C & rsquo; is cheaper and faster & hellip; and could also help fight money laundering.
There is a lot of excitement surrounding how crypto could transform cross-border payments as we know them & mdash; make remittances, where workers from foreign countries send remittances to their relatives at home, much cheaper.
At present, & nbsp; The World Bank estimates that remittances sent through fiat channels result in an average fee of 6.75%. For someone with a modest income, this can take a substantial portion of their income. Although this is less than the 9.67% billed in 2009, there is still a long way to go. In the early 2010s, the G8 and G20 set a goal of reducing remittance costs to 5% & mdash; and the United Nations & rsquo; The Sustainable Development Goals also set a target of 3% by 2030.
Cryptocurrencies could help achieve these goals much faster. & Nbsp; Blockchain has the potential to reduce transaction costs by 40% to 80%, according to figures from Deloitte. But the benefits may not end there. Right now, it can take three to five business days for funds to flow through old-fashioned wired networks & mdash; not ideal for someone who needs money in a hurry. But on some blockchains, it is possible for payments to be confirmed within seconds.
The benefits may not end there. As Deloitte notes, blockchain transactions can be data rich & mdash; which means that metadata can be transmitted end to end. All of this can help fight money laundering and terrorist financing, two areas of concern to regulators. Many crypto platforms have also introduced Know Your Customer checks to verify users.
One of the crucial benefits that cryptocurrencies can offer is to unlock access to financial services for the unbanked. & Nbsp; Research suggests that 80% of consumers in sub-Saharan Africa fall into this category & mdash; and worldwide, a total of 1.7 billion people do not have a bank account. There can be a multitude of reasons for this. Financial institutions may not operate in their geographic area, these services may be too expensive, or consumers may lack confidence.