In recent years, cryptocurrency and blockchain have become widely popular. Besides, the new technology has managed to gain global awareness and secure various use cases.
One major sphere that has been greatly affected by the digital asset space is remittance. Alongside Coincenter, we will be taking a cursory look at the Mexican community and their dealings with digital currencies.
One of the world’s largest remittance corridors is located between the United States and Mexico. As of 2018, Mexico receives over $35 billion from the remittance inflows of migrants, who send money via wire transfers. Currently, it accounts for about 96% of the total global remittances.
Executing these transfers is, however, both complex and expensive. On a universal scale, the average cost of a $200 remittance is about seven percent. Currently, the cheapest region for accepting money is South Asia (5.2%). While Sub-Saharan Africa is the highest (9%). Apart from the outrageous prices, even more depressing is the time it takes for these payments to get to their final destination. The emergence of digital currencies has ameliorated the state of affairs.
Advantages of crypto remittance
Using Mexico as an example we will understand how important cryptocurrency is to remittance.
Top of the list is the fact that crypto-based remittances arrive about 15 days earlier than normal wire transfers.
According to a June 2019 report by the World Bank, crypto-based cross-border transaction is currently ranked as the most affordable means for remittance transactions. With an average cost of about 4.88%.
It is a well-known fact that this money helps improve the living standard of many Mexican families. However, about 56% of Mexicans are unbanked, which means that it’s difficult for them to receive the money. Enabling massive cost reduction and fast receipt of funds is one of the ways by which the cryptocurrencies are helping to solve this issue.
Cryptocurrency is an amazing technology with many benefits. Dash recently partnered with Cubobit to launch Remezaza – a remittance platform. Ripple also partnered with SCB to facilitate faster cross-border transactions.
All in all, it is a good thing that global crypto adoption is happening. Many countries have decided to welcome this technology. That said, for Mexicans, crypto is even more important. For them, it’s a safe haven when it comes to remittance services.