Most banks let you send money abroad. The only downside is, most banks also choose when, how, and at what exchange rate. For anyone who has sent money internationally, you’ll most likely understand when we say that something just feels unfair about the whole process.
Sending money internationally is crucial for individuals and businesses alike, yet it has always been plagued by poor exchange rates, hidden fees, and surprise rate fluctuations that all add unpredictability. In addition, banks and transfer services lack transparency over conversions and international transfers, leaving customers frustrated and looking for more affordable modern alternatives (we’ll get to that).
This article will explore the emergence of new programmable financial tools called smart contracts, which are now giving people more control than ever. These innovations are helping individuals set their own rules, trigger automated processes when the conditions are right, and avoid opaque fee structures and middlemen. Unlike banks or apps, smart contracts offer borderless transfers on your terms, not the bank’s.
Control is shifting from institution to user, and fast.
Why Traditional Banks Offer Poor Exchange Rates
Traditional banks offer pretty poor exchange rates, especially when you compare them to the mid-market or actual rate you’ll find on Google. This is due to their business model and profit motives. The banks add significant “hidden margins” on top of the mid-market rate, such as their own spread, additional transaction fees, or intermediary charges.
This opaque structure is the source of much frustration, as it means the individual sending money internationally or converting their currencies is always at a disadvantage. Another reason is timing. The banks decide when a conversion happens, not to prioritize the customer’s best rate, but to chase higher profits. The result is that banks offer a kind of “take-it-or-leave-it” service where the customer has to choose between poor exchange rates or not making the conversion at all.
Common Pitfalls of International Money Transfer Apps
Popular money transfer apps like Wise and Revolut typically offer much better rates than banks, yet they still lack complete transparency and continue to skew rates in their favour. They also lack sophisticated timing options, meaning users must accept the current rate, with no way to set a target exchange rate for an automated execution.
While these things are commonplace with most transfer services, users must gratingly accept that a slight difference in exchange rates could lead to significant losses, especially on larger transfers. Without the tools to time actions automatically during perfect market conditions, users are often just throwing their money away when sending money internationally.
The Power of Programmable Financial Tools
Over the last decade, smart contracts have marked a notable shift in money management, particularly cross-border. At their core, smart contracts are self-executing agreements whose terms are directly written into code and placed on a blockchain. These contracts automatically execute when the pre-defined conditions are met (without human intervention). This method is far more transparent, secure, and allows for customizable automation in a way that has never been seen before.
If an exchange or transaction can only take place when a specific rate is met, it has the power to protect the person doing the transaction from getting exploited at a terrible rate (as in the current system). If the market reaches the rate they deem acceptable, the smart contract does the rest and converts the funds, while also recording the transaction on the blockchain, ensuring full transparency for all to see.
The shift in control here is very noticeable.
How Smart Contracts Improve International Transfers
What makes smart contracts so “smart” is that they leverage blockchain technology. This allows them to hold funds securely until highly specific, pre-programmed conditions are triggered. Currency conversion and fund transfers (or a combination of the two), therefore, are perfect use cases, cutting out intermediaries to speed up transactions and reduce cost.
Here’s an example. Suppose you instruct your smart contract like this “Convert $1,000 USD to EUR and send to Recipient X, ONLY if the USD/EUR exchange rate reaches 0.935 or higher”. The contract, which is digital and connected to the internet, monitors real-time market data, executing the instruction only at the moment the condition is met.
Who benefits from this? Imagine a small business timing their overseas supplier payments to improve their profit margins. How about a digital nomad or overseas worker making automated family support payments or remittances at optimal rates? When the user has full control over currency conversions and international payments, simple transfers transform into strategically optimized financial operations.
Using Deobanks to Ensure the Best Exchange Rates
For programmable finance to truly disrupt and reform international transfers and money exchanges, accessible and secure platforms are essential. To fill this role, we present deobanks (decentralized on-chain banks). These blockchain-based financial institutions offer banking services built on decentralized infrastructure, free from a centralized authority. They intelligently leverage a combination of smart contracts and stablecoins to ensure absolute transparency, cost reduction, and user control.
One deobank to keep an eye on is WeFi, a platform that will enable programmable transfers for optimal exchange rates. It will achieve this through an intuitive interface that lets users set their desired conditions without complexity.
WeFi will also allow its users to automate transactions based on personalized exchange rate triggers (similar to limit orders), eliminating dependency on traditional banks. For example, a user could instruct WeFi to “Convert received USD to EUR and deposit in my wallet, only if the exchange rate is 1.08 EUR/USD or better.” This smart contract infrastructure monitors and executes instantly when the rate is met, positioning WeFi as a financial tool truly aligned with user interests and needs.
Advantages of Sending Money Internationally with WeFi
Here are some of the compelling reasons to consider WeFi for your future international transfer needs:
- Transparency: Blockchain technology will ensure every transaction is done with clarity, low fees, and verification of all costs and rates.
- Affordability: Decentralized transfers cut out intermediaries, drastically reducing (or removing) fees, margins, and charges.
- Automated Optimal Exchanges: WeFi will empower users to set their own precise rules for currency exchange, with smart contracts executing the instructions.
- Security and Speed: Robust cryptographic security and near-instant transaction settlements will drive user confidence and guarantee access to funds.
Send Money on Your Terms, Not Theirs
Traditional banks and transfer apps prioritize profits, forcing you to accept weak rates and hidden fees with no control. Take it or leave it, it’s all on their terms. But fear not, this system won’t last much longer. New programmable financial tools, such as smart contracts, leveraged by deobanks to provide intelligent financial services, will shift the power completely.
We’re now entering a period of empowerment and control, where you call the shots for international money transfers and managing your own global finances. Tools like WeFi will capture the power of decentralization to help you start sending money internationally at the best rate, under the optimal conditions, to maximize user value. There are exciting times ahead.
