Western Union withdrew their services to Cuba in 2020, after 20 years of supporting money remittances to the island. The Cuban expat community in the US, approximately 1.35 million, relied almost exclusively on Western Union to send funds to their loved ones in Cuba.        

Supporting use-cases like this one is a great fit for the Stellar Network, where funds can flow directly from the wallet of a Cuban American to the wallet of the Cuban national without any intermediaries in seconds. However, we wanted to ensure that we were building a solution for the Cuban American community that followed OFAC guidelines and decided to partner with Finclusive. Finclusive is a Compliance-as-a-Service (CaaS) provider that specializes in empowering the underbanked around the world. Finclusive’s team have a strong track record concerning complicated compliance issues and have vast expertise surrounding US regulations, making them a great fit for us. OrunPay will be using Finclusive’s compliance platform and its USDC anchor services to allow deposits and withdrawals of USDC in the OrunPay wallet for Cuban Americans while complying with OFAC regulation.

OrunPay Connect        

OrunPay Connect was created to tackle the payment challenges facing Cuban companies and merchants, as described in the Problem and Solution section. It is a non-custodial web application that allows Cuban companies send and receive payments using the EBI token as their underlying asset. Foreign non-European based companies will in the future also create an account and deposit fiat money in exchange for a corresponding fiat token from their respective Stellar local anchors (i.e. US Dollar -> USDC). Our initial plan is to first start supporting European companies by providing on/off ramping of the Euro with the EBI token. After that, we will integrate other Stellar anchors to the OrunPay Connect application so that non-European companies doing business with Cuba can also use our service. Screenshots of OrunPay Connect can be seen in Figures 5-13 by accessing the following link.

How can OrunPay Connect supports Cuban companies?Initially, OrunPay Connect will support two types of payments. Namelly, inflow and outflow of payments for Cuban Companies and Cryptocurrency payment processing for Cuban merchantsCuban company inflow and outflow payment example      

1. A European company that needs to make a payment to its Cuban counterparty registers with OrunPay Connect and fulfills Know Your Business (KYB) requirements to deposit Euros and receive EBI tokens.        

2. The European company can then make a payment in EBI tokens to its Cuban counterparty that also has an OrunPay Connect account.        

3. The Cuban company can either:

                a. Exchange the EBI tokens for a Cuban currency via one of OrunPay’s Cuban liquidity providers.

               b. Hold the EBI tokens and use them to make a payment to:

                        i. A European provider that can redeem the EBI tokens for fiat Euros via Orunpay’s anchor services (subject to KYB requirements).

                       ii. A Mexican provider, for example, that would receive Mexican Pesos via a Path Payment Operation using the Stellar DEX.

Cryptocurrency payment processing example for Cuban merchants

Cuban merchants could use OrunPay Connect to receive online payments in any cryptocurrency or Stellar-based stablecoin the application supports.

The process works as follows:        

1. Cuban merchants can register first with OrunPay Connect as a standard business. Upon successful registration, they can use OrunPay Connect to send and receive payments to/from any other Stellar account. This is called the Business Main Account.        

2. To activate a merchant account, the merchant can open a support ticket directly from the OrunPay application itself. The OrunPay support team will then set up the merchant account after requesting extra information from the merchant. From a technical point of view, the merchant account is essentially a new Stellar account linked to the business applying for the merchant services.        

3. Successful merchant registration will activate the merchant section in the OrunPay Connect application, which will display:

               a. An account section, where the merchant can see all payment transactions received. Payments received in the Merchant Account can be easily transferred to the Business Main Account by simply pressing a transfer button.

                b. A section where the merchant can manage the API keys necessary to interact with the OrunPay merchant API.        

4. With the OrunPay merchant API keys, the Cuban merchant can then integrate the OrunPay payment widget into his/her website and start accepting cryptocurrency payments settled in EBI tokens in his/her Merchant Account.

Coinqvest - OrunPay's partner supporting cryptocurrency payments for Cuban merchants        

OrunPay heard about the Coinqvest team just after the announcement of the SCF Round 7 winners. At the time, we were just about to start developing our own crypto payment processing solution for merchants and were quite happy to learn that this was not needed anymore. Coinqvest’s great product has allowed us to reduce our development work from several months to just a couple of weeks. We only needed to built our own checkout widget on top of Coinqvest’s services, and our Cuban merchants will soon be able to accept online cryptocurrency payments that will automatically settle with the EBI token in their OrunPay merchant account.

OrunPay Connect’s non-custodial approach        

Building a non-custodial solution tailored to businesses requires different features compared to building a non-custodial wallet for individuals. More specifically, businesses are used to logging in and registering for applications using the username/password approach, making it difficult to change this behavior. In addition, a business will not accept to rely solely on a backup/seed phrase as the only security measure that protects its funds.         For OrunPay, designing a non-custodial platform that fulfills these requirements was particularly challenging considering that our customers would be traditional businesses unfamiliar with blockchain technology        

We therefore spent a great deal of time working on the application’s UI to create a seamless experience for traditional businesses with little crypto knowledge. Coupled with Fireblocks’ MPC Technology, we could build a non-custodial solution more suitably designed for non-crypto businesses while fulfilling their security needs.

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PRODUCTS & SERVICES

OrunPay’s solution for improving Cuban financial flexibility and inclusivity revolves around providing individuals, as well as businesses, with a set of tools and services that give them access to more stable currencies, such as the Euro, and that improves the sending and receiving of payments supported by the Stellar Network.

WHY STELLAR?      

Stellar is a blockchain network built for currencies and payments. It has a set of standards, the Stellar Ecosystem Proposals, that allow ecosystem participants (i.e. payment providers, asset issuers and wallets) to build their offerings on top of the Network in a way that ensures maximum interoperability. This means that companies providing services on the Stellar Network can move money in seconds under the same set of standards, even if they are in different regions, follow different regulatory requirements or use different local payment systems.        

The Stellar Network has allowed us to build the products that will facilitate the interaction of Cuban individuals and businesses with the global financial system. By doing this, we aim to reduce the financial isolation that Cubans have suffered from for more than six decades.

ORUNPAY'S PRODUCTS & SERVICES OFFERING

OrunPay’s current focus is on facilitating the movement of remittances from Cuban expats around the world to their families in Cuba, as well as improving the payment flows for Cuban companies. We will do this by providing three specific products and services:        

• OrunPay’s proprietary digital representation of the Euro - the EBI token - issued by our subsidiary Ebioro.      

• A non-custodial, Stellar-based mobile wallet for individuals - the OrunPay wallet.        

• A non-custodial web application for corporate cross-border payments involving Cuba - OrunPay Connect.

The EBI Token

The EBI token (EBI) will be a clawback-enabled Stellar Euro token that will be issued by Ebioro B.V., a subsidiary of OrunPay B.V. The EBI token will have three main purposes:        

• To act as a bridge currency for Cuban related payments on the Stellar Network.        

• Provide Cuban individuals and companies the possibility to hold, send or receive payments in a currency that is more stable and less exposed to devaluation compared to the Cuban Peso.        

• Guarantee Cuban currency liquidity with our Cuban financial partners - when they exchange Cuban currencies for our EBI token, they can convert it back to Euro fiat and use it for their international transactions.

Why issue a new Euro token and not use any of the available ones on the Stellar Network (i.e. EURT, EURB)?        

This was our first approach since it would be easier to implement and less expensive. However, fiat token issuers are generally licensed companies that are either a bank or work closely with banks to maintain 1:1 reserves for token redemption. Banks are therefore ultimately the parties that have control over token redemption due to their close connection to local payment systems, such as SEPA, ACH or Faster Payments. Most European banks do not onboard companies that support Cuba in any significant way or facilitate transactions to Cuba due to the considerable risk of reprimand by the US due to sanctions surrounding Cuba. Relying on a fiat Euro token supported by any of these financial institutions was consequently too risky for OrunPay.        

Another reason for issuing our proprietary Euro token was due to the discomfort felt by our Cuban liquidity providers in holding an EUR token issued by a company that they did not know and trust.

Regulatory requirements around the EBI token      

Ebioro B.V (Ebioro), a subsidiary of OrunPay B.V, will act as the sole issuer of the EBI token. Ebioro will issue the tokens at a 1:1 ratio, backed by Euro reserves deposited at our banking partner’s Ebioro account that is dedicated to stablecoin redemption. Figure 1 shows an illustration of the EBI token, as found in the following folder.

OrunPay B.V (OrunPay) will act as a Stellar anchor and distributor of the EBI token. To do this, OrunPay B.V is undergoing a registration process to act as an Electronic Money Institution (EMI) intermediary supervised by the Central Bank of Lithuania. This registration will allow OrunPay B.V to perform, among others, the following activities:        

• Allow deposits and withdrawals of fiat Euros.        

• Execute Euro payment transactions within the European region.        

• Complete money remittances.The registration also requires OrunPay to fulfill the following requirements:        

• Maintain comprehensive Compliance and AML programs.        

• Perform KYC checks for every new customer.        

• Perform ongoing transaction monitoring on the Stellar Blockchain and identify potentially high-risk Stellar addresses linked to OrunPay customers (addresses linked to scams, money laundering, etc.)Our partners supporting the issuing of the EBI token on the Stellar blockchain

Elliptic Enterprises Limited        

In addition to following standard regulatory procedures (i.e., AML/KYC, fiat transaction monitoring, etc.), regulators are starting to request that fiat token issuers ensure that blockchain wallet users depositing or redeeming the issuers’ tokens are not considered high-risk. Creating a risk profile for those wallets is a challenge, requiring a combination of different types of subject expertise (i.e., blockchain, data mining, regulatory, statistics) that OrunPay does not have.        

By using Elliptic Blockchain Analytics and Compliance tools, OrunPay has been able to combine blockchain-related monitoring activities with traditional ones related to fiat transactions, creating a more robust compliance and AML program. This partnership has helped OrunPay greatly during our discussions with regulators and financial institutions in Europe and in Cuba.

Fireblocks      

OrunPay has put a lot of effort into thinking about the management of the private keys linked to OrunPay’s Stellar accounts, including the issuer, distribution, market-making, and any other accounts we would use. We knew that we did not want to host any of the private keys on our servers since we did not deem that safe and we are not a security company. Additionally, we did not want to have the private keys stored away in cold storage because they would still be kept in a single place offline and that would greatly increase our operational tasks.        

Traditionally, the approach followed by fiat token issuers on the Stellar Network has been to keep the issuer account’s private key via cold storage techniques and the distribution account’s key via hot storage ones. Other issuers also use multisig for the issuer account as an extra layer of security, but this requires coordination between the signers for every amount of asset to issue.        

OrunPay came across Multi-Party Computation (MPC) Technology used by Fireblocks for the issuing of the EBI token and we were highly satisfied with the results. Fireblocks’ MPC technology is based on breaking up the private key of a blockchain account into multiple encrypted pieces, or shares, divided among multiple parties. The private key share that each party holds is independently computed to produce the signature of the blockchain transaction. Based on the success we experienced for the EBI token, we decided to use Fireblocks for all other activities on the OrunPay platform that require signing Stellar transactions in a secure way without compromising our private keys.Coincover        Fireblocks is a non-custodial service provider. We therefore use Coincover as a backup recovery provider that stores some of the shares of our Stellar account’s private keys from Fireblocks in the case of a disaster, such as losing our share of a private key.

The OrunPayWallet        

Most Cubans, whether expats or nationals, are non-crypto users. Before 2020, Bitcoin and other cryptocurrency usage in Cuba was almost nonexistent. The same year, Western Union, one of the largest remittance service providers in the world, cancelled its remittances services to Cuba due to its Cuban partner being sanctioned by the Trump administration, pushing Cuban expats in the US to start looking at Bitcoin as an alternative option to send remittances to their families. This, however, remains limited because cryptocurrency exchanges are not authorized by the Cuban Financial Authority and Cuban nationals don’t have any easy way to exchange the cryptocurrencies they receive for local currencies.        

We looked at several amazing wallets developed by the Stellar Community for non-crypto users, but it was difficult to find one that could satisfy our requirements. We therefore decided to build our own non-custodial wallet, giving us the opportunity to design it keeping the user experience in mind as our top priority. As such, we took advantage of the latest updates made to the Stellar Protocol and decided to handle lumen requirements on behalf of our users. Screenshots of the wallet can be seen in Figures 2-4 by accessing the following folder.    

In addition to traditional wallet features, the OrunPay wallet will be supporting:        

• Sponsored reserves: OrunPay wallet users won’t need to go to an external crypto exchange to buy Stellar Lumens to create their Stellar account on the Network, or for creating trust lines for assets issued by Stellar.  These operations will be fully sponsored by OrunPay.      

•Claimable balances: The OrunPay wallet will support claimable balances by default when interacting with Stellar Anchors via SEP-006 or SEP-0024. Claimable balances will be displayed in the transactions overview and could be claimed easily by the user. Claiming a balance will create an atomic transaction containing the operations for sponsoring the trustline, the trustline creation and the balance claim.        

•Fee bumps: Stellar network fees will be paid by accounts hosted by OrunPay.      

•Other wallet functionalities:                

- It will allow users to buy Lumens directly using several payment methods (i.e. SEPA, credit cards and Apple Pay).                

- It will support SEP-006, SEP-007, SEP-0010 and SEP-0024.              

- It will allow users to trade wallet supported assets on the Stellar Decentralized Exchange.

How  can the OrunPay wallet support Cuban individuals?

As a first step, we expect Cuban expats around the world to use the OrunPay wallet to send remittances to their families in Cuba. A high-level workflow of this step and what follows is explained in greater detail below:        

1. Cuban expats living in the US or in Europe, for example, can download the OrunPay wallet and proceed to go through KYC.        

2. After KYC verification, Cuban expats from Europe can add EBI tokens into their wallet by sending fiat Euros to OrunPay via OrunPay’s anchor service. Similarly, the Cuban expat living in the US can top-up the wallet with USDC. This will be done via our partnership with Finclusive (see next section).        

3. The Cuban expat in Europe can send the EBI token directly to his/her family member in Cuba who also has an OrunPay wallet. The Cuban expat living in the US will send USDC and his/her family member will receive EBI tokens. This is because Cuban nationals will not be able to exchange USDC with our Cuban liquidity providers. The OrunPay wallet will therefore use the path payment operation going through the following path: USDC->XLM->EBI.        

4. Once the EBI token in hand, the Cuban national will have the freedom to choose what to do. He or she could:                

a. Keep the EBI token in his/her wallet and use it to pay other people that also have a Stellar compatible wallet.                

b. Exchange the EBI token for a Cuban currency in his/her Cuban bank account via one of our Cuban liquidity providers.                

c. Pay at a restaurant or other merchant that is using the OrunPay Connect product.

Finclusive - our partner supporting the Cuban American market while adhering to US regulation      

The Cuban expat community faces multiple challenges to send money to their families in Cuba due to the reluctance most banks, including non-US ones, face to authorize transactions to Cuba, as mentioned earlier. US sanctions targeting Cuba are administered by The Department of the Treasury’s Office of Foreign Assets Control (OFAC), providing guidelines about what can and cannot be done regarding payment transactions from the US to Cuba in their Cuban Assets Control Regulation (CACR). A key point to mention here regarding CACR is that payments to Cuba from the US are not strictly forbidden, but rather need to fall under specific categories that are authorized by OFAC. For example, “family remittances” is a category that is authorized as long as the remittance amount is under a certain threshold and is not distributed in Cuba by entities affiliated with the Cuban military, among others. The intention of this measure is to ensure that most of the funds from the remittance are received by the Cuban national directly, without any intervention by of Cuban companies that are sanctioned by OFAC.        

Complying with these measures using traditional financial infrastructure is very difficult, however. Most remittances entering Cuba are handled and distributed into Cuban bank accounts through a tightly controlled chain of companies associated with the Cuban military. This was the reason why Western Union withdrew their services to Cuba in 2020, after 20 years of supporting money remittances to the island. The Cuban expat community in the US, approximately 1.35 million, relied almost exclusively on Western Union to send funds to their loved ones in Cuba.        

Supporting use-cases like this one is a great fit for the Stellar Network, where funds can flow directly from the wallet of a Cuban American to the wallet of the Cuban national without any intermediaries in seconds. However, we wanted to ensure that we were building a solution for the Cuban American community that followed OFAC guidelines and decided to partner with Finclusive. Finclusive is a Compliance-as-a-Service (CaaS) provider that specializes in empowering the underbanked around the world. Finclusive’s team have a strong track record concerning complicated compliance issues and have vast expertise surrounding US regulations, making them a great fit for us. OrunPay will be using Finclusive’s compliance platform and its USDC anchor services to allow deposits and withdrawals of USDC in the OrunPay wallet for Cuban Americans while complying with OFAC regulation.

OrunPay Connect        

OrunPay Connect was created to tackle the payment challenges facing Cuban companies and merchants, as described in the Problem and Solution section. It is a non-custodial web application that allows Cuban companies send and receive payments using the EBI token as their underlying asset. Foreign non-European based companies will in the future also create an account and deposit fiat money in exchange for a corresponding fiat token from their respective Stellar local anchors (i.e. US Dollar -> USDC). Our initial plan is to first start supporting European companies by providing on/off ramping of the Euro with the EBI token. After that, we will integrate other Stellar anchors to the OrunPay Connect application so that non-European companies doing business with Cuba can also use our service. Screenshots of OrunPay Connect can be seen in Figures 5-13 by accessing the following link.

How can OrunPay Connect supports Cuban companies?Initially, OrunPay Connect will support two types of payments. Namelly, inflow and outflow of payments for Cuban Companies and Cryptocurrency payment processing for Cuban merchantsCuban company inflow and outflow payment example      

1. A European company that needs to make a payment to its Cuban counterparty registers with OrunPay Connect and fulfills Know Your Business (KYB) requirements to deposit Euros and receive EBI tokens.        

2. The European company can then make a payment in EBI tokens to its Cuban counterparty that also has an OrunPay Connect account.        

3. The Cuban company can either:

                a. Exchange the EBI tokens for a Cuban currency via one of OrunPay’s Cuban liquidity providers.

               b. Hold the EBI tokens and use them to make a payment to:

                        i. A European provider that can redeem the EBI tokens for fiat Euros via Orunpay’s anchor services (subject to KYB requirements).

                       ii. A Mexican provider, for example, that would receive Mexican Pesos via a Path Payment Operation using the Stellar DEX.

Cryptocurrency payment processing example for Cuban merchants

Cuban merchants could use OrunPay Connect to receive online payments in any cryptocurrency or Stellar-based stablecoin the application supports.

The process works as follows:        

1. Cuban merchants can register first with OrunPay Connect as a standard business. Upon successful registration, they can use OrunPay Connect to send and receive payments to/from any other Stellar account. This is called the Business Main Account.        

2. To activate a merchant account, the merchant can open a support ticket directly from the OrunPay application itself. The OrunPay support team will then set up the merchant account after requesting extra information from the merchant. From a technical point of view, the merchant account is essentially a new Stellar account linked to the business applying for the merchant services.        

3. Successful merchant registration will activate the merchant section in the OrunPay Connect application, which will display:

               a. An account section, where the merchant can see all payment transactions received. Payments received in the Merchant Account can be easily transferred to the Business Main Account by simply pressing a transfer button.

                b. A section where the merchant can manage the API keys necessary to interact with the OrunPay merchant API.        

4. With the OrunPay merchant API keys, the Cuban merchant can then integrate the OrunPay payment widget into his/her website and start accepting cryptocurrency payments settled in EBI tokens in his/her Merchant Account.

Coinqvest - OrunPay's partner supporting cryptocurrency payments for Cuban merchants        

OrunPay heard about the Coinqvest team just after the announcement of the SCF Round 7 winners. At the time, we were just about to start developing our own crypto payment processing solution for merchants and were quite happy to learn that this was not needed anymore. Coinqvest’s great product has allowed us to reduce our development work from several months to just a couple of weeks. We only needed to built our own checkout widget on top of Coinqvest’s services, and our Cuban merchants will soon be able to accept online cryptocurrency payments that will automatically settle with the EBI token in their OrunPay merchant account.

OrunPay Connect’s non-custodial approach        

Building a non-custodial solution tailored to businesses requires different features compared to building a non-custodial wallet for individuals. More specifically, businesses are used to logging in and registering for applications using the username/password approach, making it difficult to change this behavior. In addition, a business will not accept to rely solely on a backup/seed phrase as the only security measure that protects its funds.         For OrunPay, designing a non-custodial platform that fulfills these requirements was particularly challenging considering that our customers would be traditional businesses unfamiliar with blockchain technology        

We therefore spent a great deal of time working on the application’s UI to create a seamless experience for traditional businesses with little crypto knowledge. Coupled with Fireblocks’ MPC Technology, we could build a non-custodial solution more suitably designed for non-crypto businesses while fulfilling their security needs.

TARGET MARKET

"OrunPay’s target market will revolve around three groups, Cuban expats, Cuban nationals and Cuban private companies.

Cuban expats
This group is composed of over 1.5 million Cuban individuals living outside of Cuba who may use OrunPay’s wallet to send remittances. Cuban expats are primarily concentrated in the US and Spain, with 80% of the Cuban expat community living in these two countries. The age group of Cuban expats that send money abroad ranges from 20 to 50 years old.

Cuban nationals
This group is generally the recipients of remittances sent by friends and/or family members living abroad. This is a broad group, with recipients primarily aged between 20 and 90 years old. Cuban nationals who could use OrunPay’s services are geographically spread across both rural and urban locations in Cuba. The primary need for using OrunPay’s services in Cuba revolves around daily livelihood, with remittances and wealth safekeeping often being a lifeline for many Cuban households. This group is known to generally have little knowledge of blockchain.

Cuban companies
This group is primarily composed of small, private, or family-run businesses with few employees that are run by Cuban entrepreneurs. Industries that these companies operate in vary considerably and usually revolve around catering to the tourism business or providing basic products and services to the Cuban population. These types of companies include restaurants (“paladares”), small private hotels/B&Bs (""casa particulares""), taxi services, clothes repair shops, catering, mechanics, design agencies and bike repairs. These are located all around Cuba, but are primarily concentrated in urban areas, namely Havana, where there are more opportunities to grow their businesses.


There are, however, numerous more mature and developed businesses that have been operating for many years with larger numbers of employees that could use OrunPay’s services as well, such as hotels or car rentals. These businesses also include Cuban joint venture companies, businesses formed between the Cuban State and foreign investors.


Cuban companies could potentially use the OrunPay Connect application to facilitate payments to foreign and local partners using the EBI token. Similarly, they can also receive cryptocurrency payments if they apply for a merchant account. This is especially practical for people visiting the island (foreign tourists or Cuban expats), as they would no longer need to convert their foreign currency on arrival and carry local currency in cash with them, having instead the ability to pay for local goods and services using OrunPay's digital offerings.


For example, a Cuban restaurant that offers food delivery services could register as an OrunPay merchant. A Cuban expat living in Spain could then easily order food to be delivered to his/her parents' house by paying online via their OrunPay wallet, with the funds deposited into the Cuban restaurant’s OrunPay Connect account. Similarly, a European tourist visiting the island could pay for a variety of services offered by private businesses, such as a meal at a private restaurant or a stay at a private B&B, using the OrunPay wallet.

REVENUE MODEL

OrunPay’s revenue will be derived from three primary sources:

       1. Deposit and withdrawal fees from anchor services: This is expected to be the main source of OrunPay’s revenue as the EBI Token will be the underlying asset supporting remittances and payments to and from Cuba. Our plan is to initially support euro on/off ramping for our products exclusively for a period of 6 to 8 months once we go live. This would allow us to build up more experience around the operational tasks involved before distributing the EBI token to other Stellar applications (SEP-006 and SEP-0024).



       2. Market-making activities: We plan to add a small FOREX spread when creating liquidity for the EBI token on the Stellar DEX.



       3. Commissions from partner anchors based on volume: This is a source of revenue that we would like to explore in more depth with partner anchors once we are live. We strongly believe that our payment solution for companies can significantly contribute to the issuing volume of some fiat anchors. This will primarily involve regions such as Mexico, Canada and South America where local companies need a reliable payment solution for their payment obligations to Cuban counterparties.    



       Based on our pricing structure, OrunPay is expected to make approximately €225,000 in revenue for its remittances service in its first year of operation, growing to almost €3 million by Year 3. These projections are taken from a detailed financial model focused on remittances that go in-depth into the profitability of OrunPay based on three different scenarios over a three-year period.  

The main driver behind these revenue figures is the number of users we expect to have each year.  Concerning corporate payments, this was particularly difficult to model due to a lack of online resources (Cuba remianing a niche and closed market, especially for fintech), so we had to rely extensively on first-hand accounts from people working in the finance industry in Cuba. We are hoping to process €20 million worth of payments and earn approximately €800,000 in revenue by the second year of operation once OrunPay Connect goes live. OrunPay is planning to use a similar pricing scheme as the one described for remittances, although we are still evaluating whether to charge a lower fee for companies

MARKET RESEARCH

Cuba’s isolated nature, due to factors such as the US Embargo, has left many of its industries in a state of stagnation and abandon. While tourism has grown into the powerhouse of the Cuban economy over the years, merchants operating in this industry (particularly in the private sector) still struggle to find efficient ways to process payments to and from overseas, still largely relying on cash. This is a cumbersome and inconvenient experience for many tourists traveling to Cuba, who have no way of converting any left-over cash into another currency when they leave. This payments struggle is the reality faced by most Cuban companies, not only in the tourism sector, with the US Embargo severely limiting Cuban companies’ abilities to send and receive payments from abroad. In effect, the Cuban corporate payments sector hasn’t benefitted from any of the many innovations in the payments sector in decades, with change coming sparsely and slowly, if at all.


The remittances industry has steadily grown over the years into a roughly $6.6 billion market by 2019, with an average of 51% of Cuban livelihoods depending on remittances. A large proportion of these were cash remittances, either in the form of electronic payments via remittance providers such as Western Union or by cash "mules" (individuals who travel to Cuba carrying cash). The onset of COVID-19 in 2020 has had a major impact, however, on the remittances industry in Cuba, due to the near-complete halt of operations of international airlines, making it impossible for cash mules to travel to Cuba. Similarly, the Trump administration’s sanctioning of the largest Cuban remittance processing agent resulted in Western Union, the dominant remittance provider operating in Cuba, ceasing the flow of remittances to Cuba. The remaining remittance providers still in operation are too small and inefficient to make up for the vacuum left by Western Union and cash mules. Some figures indicate a decrease of approximately 54% in remittances in 2020, with similar patterns experienced in 2021, pushing for an alternative solution to bring money into Cuba.

THREATS & OPPORTUNITIES

The lack of tourism and a serious decline in remittances has left Cuban individuals and businesses cash-strangled and in need for a solution that allows for the free flow of funds. Furthermore, the recent efforts by the Cuban government to unify the country’s currencies has created a steep devaluation of the country’s main currency, the Peso Cubano, creating an additional need for Cubans to be able to protect their wealth by holding on to stable and valuable currencies. This has created an important opportunity for OrunPay to bring a real solution to the Cuban people and businesses that does not rely on traditional financial infrastructure.


OrunPay’s primary challenge has been figuring out a compliant way to support the US market. The US is where most of the Cuban expats live, and we want to create a solution that could really make a difference there. However, US regulation surrounding Cuba is complex and requires significant investments of both time and resources.

COMPETITION

Figure 14 illustrates how OrunPay compares to its competitors for selected capabilities and can be found by accessing the following link: https://drive.google.com/drive/folders/1k3m-wkGJr-_acD9YzurNdzpSmzehy-tC

Remittances
•Traditional Remittance Service Providers (RSPs): These include large, global RSPs such as Western Union as well as smaller providers specialised in Cuba, such as Fonmoney (https://www.fonmoney.com)  and TropiPay (https://www.tropipay.com). They are most often used by Cuban expats and charge between 10-18% of the transaction amount. Many rely on the same Cuban remittance processing agent as an intermediary to deposit the money in the recipient’s bank account, taking approximately 2-4 days for the money to arrive. The Trump administration affected the operability of the US-based RSPs (i.e. Western Union), when, in 2020, it added this Cuban remittance processing agent to the OFAC sanctions list. Many of these players have been operating in Cuba for years, acquiring a strong level of expertise on Cuban and American regulations over time.


•Cash Mules: Small companies or individuals who fly cash to Cuba as a form of remittance (primarily for US remittances). They charge similar fees and take a similar amount of time to deliver the remittance as traditional RSPs do. They are normally used to bring in larger amounts of US dollars into the country than what can be sent with RSPs. Due to COVID-19, most flights to Cuba have been suspended for the time being, severely affecting the movement of cash via mules. Additionally, over the past months the Cuban Central Bank issued a new directive to all Cuban Financial Institutions to not accept US dollars anymore. Cash mules are therefore now trying to look for ways to enter other currencies into the country, such as Euros, Canadian dollars or Mexican Pesos, but the volume is expected to be lower compared to the volume of US dollars.



Company Payments
•Traditional Banks: Only a limited number of banks and other financial service providers are able to operate in Cuba due to a high reluctance by most banks to operate in Cuba. It is difficult to open bank accounts with these banks as an individual or company with strong relations to Cuba. Payments between foreign and Cuban counterparties are executed almost exclusively via these players. Often more expensive in dollar terms to send/receive payments to/from Cuba than other places, inefficient and unreliable due to US Embargo regulations.

OrunPay’s primary competitive advantage compared to its competitors is that we are able to leverage the advantages of the blockchain to create a tailored solution unique to Cuba. OrunPay is able to provide an efficient, easy-to-use service that is significantly cheaper than the competition, both for remittances and company payments. Users of OrunPay’s services also have access to our anchor services, allowing them to hold on to wealth, a non-existent feature for OrunPay’s competitors. While OrunPay is able to operate with more flexibility concerning the US Embargo, OrunPay still faces similar regulatory and political hurdles.

MARKETING & SALES

OrunPay is planning to hire a dedicated Marketing Manager to help grow the company.  As a first step, we will work closely with the new manager to create a detailed and comprehensive marketing plan.  This will illustrate the company's optimal marketing, PR, SEO, emailing list, advertising and adtech-related strategy, among others, tailored to OrunPay’s needs for going live and beyond.  If received, part of the grant will be allocated towards paying a competitive salary to the new Marketing Manager and another part to provide resources to help the manager create this plan (ad testing, third-party consultant fees, paid content, etc.) as well as to make minor plan implementations. During the year, OrunPay will have to raise more capital in order to fully deploy the rest of the marketing plan.


Based on preliminary discussions with the new Marketing Manager, OrunPay is evaluating an “Early Adopter” scenario based on acquiring an initial seed audience, where user access to the app is slow and controlled to create a sense of exclusivity as well as to test the app in a live environment.  This can be done by first focusing on users with a minimum understanding of cryptocurrencies, for example, before targeting a wider user base.  If done properly, part of the seed audience can then grow into brand ambassadors and customer support actors that grow the company organically via network effects, increasing CROs on install, register and purchase.



An illustration of the Early Adopter scenario can be seen using the following link: https://drive.google.com/drive/folders/1k3m-wkGJr-_acD9YzurNdzpSmzehy-tC

RESOURCES & RELATIONSHIPS

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About you

Yulexi Matienzo - Founder & CEO
- Cuban-born entrepreneur living in The Netherlands.
- Self-taught programmer building products on the Stellar Network since 2017.
- 15+ years in IT Consulting and Systems Integrations.

Cameron Young - Co-Founder & Director
- Has over 20 years experience as an asset manager and foreign investor working with Cuba.
- Specific leadership experience in the negotiation, structuring and implementation of foreign direct investment, real estate and financial sector transactions in Cuba.

Mathias Young - Co-Founder & Head of Finance and Operations
- International investment banking, accounting and strategic experience working with early and late-stage startups in Technology and Healthcare sectors.
- Masters degree in Finance and Accounting from the Rotterdam School of Management, writing Master thesis on blockchain implementation in Cuban capital markets.

OrunPay B.V.

OrunPay is a payment platform created to provide financial independence to Cubans. We do this by partnering with Cuban financial institutions to give users access to local currencies in exchange for Euros, and by providing services built on top of the Stellar Blockchain Network, allowing people to send money to each other cheaply and efficiently. More specifically, OrunPay will allow:

•  Cuban expats around the world to send remittances to their families in Cuba cheaply and faster than what is currently possible using traditional money transfer companies.

•. Cuban small-business owners, who have limited ability to use credit card processors, to receive online payments for their products and services.

• Foreign companies that are legally authorized to conduct business with Cuba to send and receive money to/from Cuban companies without their transactions being blocked as a result of US sanctions against Cuba. This currently happens while using financial institutions around the world.

• In addition to sending/receiving payments, users could use OrunPay to keep their savings in more stable currencies like Euros or dollars to avoid being exposed to Cuban currency devaluations.

COMMUNITY DISCUSSION