Report: Cryptocurrencies on the rise in remittance transactions
Cryptocurrencies, since its inception, were seen as a universal currency, not controlled by a single government and capable of cross-border transactions, and now this initial purpose it coming to fruition. Decentralised currency in the remittance space is on a rise, as indicated by a recent report by Clovr.
According to data from the World Bank, in 2017 along over $148 billion was sent overseas from the United States. Clovr, as part of their research, surveyed 707 people, of which they concluded 15.8 percent had used virtual currencies to send remittances back to their countries.
Based on the above share, Clovr pegged cryptocurrencies to be behind three other forms of cross-border remittance systems i.e. online services, money transfer series and traditional wire transfer.
Clovr suggests that traditional remittance giants like Western Union and MoneyGram are preferred due to their name recognition. On the other hand, these same companies have a high cost of operations, the report highlights “super-taxes,” on fund sent to countries in Africa.
The report suggests that given the above factors, the industry can be “disrupted,” through decentralized currency, particularly because cryptos are a “cheaper and faster way to transfer funds.” It further adds that if a retail giant like Starbucks and a computer technology behemoth like Microsoft can accept cryptocurrencies as payment, remittance can embrace the virtual currency world as well.
“By avoiding the high transaction fees and conversion rates typically associated with transferring funds abroad, you can take a few extra steps (including converting the government-issued currency into cryptocurrency and then back again), potentially getting significant savings,” stated the report.
Men were more likely to have employed cryptocurrency transactions than women, stated the report. A further breakdown indicates that younger and more affluent men were more likely to use cryptocurrencies.
One in three men and more than 50 percent of women were unfamiliar with the concept of cryptocurrencies. Blockchain, the underlying technology was even more obscure to the respondents.
“While the jury is still out on bitcoin and how cryptocurrency, in general, will fare moving forward, many remain adamant that this is the future. Cryptocurrencies continue to grow, but big banks and mainstream investors are sometimes hesitant to get involved,” concluded the report.
Image via Shutterstock
Follow us on Twitter