Binance Report Says Blockchain Technology Could Help India Reduce its Remittance Fees
Binance has released a new report in which they explain how crypto and blockchain can revolutionize the remittance market in India. India is one of the most powerful countries on earth. Its economy is growing at very fast rates and it will clearly become a world power. Using blockchain technology, the country could improve many of its productive sectors, including the remittance market.
India has been growing during the last years at very fast rates. The country has more than 1.36 billion people and the population will surpass this of China. The nation has also a very large flow of money that moves from and to the country. Most of these funds tend to be moved in the form of remittances.
The remittance market is very important for India. There are around 31.2 million migrants that send funds to their families back home. In order to send these funds, they have to rely on companies such as Western Union or other local firms that operate in the country. Each year, India receives $80 billion from remittances. In the future, this number is also expected to keep growing.
Traditional financial systems that process these large transactions are not usually the best option for processing these transfers. In general, they have very high commissions and they are slow to process the payments. Basically, it is very inefficient for those using traditional services to send money to India.
According to data provided by the World Bank, the average cost of remitting to South Asia was 5.4%. That means that over $4.32 billion in transaction fees go to remittances. This is a large amount of money that would have a big impact on the Indian market.
Blockchain technology could have a very positive impact on this market. Using virtual currencies to transfer funds would make the whole process much more efficient and easy for users. This would reduce costs, having a clear positive effect for those sending funds back to India.
The average Bitcoin transaction fee is currently ~$0.30. Thus, sending a transaction in Bitcoin is much cheaper than using traditional financial services that are costly, slow and expensive. Moreover, the funds can be available in just a few minutes rather than in days or hours.
Some months ago, rumours spread regarding the possibility of Facebook of issuing a digital currency for the remittance market in India. Apparently, the digital asset would work on top of the WhatsApp platform and it would allow individuals to send fast and cheap transactions across borders. Nonetheless, Facebook did not confirm or deny this information.