Many Indian, Pakistani, Bangladeshi, and Filipino people residing in other countries are increasingly experimenting with cryptocurrencies to send money to their families back home and save on commissions charged by wire transfer companies and other middlemen.
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With approximately 2.5 Million Indians migrating overseas every year, India holds one of the highest numbers of migrants in the world. Remittances into India are pegged at about $80 billion, or approximately Rs 6 lakh crore, in 2020. These are mainly transferred through banking or other financial channels.
But in recent times people are moving away from traditional transfers and adopting crypto for remittances. As reported by Economic Times, Abir Roychaudhary, a 39-year-old engineer working in Qatar, has transferred around ₹2 lakh to his family based in Mumbai every month using traditional cross-border, cross-currency players. In October for the first time, Roychaudhary bought cryptocurrencies worth half that amount – ₹1 lakh – and his wife who has access to his wallet could use the sum when needed.
Indians are warming up to crypto assets as well as decentralized finance. Remittances through crypto are expected to grow, especially because transferring smaller amounts can be expensive through traditional services.
Several blockchain startups like Satoshi Citadel in the Philippines have started offering services to facilitate bitcoin remittances in a user-friendly way. According to experts, Bitcoin was the preferred choice for remittances but with its transaction costs rising, currencies like Ripple and Dash are good replacements due to substantially lower fees.
According to industry trackers, most of those looking to remit money are doing so through some of the less volatile crypto assets such as Stablecoins.
Why is crypto remittance becoming more popular?
Experts point out that remittances in crypto are becoming more popular due to a lot of reasons.
Traditional transfer fees are too high
Traditional transfer method takes time while transferring internationally
People want to protect themselves against hyperinflation.
Crypto is becoming popular in places with high inflation like Lebanon, Turkey, and Venezuela.
Cryptocurrency remittances have become a lifeline for people from Afghanistan and other countries affected by conflict.
One of the key reasons why people migrate to other countries is to earn better, so paying expensive remittance fees contradicts leaving the country for better pay. Expat Indians have found a better way to send money across borders. This move from wire transfer to crypto will cut remittance costs drastically while enabling a faster and safer transaction as visible on the blockchain network.
New systems powered by crypto-based global payment solutions like Ripple are transforming the future of cross-border payments while more such technologies are set to emerge.
P.S: KuberVerse is an educational initiative. Anything expressed here directly or indirectly is not investment advice. And we ask you to do your own research before investing.
Disclaimer : Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. The information provided in this post is not to be considered as investment/financial advice from CoinSwitch. Any action taken upon the information shall be at user's own risk.
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