With the growth of the global trading markets, also the number, the increased in the foreign working people, constantly. Most of them send back a large part of their income as Remittance to their home countries. With around 250 million migrants in the world, the volume of global Remittances has grown, according to the world Bank on an industry with a volume of incredible, 689 billion dollars. Of the 689 billion up to 528 billion go to developing countries. Some countries are heavily dependent on Remittances.
In Nepal, remittances account for 33 percent of their 27 billion Dollar gross domestic product. This has a significant impact on some countries, as this much-needed foreign exchange reserves. This Form of modern economic migration is normally a good thing, both for the country receiving the workers, as well as for the country, which is the goal of the Transfers. The country in which the worker is working, at the end, of labour needed for its economy.
Basically, you can say that the entire Gulf region was built by immigrants, and today is conducted by them. In return, the countries which send workers to get money for your business is necessary, as a rule, there is only limited scope for foreign investment. Many families around the world life only of the sent home money. If you take this into account, Transfers are a huge business, and many will benefit. Every Dollar taken by banks as a fee, is a Dollar less for the families of the workers who need it the most. Any cheaper, alternative Form of payment can mean a huge relief for the financial Situation of many families around the world.
How does a Bank Transfer?
If someone wants to send money to Loved ones abroad, for example from Vancouver to New Delhi, then it is to be paid first in the case of a local Bank. Then, the local Bank sends the transfer amount to a banking partner in London. It will take some days until you receive a confirmation of this transaction. After receiving the confirmation, the money will be sent to a Bank in Dubai, with the help of the Bank of Delhi has a partnership. The same process of waiting on the confirmation. Finally, the money is forwarded to New Delhi. In this System, there are many instances, which all want a Commission for their work. The result is that such a foreign Bank transfer is very expensive and the original shipping money will not reach the area where it is needed.
According to the world Bank, approximately 25% of money transfer institutions charge fees of more than 10%. So a 100$ wire Transfer in the home, 10$ fees will cost you. Apart from the fact that Transfers are expensive, the traditional money transfer channels slowly. Crypto-currencies can eliminate the need for intermediaries and the need to wait for confirmations – moreover, the costs will decrease considerably.
The rise of crypto-currencies
If someone with Bitcoin or Ethereum money from Vancouver want to go to New Delhi to send, it can send the Person the crypto-currency from your Wallet to the Wallet of the recipient in New Delhi. The Transfer would be carried out under consideration of the normal Transaction time, almost immediately. In this case, only a small part of the transfer amount would be deducted as a fee. In the past, transactions with Bitcoin were delayed for more than a day, but with new improvements such as the Lightning network, reduced the risk of a delay considerably. Some specifically for the internal payment traffic between banks developed solutions, such as Ripple, have already been developed, but have not yet used on a large scale successfully.
Crypto is the future?
Thus, a new technology replaces an existing one, you should not only be as good as the existing, but significantly better. In view of the benefits of crypto-currencies compared with traditional money transfer channels, the question arises: Why has taken the Blockchain the transfer industry?
Firstly, you must keep in mind that Transfers are a highly regulated market, and to talk to the regulators is not very good on crypto-currencies. So, for example, in India, have been banned, the country with the highest volume of Remittances, crypto-currencies altogether. Banks and private persons are not permitted to hold crypto-currencies or to trade. Although the banks have shown interest to use crypto-currencies for the settlement of Bank Transfers, has been ignored by the RBI, the Central Bank of India, these efforts. Non-resident Indians to send back about 80 billion dollars by wire Transfer to India and pay about 4 billion dollars in fees. We assume that crypto-currencies can reduce the amount of fees to 1 percent. This would mean a saving of around 3.2 billion dollars, when you consider that the average annual income of an Indian is 1670$. This is a Savings of 3.2 billion dollars, equivalent to the annual income of around 2 million Indians.
It remains to be seen whether banks, the Blockchain use for payment processing and in fact, the charges reduce, or if they charge the same fees, and thus only the time required to reduce. Some people have due to the crypto ban in India, Transfers a decision on decentralized Exchanges, in order to circumvent the ban. This method, however, is practiced only by a few Indians.
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