Will Blockchain Actually Help To Speed Up Remittances?
Some people in the financial market argue that blockchain will not help banks to speed up remittances. Is it true? According to these people, one of the greatest promises of blockchain evangelists is that the technology will make it cheaper and easier to remit money.
Surely, there is always the buying of illegal goods, but most folks would be more interested in the legal part of the tokens. Some say, though, that the hype has become more prominent than the real use case, which is something that is actually quite more common than we would like to.
Khalid Fellahi, from the Western Union’s digital business section, he states that the company is creating technology for money remittance in over 45 countries and that the business grows about 20% a quarter.
According to the executive, the company is already able to make fast transactions without needing any help from the blockchain technology at all. What can Bitcoin or other tokens do to make this process faster, then? Fellahi does not believe that the tokens can do a lot at the moment.
Fellahi defends that it is actually a lot of work to make sure that all transactions are safe and compliant with the legislation of many different countries. As the company is focused on enabling the customers to make safe transfers and also to prohibit them of laundering money, they have a lot of work to do.
Cryptos do not really help in the process, according to him, because they are too volatile to move around and they have many complex issues that are still not solved. Cryptos do not solve essential problems like getting the cash to a system and sending it abroad. There is no connectivity at the moment that links the retailers to the ecosystem, Fellahi affirms.
The transactions do not make sense because there is simply not enough demand. He does not understand how a technology that is not widely adopted and has a severe problem with volatility will be able to actually solve the issue. Even if you can use Bitcoin to change USD to GBP, for instance, you would still need outside institutions because you can only send the BTC.
Bitcoin does not have compliance systems and it is very decentralized. He does not seem to understand why you should use the blockchain technology for currency exchange or currency delivery when there are simply better methods.
More Issues In The Industry
You can also add to the problem the fact that cryptocurrencies, in spite of all the talk about how safe they are, are simply not very secure most of the time. A lot of people get hacked and blockchain companies are constantly being robbed and losing their money all the time.
Last year, Equifax was hacked and was unable to do anything about the personal information of 140 million people that got out in the world. More recently, Goldman Sachs decided not to open a Bitcoin desk anymore. All of this can represent that the hype over the blockchain technology is dying out and that people are seeing just how much needs to be done.