Introduction
According to data published by the planet’s pre-eminent banking authority, the World Bank, the Global Remittance Economy is worth over $700 Billion! Globalization has allowed for the opening up of job opportunities for individuals in different parts of the world.
Many individuals and families took help from relaxed Visa norms for work and study and got access to high paying jobs in foreign countries.
However, as their families are still back home in their native countries, they have to send back the money, every week, month, or day, depending on the need.
The remittance economy is one of the single biggest economic phenomena, which define the world’s financial systems. Hundreds of billions of dollars move through banking systems, payment gateways, and other mediums of retail transfers.
We discuss the world’s remittance economy in great detail in the article. We will start by listing some of the primary problems individuals face when sending money back home. In addition, we will conclude by stating how Bitcoin transfers can help change the face of the world’s remittance economy forever.
Problems of the Current World Remittance Economy
In recent years, several researchers and economists have looked into the problems experienced by people who send remittances back home. Some of the major problems are-
- High Commission and Intermediate Charges-
While there are a ton of options available to individuals when it comes to sending money back home, almost all of them charge anywhere between 5%-10%. This is a significant fee, given that millions of people work in small menial jobs all over the developed world.
- Victim of Scams and Touts-
Many people who are not well-educated often fall prey to scam artists who promise to deposit the money back home but end up disappearing with it. All over the Middle East, millions of South Asians work as laborers, in construction, and in several other odd-jobs.
- Specialized Payment Gateways are too Technical-
It should be pointed out that many of the payment gateways might seem to be too technical in nature. PayPal or Transfer Wise in addition to being expensive requires some kind of technical knowledge. Sometimes, it gets tricky and overwhelming for individuals who then go to the touts.
Can Bitcoin help in Removing the Impediments of Remittances?
Many experts studying cryptocurrencies like Bitcoin point out that they can easily eliminate the major problems, which users face when transferring money back home.
For starters, Bitcoin does not involve any intermediaries, hence the question of paying commissions does not arise. This means that every money, which is hard-earned gets delivered back home. Something, which poor people can highly benefit from.
Secondly, Bitcoin is safe and secure. This means that you do not have to worry about your money getting into the wrong hands at any point in time. A few hundred dollars to a poor family back home in India can mean the world for them.
Thirdly, as Bitcoin operates on Blockchain, every financial record of the transaction is maintained. This would be very handy for people who want to understand how much money they send back every week or month.
Bitcoin and other cryptocurrencies can help people get the maximum returns from their earnings and transfers. If you cumulate the amount of money, which will get saved from every commission fee, the same will become quite a huge figure.
The Final Word
According to the leading Bitcoin trading and investing platform, bitcoin-up live app, Bitcoin use in the remittance economy should be encouraged by nations. However, the same is not done, as governments profit heavily from the commission fee charged by the banks.
While the same can be done for someone earning thousands of dollars in a foreign land, for a poor daily wage laborer working fourteen-hour shifts in the scorching Middle-Eastern sun, this should not be the norm.
Only time will tell how far Bitcoins and other cryptocurrencies will be adopted in the remittance economy of the world.