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Blockchain-powered International Remittance

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After the popularity of AI (Artificial Intelligence); the fintech sector is turning towards cryptocurrencies and their underlying blockchain technology. Blockchain, a type of distributed ledger technology (DLT), has the potential to completely transform any established financial institutions with lower expenses, faster payment execution, enhanced transparency, and verifiability of transactions.

In today’s financial world, the word remittance is frequently used across the globe. Cross-border payment transactions between an immigrant and his or her native country are referred to as the remittance economy. In many developing countries, it is the source of economic growth and an important part of the nation’s Gross Domestic Product (GDP). By 2026, the size of the global digital transfer market is expected to reach $33.9 billion, which is estimated to increase by CAGR of 17.2% in the predicted period.

Currently, a cross-border payment is very expensive and tedious process that can involve a few people on both sides of the transaction. The high fee for international bank transfer led the UN (United Nations) to set up a Sustainable Development Goals 2030 target to reduce migrants’ transaction costs to under 3% of their current estimated average of 7.1%. The high fee can be linked with the presence of multiple players in a foreign fund transfer, including the source bank, the central bank, corresponding banks, and the target bank. Every bank along the road charges an amount for the services making the process a lengthy one.

Blockchain technology makes this process faster and more efficient enabling the transfer of money without the involvement of any third parties. Cryptocurrencies carry the possibility of creating a new native digital asset market that is decentralized. Imagine sending money to the family in the home country to be as simple as sharing a photo on an instant message. Major players in the finance sector consider blockchain solutions to soon offer the preferred user experience.

What is Blockchain Remittance?
Blockchain remittance is a financial system that integrates blockchain technology with the diverse requirements of cross-border payments. In contrast to the traditional international remittance methods, blockchain remittance doesn’t depend on centralized institutions such as payment systems, currencies, and banks. Rather the transaction happens between the two parties with a mobile wallet or a bank application and blockchain network as the only mediators.

This is a chance for traditional transfer payment operators to adapt and reorient their business models with blockchain advantages.

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