Policing crypto exchanges is the requirement of the day that will flourish the transfer markets and help people save their hard earned money. Migrants who have to send money to places as Somalia, which doesn’t have a functioning government, it may sum up to life or death situation for them. The traditional banking services are limited or simply cut down upon the money transfer services – the only means to get the money to their reliant families.
All migrant-wage-earners send back money to their families or home countries and high remittance fees are charged making the money transfer a multi-billion dollar industry. Remittance payments totaled to $55bn in 2017 from the US to India, Mexico and China, and in 2015 totaled $582bn worldwide. Cryptocurrencies can help negate the charges and other complications in sending the money cross-border.
The crypto market is developing and now with Binance which will be integrating KYC- Know Your Customer software, will change the security scenario to a positive in favor of crypto money transfers. The software will be provided by $26.4 billion NY company, Definitive, a seller of technology to financial companies, with 40, 000 customers and more than 400,000 end users in 190 countries. Blackstone Group owns the company in the majority and Thomson Reuters in minority.
Binance, the crypto exchange transacting more than $1.7 billion daily, follows the AML Anti-Money Laundering standards in the fiat world and incorporates advanced third-party transaction monitoring tools, and their own proprietary tools, will help build trust with regulators and financial institutions.”
The KYC is a mandatory system in most countries that requires keeping track of customer’s identity and financial situation and helps customer and company from unnecessarily losing money. The stress tested software – ‘World Check,’ that draws information from authoritative sources in over 200 countries, was successful with more than 100 financial institutions and regulators, as reported by Finance Magnates.
World Check will encourage remittance payers to choose cryptocurrency over the traditional banking system. As per World Bank, India, China, the Philippines, Mexico and Nigeria are the top 5 remittance destinations that use Paypal or Western Union money transfer service. And, for each $500 sent, an amount of 6%, $30 is charged. And in contrary, Litecoin with aid of Stellar Lumens costs a fraction of a cent – a $99 million would cost a mere transaction fee of $0.40, as reported by Forbes.
So, policing crypto exchanges along with stablecoins that could bear the volatility of cryptocurrency will help the cross-border payments, save people their hard earned money and let the recipients enjoy maximum benefits. Not to mention that it would save billions of dollars.[The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views and/or the official policy of the website. ]