The international remittances industry is worth over $540 and is a significant source of wealth for the more than 1.7 billion unbanked populations worldwide. Many low- and middle-income nations rely heavily on foreign remittances for basic needs and business ventures. However, the cost and process of moving money across international borders have been very high and complex in the past years, restricting many populations from accessing capital.
Bitcoin proponents argue it is the only medium that could genuinely eliminate the multiple hurdles experienced in cross-border transactions. The following article discusses how Bitcoin can improve foreign transactions.
Low-cost Remittances
The traditional payment systems stipulate money transfer operators as the agents that customers must go through whenever they need to move money across international borders. Those operators have vast networks comprising various service providers. And each of the participants in those networks usually gets a cut from every remittance, resulting in very high transaction fees.
The costs are even higher when remitting small amounts of money. The average fees range from about 5% to 9.3%, depending on the destination of the funds. Bitcoin offers reprieve because its transactions do not involve intermediaries, significantly reducing the transactional fees. All Bitcoin transactions occur virtually on the blockchain, not subject to the hefty costs the conventional money transfer operators incur.
Flexible Transactions
Moving money across international borders in fiat currency is subject to various restrictions imposed by governments and regulatory authorities. Sometimes, the rules limit the amount of money that people can send to foreign countries. In some regions, people must go through the banks or remittance service providers to send or receive money internationally, which is also very restrictive.
Bitcoin offers greater flexibility in foreign transactions because it is a decentralized monetary system. That means it has no central authority to regulate its usage, enabling people to transact worldwide without outside intervention. Bitcoin users can send and receive any amount of money across international borders at their convenience, without going through the banks, remittance service providers, or regulators.
Bitcoin also ensures more flexibility since it allows users to convert their tokens into any local currency that they need quickly. For example, crypto exchanges such as bitcoin billionaire website support up to 100 local currencies. Besides, Bitcoin ATMs also permit users to send and receive money in different currencies.
Enhanced Transactional Security
Bitcoin also enables businesses and individuals to conduct foreign transactions with utmost security. The elimination of third parties from transactions is one of the reasons why it is much safer to use Bitcoin. However, Bitcoin’s underlying blockchain technology is the crown jewel, validating all transactional data using encryptions.
The blockchain verifies and compiles transactional information into blocks with encryptions. Besides, it validates the data on a permanent digital shared ledger, making it very difficult for the users or any third party to compromise the records. That ensures better protection for users’ information and transaction records. Bitcoin’s shared digital ledger also enables businesses and individuals to observe transparency in international transactions.
Faster Payment Processing
Conventional money transfer operators like banks and other payment service providers usually take several hours, days, or weeks to process international remittances. That makes them inconvenient, especially in emergency cases whereby people need to send money to their families or friends abroad urgently. The Bitcoin network processes foreign payments in minutes, making it easier for people to move money across far-flung geographical borders. The Bitcoin network is undergoing continuous scalability to make the process even much faster in the future.
As many experts have noted, Bitcoin is the ideal medium for international remittances, ensuring relatively cheaper, safer, and faster foreign transactions. Besides, its decentralization also offers greater flexibility, enabling users to transact worldwide without outside intervention.