The Major Impacts Of Cryptocurrency On Remittances

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Cryptocurrency, this is a digital currency meaning it cannot be seen or felt with our physical eyes or hand, cryptocurrencies operates on decentralized networks which is based on blockchain technology this blockchain technology ensures transparency and immutability, through cryptographic protocols ensures security.

Cryptocurrencies since it was introduced in the year 2010 have significantly influenced different financial transactional aspects of the world especially when it comes to remittances, the cryptocurrency offers services and provides features that are superior to that of the traditional remittance industry, some example of cryptocurrency includes Bitcoin, Ethereum and Steem.

With all that been said please join me in this post of mine as I will be looking at, explaining and exploring some of the different significant impacts and effects of cryptocurrencies on the different aspect of the remittance process or industry.

• IT HAS REDUCED THE COST OF TRANSACTIONS

Initially the traditional remittance services often require high transaction fees which sometimes exceeds the usual 10% they charge of the amount being transferred, particularly for small amounts or transfers to developing countries so we can say that the firt impact or effect of cryptocurrency on remittances is to address this issue of high transaction cost.

These costs basically is comes from or is incured as a result of intermediaries, currency conversion fees, and the costs of operating and maintaining a physical branch in the different countries but unlike or in contrast, cryptocurrency based remittances reduces this cost by facilitating peer to peer trading which eliminates the need for intermediaries or a physical branch.

Therfore, owing to this improvement and implementation of advanced effective and efficient features by the superior cryptocurrency remittances the transaction fees that is incured when one processes or execute a financial transaction as along as it is done with cryptocurrency whether to developing countries or not is much lower, often less than 1% of the cryptocurrency transferred.

• INCREASED TRANSPARENCY AND SECURITY

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Another implication or impact of using or implementing cryptocurrencies in remittances is that cryptocurrency operates on blockchain technology and as a result every cryptocurrency transaction remittance or what not is going to be based on the basic and fundamental principle and concepts of the blockchain.

This basically means that remittances done or executed with cryptocurrency is inherently going to be transparent and secure or free from manipulation or alteration owing to the fact that every transaction is recorded on a public ledger that is immutable, tamper proof and its details or records cannot be manipulated by anyone.

Additionally, this transparency reduces the risk and potential of users participating in fraudulent and corrupt activities, on the other hand, the security provided by cryptographic algorithms and protocols helps ensures that transactions are tamper proof and can are executed with a high degree accountability and as such can be trusted.

• FOOSTERS ECONOMIC GROWTH

Another implication and impact of cryptocurrencies remittances is that it has the potential to facilitate and drive economic growth and development by basically providing and creating new and innovative financial tools and opportunities for individuals to get into or get involved in entrepreneurship.

To illuatrate what I mean by this take for instance, the individuals on the receiving end of a transaction or remittances in cryptocurrency, these recipients have the opportunity to reinvest their funds in their community local businesses, pay for goods and services, or even save and as a result earn interest in cryptocurrency based financial services.

Additionally, the introduction of cryptocurrency remittance can cause or create competition between the traditional industry and as a result of this competition there will be increased innovation and efficiency in technology and operations as both parties try to out work and out perform the each other.

• INCREASED ACCESSIBILITY AND CONVENIENCE

Another impact or effect is that the cryptocurrency remittance platforms are easily accessible and are basically functioning twenty four hours a day and seven days a week, unlike the traditional banking systems which operate within specific business hours and will be closed on weekends and holidays.

This all hours every day accessibility increases reliability and participation in the cryptocurrency remittance platforms seeing as it enables and allows its users to send and receive funds at any time, this alone is very attractive as it offers greater convenience.

Additionally, the introduction of mobile wallets has made it easier for people to adopt and implement cryptocurrencies for their financial remittance transactions, even if they lack the technical know how.

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In conclusion, the introduction of cryptocurrencies and his adoption as means of remittance has introduced a lit of mostly positive effects and impacts on the remittance industry seeing as it offers innovative solutions that has achieved reduced costs, faster transactions and enhanced security.

However, I would also like to mention something I think is also important when it comes to adopting cryptocurrency and that is the challenges and risks associated with using it such as regulatory uncertainty and volatility of its market.