Practical Use of Blockchain: Remittances
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In 2018, global remittances reached $689 billion, with significant fees impacting senders and receivers, especially for top countries like India and China. The document highlights the historical context of remittance discussions, traditional companies' challenges, and the rise of online and blockchain solutions, including their associated problems such as high fees and volatility. Recommendations include backing up seed phrases and managing coins securely.
Practical Use of Blockchain: Remittances
- 2. Remittances Worldwide ● 244 million immigrants ● $689B in 2018 (10% increase from 2017) ● $60B fees
- 3. Senders and Receivers Top Receivers: India, China, Phillipines, Mexico, Egypt Top Senders: US, Russia, Saudi Arabia, Switzerland
- 4. History ● 2004 - G8 discusses the problem of high fees ● 2008 - World Bank established the first international database of remittance prices ● 2009 - G8 objective of reducing fees by 5% in 5 years ● 2011 - Bill Gates at G20 suggest if the fees are reduced from 10% to 5% it would unlock $15B for developing countries
- 6. Traditional Companies ● MoneyGram ● Western Union (500,000 agents world wide) ● Xoom by PayPal ($100 per client acquisition) ● Venmo by PayPal Problems ● High fees 8-9% ● Slow Transfer (Sometimes weeks) ● Prone to Fraud (Venmo lost $40M in Q1 2018)
- 7. Online Transfers ● Rely on smartphone penetration, the problem is the lack of internet in remote areas (Starlink by Elon Mask?) ● TransferWise (1-2% depending on funding method) ● Revolut (Crypto Banking)
- 8. E-Wallets ● AliPay ● WechatPay ● Venmo ● PayPal ● Coins.ph (Partnered with WU)
- 9. Blockchain Remittances Problems ● Cash-in and Cash-out (ATMs with Stable coins) ● Volatility (Stable coins, Abra?) ● Transaction fees on chain and throughput (Second layer solutions) ● Conversion to national currencies (National Stable Coins)
- 10. Tips ● Backup your seed phrase ● Never Keep Coins on Exchanges ● Denis Serebryakov meetup.com/ThatCrypto