Crypto Q&A: The Future of Cross-Border Transactions
Existing payment platforms and financial infrastructure charge extravagant fees to process cross-border crypto transactions.
The exchange rate of a currency comes into play as well when you transfer funds to your local bank account. Plus, the rate at which the conversion (from let's say US Dollar to Euro) takes place is lesser than the market rate – of course, an appropriate margin prevents the possibility of a payment platform incurring a loss while the transfer ID is taking place.
To add to that, you have to wait for a few working days (one to two working days if you're lucky) for the funds to reflect on your account.
Cue cryptocurrencies - cryptocurrencies are bound to make cross-border transactions quicker, securer, cheaper and more transparent.
Following our report on recent research which indicated that cryptocurrency is becoming the top choice for cross-border trade, we look at the subject in more detail.
Crypto Will Shape the Future
Central Bank Digital Currency (CBDC) technology and cryptocurrencies like Ripple are bound to make cross-border transactions easier. El Salvador adopted Bitcoin (BTC) as a legal tender for many reasons, of which one was to ease the process of transferring money overseas.
While Bitcoin is not the global standard for overseas payments, CBDCs must be looked at with intent.
CBDCs will make it easy to transfer money abroad and will offer much-needed transparency and traceability – officials will be able to track transactions and pinpoint suspect cases of financial fraud and money laundering. They are a fantastic solution for the unbanked and offer the possibility of layered transactions.
For example, you could make a cross-border payment to your parents and program the payment to execute on their anniversary. While it will take time to transform legacy solutions into modern, crypto-based infrastructure, the future of the crypto industry in global finance is bright. We will see a substantial shift in the due course of this decade.
Author: Surajdeep Singh
Surajdeep Singh has been working in the tech sphere as a marketing guru and journalist for over 6 years, with his speciality laying in blockchain and Web3. He has donned several hats in marketing and journalism over the years and worked with many reputable brands. Feel free to reach out to him on LinkedIn!