According to a recent Coinbase blog post, cryptocurrencies like Bitcoin and Ethereum could potentially save people in the US billions of dollars in remittance fees. Coinbase is actively working on developing trusted products that capitalize on the advantages of blockchain technology. They believe embracing this innovation could enhance economic freedom and opportunities worldwide.
The blog post highlights the importance of remittances, which are funds sent by workers in one country to their loved ones in another. Despite our interconnected world, the financial system still struggles to keep up, causing difficulties for the 1 billion people who rely on these transfers. As per Coinbase, remittances contribute a massive $781 billion globally and play an essential role in supporting growth, boosting income, and acting as a form of social insurance.
However, the process of sending money abroad is far from efficient, with high fees and lengthy transfer times plaguing the current system. Coinbase points out that Americans, who make up about 25% of global remittances, are particularly affected by this outdated process. With an average fee rate of 6.18%, they spend nearly $12 billion annually on remittance fees alone.
According to Coinbase, crypto has the potential to make a significant difference in both the cost and speed of international money transfers. By leveraging cryptocurrencies, fees can be reduced by about 96.7% compared to the traditional system. The average wait time for crypto transfers is only 10 minutes, a sharp contrast to the 1 to 10 days it takes for conventional remittances.
The blog post also mentions that 1 in 5 American adults already own crypto, and in some states, over 40% of crypto-owning voters use it specifically for sending money across borders. Coinbase emphasizes the need for American regulators to recognize the value of responsible crypto products and services in modernizing this antiquated system, ultimately benefiting hardworking Americans supporting their families and friends abroad.
Featured Image via Pixabay