Businesses and people who have relocated abroad move hundreds of billions of dollars every year. This trend is expected to continue for the foreseeable future, with annual growth rates double digits.
According to the World Bank, remittances hit a record high in 2018.
Research demonstrates that the remittance business is massive. It is estimated that 800 million individuals globally are directly supported by remittances from the developing world. The 2030 Agenda for Sustainable Development explicitly mentions migrant remittances as a vital tool for promoting inclusive growth in origin, transit, and destination countries.
The article below will tell you more about where blockchain stands right now in the international remittance market. For further details, visit http://thecryptogenius.software.
Role of Blockchain
The international remittance sector looks to be embracing blockchain technology at a cautious but steady pace.
Early in 2018, MoneyGram became the first global money transfer provider to declare that it would be testing Ripple’s blockchain technology. Western Union quickly followed suit.
They launched a partnership between Singapore-based InstaReM and Brazil-based BeeTech in mid-2018 to speed up and lower the cost of money transfers between South America and Asia-Pacific. After both firms implemented Ripple’s blockchain technology, this partnership was feasible. Banks from all around the world are beginning to see the benefits of the blockchain.
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Cost of Sending Remittances
Sending money from one nation to another is currently more expensive than the United Nations’ Sustainable Development Goals target transaction cost of 3%, which is unacceptable in many low-volume sectors, i.e., cash movements from one country to another.
Advantages of Blockchain
Although it is still the beginning, blockchain can revolutionize international money transfers.
- Banks and the vast majority of international money transfer providers are particularly vulnerable to various forms of cybercrime because of the centralized nature of their operations.
- The decentralized nature of blockchain, on the other hand, makes it extremely difficult to hack. In addition, all transactions are recorded in a digital ledger with unique entries that you cannot alter.
- In many countries of Asia, Africa, and South America, there is still a lack of access to traditional banking options. When it comes to sending or receiving foreign money, this harms persons from these locations. However, there is a lot of mobile phone use in these locations. Sending and receiving cryptocurrencies may be as simple as clicking a button in a Blockchain Era by online blockchain wallets.
- Unlike traditional money transfers, cryptocurrency transactions do not rely on regional boundaries and may be completed very instantly. In most cases, international money transfers still take days to be processed by most significant banks, depending on where you and the receiver live.
Numerous financial institutions and businesses are still wary about abandoning traditional currency and cash for digital currencies. Still, recent surveys by the World Economic Forum revealed that a large percentage of banks would use a blockchain-based system for at least a portion of their operations in the coming years.
International payments and bank transfers are two of the most prominent examples here.
According to the report, the banking industry could save between 15 and 20 billion dollars a year starting in 2022 if large-scale adoption occurs in the next few years.
Also, read How a Digital Currency Might Help Save the World
Companies Offering Crypto-Based International Transfers
Many businesses have already created their own blockchain systems, hoping to profit from the expansion of cryptocurrency. Many businesses, however, are still devising strategies to implement the system and profit from it.
The following are some of the companies that have already begun to offer worldwide crypto-based transactions:
Disadvantages of Blockchain
International bitcoin transfers have the drawback of exposing users to a second time-consuming currency conversion process. Think about transferring money from the United States to Canada, for example. To begin, you’ll need to pay for a cryptocurrency with U.S. dollars from your bank account. It would help if you then exchanged Canadian dollars by selling the cryptocurrency on the market.
Since blockchain is impacting a wide range of industries, from banking to e-commerce to politics, it appears that it is poised to completely transform the way individuals send and receive money internationally shortly. On the other hand, its development depends on how rapidly individuals begin to incorporate bitcoins into their daily lives.