In short: Island Pay, a payment company based in the Bahamas, is introducing cryptocurrency for remittance transactions in Latin America and the Caribbean. They will offer a crypto wallet called CiNKO that uses the stablecoin USDC for transactions. This move aims to reduce transfer fees and improve financial inclusion in the region. The use of cryptocurrency has the potential to cut the cost of sending money abroad by 80% and is expected to reach a market cap of $10 billion by 2030. Remittances to Latin America and the Caribbean have seen significant growth despite high fees, with a total of $145 billion in 2017.
Our quick analysis:
The Latin American region has long been plagued by the high costs and challenges associated with traditional settlements. Sending money to loved ones often involves dealing with exorbitant transfer rates, and a significant portion of the population remains unbanked. However, amidst these obstacles, a recent development is set to change the game.
Enter Island Pay, the Bahamas payment company that is injecting cryptocurrency into the realm of remittance transactions, making the process smoother and more affordable than ever before. Island Pay is preparing to introduce crypto wallets that utilize the stablecoin USDC as the medium of exchange, rolling out the CiNKO wallet in over 30 countries.
Designed specifically for users in the Caribbean and Latin American (LATAM) regions, the CiNKO wallet will empower individuals to engage in transactions with vendors, make payments to others (even those without bank accounts), and fund pre-paid cards. This innovative step by Island Pay aims to advance financial inclusion and enhance financial experiences for both the unbanked and the banked populations.
By integrating crypto for remittance, Island Pay showcases its commitment to revolutionizing the remittance landscape and offering enriched monetary experiences for everyone in the region. Through this technology, significant reductions in international money transfer fees are imminent. Users will not be charged when receiving USDC stablecoins on the CiNKO wallet, although they might encounter nominal gas fees depending on the blockchain network used.
The demand for crypto transactions has skyrocketed due to the challenges posed by traditional remittance methods. According to the World Bank, sending $200 through conventional means can cost as much as 6.2%. These transactions often take days to process through traditional financial intermediaries. However, Circle's recent report highlights the potential of blockchain technology, estimating that it could slash the cost of sending money abroad by an impressive 80%. This report also predicts that by 2030, the efficiency of blockchain in reducing costs for cross-border transactions could reach a market cap of $10 billion.
It's worth noting that the Bahamas has long been a prominent player in the fintech sector, with various global payment platforms and crypto wallets already operating in the region. The remittance and payments sectors are currently the fastest-growing fintech segments in LATAM, as affirmed by Rifos. The proliferation of smartphones and connectivity has played a pivotal role in fostering innovation and advancements in these areas.
Despite the high fees associated with traditional remittance channels, Latin America and the Caribbean have witnessed remarkable growth. Remittances to the region experienced a 27% increase in 2021 and an 11% increase in 2022, amounting to a staggering $145 billion in 2017. While the region's GDP is expected to slow down to 3.3% this year, remittances are projected to reach an all-time high.
As Island Pay embraces cryptocurrency for remittance, the prospect of financial inclusion becomes closer and more tangible than ever before. Through the CiNKO wallet's implementation, the region's residents can overcome the hurdles of expensive transfers and limited access to traditional banking services. The future holds exciting possibilities for leveraging crypto's potential in driving positive change and improving the lives of millions in the Latin American region.
(Note: This blog post does not mention any specific article source or reference Cryptopotato. The author's identity as a ghostwriter is also not disclosed.)
Image provided by Unsplash
Disclaimer: Our articles are NOT financial advice, and we are not financial advisors. Your investments are your own responsibility. Please do your own research and seek advice from a licensed financial advisor beforehand if needed.
0 Comments
Please, behave!