Say Goodbye to Money Transfer Services
Cryptos have been cloaked in promises since their inception.
“Cryptos are going to kill banks!” Or “Cryptos will change how we trade stocks!”
It’s been a lot of talk with little action so far.
That’s about to change.
Blockchain technology — which underlies cryptos — is creating a brand-new financial system. It’s known as decentralized finance, or DeFi.
With DeFi, you don’t have to rely on brokerages, exchanges or banks. Instead, you use smart contracts on a blockchain.
Can you imagine a world with no banks?
So far, we haven’t seen crypto used in the real world. Instead, we’ve only heard about its investment possibilities.
But now, we are finally starting to see crypto living up to its extraordinary DeFi potential.
And it’s all thanks to remittances — or money transfers.
Crypto Adoption Is Revving Up
According to Chainalysis, the developing world is driving global crypto adoption.
In its latest Crypto Adoption Index, countries were scored on factors such as number of nonprofessional crypto users and transaction volume — weighted in favor of countries with fewer internet users.
When these scores were ranked, low and middle-income countries were in the top seven spots.
There’s a simple reason for this trend. Crypto makes it easier to send money to other countries.
Prior to crypto, your choices were transfer services like Western Union or a bank.
Both of these are unattractive options.
According to World Bank data, transfer services charge 6.38% on average. But banks can charge an insane 10.66%.
That’s over a tenth of your funds eaten up by a middleman!
The United Nations has a goal of a 3% average fee, but this is almost out of reach. You see, these middlemen control the legacy infrastructure required to move money. They have no incentive to reduce their fees.
And that’s just one obstacle to moving money internationally.
There are also unfavorable exchange rates, limited operating hours and daily exchange limits.
Not to mention, transferred funds can take three to five days to get to their destination.
It’s no wonder people are turning to crypto.
With crypto, you can send money across the globe instantly for a fraction of the cost.
Take Mexican crypto company Bitso, for example.
With a million users, it handles over $1 billion a year in U.S.-Mexico remittances. And it only charges $1 for every $1,000 transferred.
That’s just a small part of the market.
Insider Intelligence recently noted that the biggest players in crypto remittances are IBM with a presence in 72 countries and Ripple in 55 countries.
Crypto is finally dipping its toe into finance, and it’s sure to change everything…
Crypto: The Bank of the Future
Even if you don’t regularly send money across borders, this is a big deal.
The crypto market has been notoriously volatile. Most of its value was based on its future potential.
But now, we’re starting to see that potential being realized. As a result, valuations are starting to be more concrete.
Money transfers are a big step in demonstrating crypto’s usefulness. This market is worth $540 billion today. It’s expected to reach $930 billion by 2026, according to Allied Market Research.
And crypto has a growing role in this sphere. As more people start using it to transfer money, its credibility will improve.
As it does so, crypto’s adoption and value will also skyrocket.
But finance is only one industry that cryptos are set to disrupt.
To find out more, check out Ian King’s “Crypto’s Third Wave” presentation here.
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