Singapore’s Tembusu Systems raises $887k, dissociates from Bitcoin

Tembusu Systems, a startup which previously developed Bitcoin ATMs, has changed direction. It has now raised a S$1.2 million round (US$887,000) to develop and sell what it calls the TRUST Framework, a “next-generation distributed blockchain technology”. The framework supposedly addresses concerns raised by governments, banks, and other organizations who are intrigued by cryptocurrency but worried about its anonymous nature and irreversible losses should an account get hacked.

The funding round values the startup at S$11 million (US$8.1 million), though Tembusu did not state who exactly the investors are. One of them though is a public-listed Singapore firm, the startup wrote in a press release. The company’s identity will be disclosed eventually.

“In fact our ATMs were seeing decent sales figures on average right until the recall. However, as we worked more with Bitcoin itself as a currency and a commodity of trade, we realized that Bitcoin had many weaknesses that stood in the way of it gaining widespread acceptance and stability,” says Jarrod Luo, co-founder and COO of Tembusu. He adds that businesses dealing with Bitcoin were directly exposed to its high volatility, and that led the company to recall its ATMs.

The TRUST framework, based on the Ripple code base, enables offline transactions, uses proof-of-identities, and has a credit worthiness scoring system. It also lets users recover their money after a hacking incident. Ripple is a popular alternative to Bitcoin.

“While not a cryptocurrency in itself, TRUST’s technology can also allow banks, governments and corporations to launch their own asset-backed cryptocurrencies. Asset-backed cryptocurrencies will likely be much more stable than Bitcoin, which has seen wild price fluctuations and is worth just 25 per cent of what it was worth 12 months ago,” the press release says.

The website continues: “Each TRUST transaction belongs to identifiable person with accumulated ‘trust’. This allows trusted individuals to make offline transactions, so business can be done even without an Internet connection.” Sample apps, APIs, and documentation will be released soon.

The technology can apparently be used in payment processing systems, low-cost remittance services, a cross-border loyalty points system, and banking and trade facilities for the unbanked. That’s a whole lot of ambition. What’s noteworthy though is that the word “Bitcoin” has been dropped entirely from the site, which could be part of its strategy of engaging banks and governments, who are wary of the term and its association with crime.

Nonetheless, it carries some of the benefits of blockchain technology, which includes peer-to-peer transactions, a distributed and unfalsifiable ledger, and low transaction costs. The company is talking to 10 organizations to potentially implement the system.

Tembusu also announced that it has snagged University of Athens academic Yanis Varoufakis, who was recently appointed Greece’s finance minister, as an advisor. They’ve been working together since November 2014. All three founders happen to be avid gamers who admired Vraoufakis’ work in designing the economics of Steam – a popular online gaming shop. They then wrote him a letter, inviting him to come on board.

The company’s other advisor is David Lee, a professor of quantitative finance at the Singapore Management University.

See more: Singapore Bitcoin vending machine startup raises seed funding for expansion

Update (9.30pm): Added answers from Tembusu Systems.