Vumatel founders launch crypto project
Vumatel cofounders Niel Schoeman and Johan Pretorius have spearheaded the development of a digital currency called Toco that derives its value from the amount of carbon removed from Earth’s atmosphere.
Paul Rowett also cofounded Toco and serves as its CEO. Rowett previously cofounded the hospitality industry ed-tech platform Lobster Ink.
Schoeman stepped down as Vumatel CEO in May 2018 and served as executive chairman of the fibre network operator for a while.
Pretorius and Shoeman have since founded digital infrastructure investment firm Advencap with Richard Tunstall and Andrew Parker.
Toco insists it isn’t a cryptocurrency, although it is a cryptographically-secured digital currency running on a permissioned blockchain using Polkadot’s platform.
Polkadot was created by Ethereum cofounder Gavin Wood and was initially released in May 2020.
Toco minted its genesis block on 23 October 2022.
Crucially, tocos will not be traded on any cryptocurrency exchanges. The only way to convert from fiat currency (i.e. rands) to tocos and back again is through the Toco mobile app.
The app acts as a digital wallet and lets users make payments by scanning a merchant’s QR code. You can also receive tocos into your account via a QR code or public wallet key.
Toco charges a 1% transaction fee for payments.
Creating a wallet is free, and there are no monthly account fees.
Toco’s initial launch is in the founders’ home turf of South Africa, but it has global asperations.
A handful of businesses in Stellenbosch currently support the platform and a map of tocos-supporting merchants is available on the project’s website.
Toco team
Each toco represents a tonne of carbon dioxide removed from Earth’s atmosphere, and is how the currency got its name.
Toco explains that new tocos are minted and verified by The Carbon Reserve, a non-profit established in Switzerland.
Schoeman, Rowell, and Pretorius are on The Carbon Reserve’s board of governors.
“What happens if instead of debt, gold, or mined ones and zeroes, we represent a currency using carbon removed from the atmosphere?” Toco says in an explanation of how its system works.
“Carbon dioxide emissions are either reduced by a switch to renewable energy, or removed from the atmosphere through projects like reforestation or soil-based carbon capture.”
The amount of emissions saved is verified, and certificates issued representing the amount of carbon dioxide mitigated.
“The Carbon Reserve purchases the certificates, creating a digital vault of carbon mitigation assets.”
Tocos are then minted.
The certificates and tocos are registered on Toco’s permissioned blockchain.
According to Toco, this lets the source quality and quantity of the certificates be independently verified.
Paul Rowett
“As more banks, consumers, and merchants use tocos, demand increases. To meet this demand, more carbon credits are purchased, so the carbon reserve can issue more tocos,” it states.
“In this way, using tocos creates an incentive for high-quality carbon reduction and removal projects. This simple cycle allows everyone to become part of the solution.”
A permissioned blockchain generally trades decentralisation and a level of transparency for privacy.
In Toco’s case, it requires that users must go through a “Know Your Customer” (i.e. FICA) process for anti-money laundering purposes.
As a result, transactions on its blockchain are not anonymous by design.
“Toco securely encrypts all personal details, including the card and banking information you use to exchange tocos for your local currency,” it assures.
“These details are never shared, and they are not stored on our systems. Your card details are encrypted and only used in combination with your passcode, fingerprint, or Face ID when an exchange is made.”
Michael Jordaan, Montegray Capital
Toco is backed by Michael Jordaan, a venture capitalist and former First National Bank CEO.
Speaking to MyBroadband, Jordaan said it is a great use case for crypto.
“Crypto is high on hype but low on real use cases. Fighting climate change is an important and real application of blockchain tech,” he said.
“This project has very high ambitions. Some may even say crazy. But if it succeeds, it will definitely make the world better, and it is great to be involved in mission-driven startups alongside proven entrepreneurs.”
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