Since its creation in 2009, there has been a lot of hype of bitcoin. Over time, other cryptocurrencies such as Ethereum, Ripple, Litecoin, Peercoin, and Golem, have also gained popularity. While there is no certainty surrounding the future of cryptocurrencies, it is plain to see that the blockchain model offers an array of possibilities.
Unlike fiat money, currencies declared legal tender by governments, blockchain-based cryptocurrencies are digital in nature. The possibilities they offer the overseas money transfer market are varied. For instance, while sending $50,000 overseas through a bank might not be particularly easy or quick, sending the equivalent in a cryptocurrency such as bitcoin takes no more than a few minutes.
The international remittance industry can do well to look at the benefits that blockchain technology has to offer:
Some aspects that might serve as roadblocks include:
The last couple of decades have experienced a considerable shift in this industry, mainly because of FinTech players such as WorldFirst, TransferWise, CurrencyFair, and OFX entering the picture. The blockchain effect in this field is already visible, with companies such as Abra, Circle, BitPesa, Coins.ph, and MOIN making their presence felt. With the payment app Circle, users don’t have to handle cryptocurrency at all, and they still benefit through no fees for sending or receiving money.
Several leading banks the world over are looking at adopting blockchain technology for different purposes. Crédit Agricole, a bank in France, has already started using Ripple’s blockchain technology for making cross-border transfers on a trial basis.
It is only a matter of time before blockchain technology makes cross-border money transfers even more cost effective. The technology will have a positive effect on processing times, with crypto transfers going through in near real time. What will also work in the technology’s favour is the security it has to offer.
Jon works as a researcher with iCompareFX, a website that lets its users compare the world's leading overseas money transfer companies. Outside of work, he likes exploring music from genres such as the blues, alternatives rock, and reggae.