Remitting costs have been decreasing over the past decade. Average sending costs for remittances decreased from 9.67% in 2009 to 6.75% in 2020. While it is a considerable decrease, remittance costs are still higher than the UN Goal of reducing transaction costs of immigrant remittances to less than 3%.
A World Bank study shows that it costs on average 4.98% to remit funds to South Asia and 8.47% to remit to sub-Saharan Africa. Additionally, it is more expensive to remit funds through traditional means such as banks and it is more preferable to remit through digital means. The global average costs for digital remittances are 5.29%, while the costs for non-digital remittances remain higher at a 7.24% average.
All these numbers, however, fall short of the 3% UN Sustainable Development Goal, and all of these statistics exclude cryptocurrencies which are the only means of transaction that meet this goal.
How cryptocurrencies meet UN SDG 10.c
Cryptocurrencies offer a cheaper, faster, and more secure transfer of funds. Their transaction costs are a fraction of 1% which not only meets but exceeds UN goals. Although the World Bank does not consider cryptocurrencies in their analysis of remittances transfers, many immigrants are already using cryptocurrencies for remittances back to their home country because it is a cheaper and a more convenient option.
Will and should more immigrants use cryptocurrencies?
What is stopping the World Bank from recognizing cryptocurrency’s role in remittances?
Do cryptocurrencies present a threat to traditional forms of funds transfers?
Do cryptocurrencies make a big enough difference in transaction costs to be the preferred method when sending remittances?
Share your thoughts in the comments below!
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