Undoubtedly, Blockchain technology is routed to solve the problems suffered by millions of migrants worldwide.
Remittances, a billionaire market
A market that exceeded $ 450 billion USD in 2017, only referencing remittances sent to medium and low income countries. These are projected to have a growth of around 4% by the end of 2018, according to data from the World Bank.
As for global remittances, these will exceed $ 640 billion USD. Countries such as India, China, the Philippines and Mexico top the list of countries that benefit the most from world remittances.
Factors that affect the growth of remittances
There are two factors that can affect the growth of formal remittances. The first has to do with the migration policies being adopted by the main countries from which shipments are made.
The measures adopted by banks to reduce the risk and a greater regulation imposed on money transfer operators as a second factor make it possible to foresee a stagnation in the global remittance market. With migratory policies adopted by many countries, a migrant in transit could not make any type of shipment.
High shipping costs originated by financial regulations and exclusive alliances between national postal companies and money transfer entities locate the fee or tax rate in an average range between 7% and 10%, being the South African region the one with the highest cost for sending remittances. Thus, a migrant who sends US $ 300 from the USA to South Africa will have to pay US $ 30 of tax or fee, and their their relatives would only receive $ 270.
Returning to the figures provided by the World Bank, of the $ 450 billion sent in remittances in the year 2017, around $ 31 billion were from shipping costs.
Opportunities in the Crypto world
The Crypto world is finding great opportunities in the remittance market. There are several points to overcome as well, one of them refers to the persecution by entities that have dominated this market for decades, for example WU or Moneygram, among others.
But without a doubt, the Blockchain technology is routed in solving the problems suffered by millions of migrants worldwide, such as more migratory regulations and transaction fees..
Currently, there is a series of Blockchain platforms that, in partnership with other partners, use this technology and are serving as a channel for remittances to be integrated into the Crypto market, with fee costs of around 3%, a percentage that is expected to decrease to 1% as more Crypto platforms are involved. Thus, a person in a country like USA uses US $ 300 in some Crypto, his relative in South Africa would receive in his local currency the equivalent of US $ 291 approximately.
However, there are still many challenges for the Crypto Market to overcome, but without a doubt it becomes the best alternative for sending remittances by migrants to their home countries. To have a broader vision of the path that Blockchain has to travel in this market niche, the following video expands the figures of remittances worldwide.
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